Signature(s)
Summary sheet
- Transport - Transportation and storage
- Energy - Electricity, gas, steam and air conditioning supply
- Water, sewerage - Water supply; sewerage, waste management and remediation activities
The project consists of the financing of Transnet's investment programme as part of the Just Energy Transition Partnership (JET-P) in South Africa. The schemes included in the project will concern the renewal and/or rehabilitation of Transnet's assets, particularly its port and freight railway infrastructure, as well as the construction of new assets enabling the development of the green hydrogen value chain.
At the UNFCCC COP26 in November 2021, South Africa, France, Germany, the United Kingdom, the United States of America and the European Union announced a new ambitious, long-term Just Energy Transition Partnership (JETP) to support South Africa's decarbonization effort in the context of domestic climate policy, including transitioning its economy towards cleaner energy sources. The EU pledged EUR 1.03 bn, out of which EUR 1bn from the EIB. It is in this context that the EIB is considering a EUR 500m framework loan to support Transnet on its journey to becoming a low carbon, efficient and sustainable logistics company.
The operation supports an investment program for Transnet as part of the Just Energy Transition Partnership (JET-P) in South Africa. The schemes included under the framework loan will concern the renewal or rehabilitation of Transnet's assets, including its port and freight railway infrastructure and new assets in the green hydrogen value chain.
The operation will facilitate a modal shift to cleaner transportation modes. It is expected to strengthen the country's connectivity and competitiveness. It will also address different market failures by minimising negative transport and environmental externalities.
The project is expected to be in line with the objectives of initiatives such as the country's Nationally Determined Contribution, EU's Global Gateway and REPowerEU, and the SA-EU Multiannual Indicative Programme. It contributes towards several Sustainable Development Goals, in particular SDG7 (Affordable and Clean Energy) and SDG13 (Climate Action).
The EIB loan will have significant value added for Transnet due to: (i) its flexibility, (ii) a tenor that matches the economic life of the assets, (iii) a grace and availability period that suits the company's needs, (iv) an attractive pricing, (v) the strong signal that the supply side of the green hydrogen is an activity supported by the EIB, crowding in other financiers.
The project is expected to contribute to climate action and environmental sustainability (CA&ES) objectives, in particular to climate mitigation and climate adaptation. Details of Transnet's environmental and social due diligence procedures for ensuring compliance with national legislation, the principle of EU and international standards as well as EIB's Environmental and Social Standards as well as the capacity of the Promoter to assess and monitor environmental and social risks and impacts will be reviewed during appraisal.
Local content requirements may be applicable to certain schemes to be financed for which a partial derogation from the EIB Guide to Procurement may be required. This will be confirmed at allocation stage. For all other procurement related matters, the Bank will require the Promoter to ensure that the implementation of the project will be done in accordance with the Bank's Guide to Procurement.