EUR 200m for locomotives in South Africa

KfW Development Bank has granted a promotional loan of EUR 200m (about 2.7 billion rand) to South Africa's state-run logistics company Transnet on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). This will contribute 20 % of the financing for 240 new electric locomotives. The German federal government has issued a partial guarantee for the loan.

The financing will make it possible for work to be carried out simultaneously at three necessary building sites. As a result of the growth in freight volume in South Africa, a large proportion of freight traffic is being diverted from road to rail, and freight traffic will represent the main form of transport. The project forms part of the South African strategy to increase the efficiency and capacity of freight traffic. "This project will play a crucial role in the economic development and the creation of new jobs in South Africa. Efficient freight transport in future will be a major factor in making the South African economy more competitive", said Dr. Norbert Kloppenburg, member of the Executive Board of KfW Group. 15,000 new jobs will be created, and the technological expertise can be passed on. This will not only give international suppliers the opportunity to transport goods to South Africa, but will also strengthen local supplier industries in particular.

The financing will also reduce CO2 emissions and will make an important contribution to climate protection. This approach is also in keeping with South Africa's focus on energy and climate.

The locomotives are being supplied by Bombardier Transportation, and most of the components will be produced by South African companies. Assembly will also take place in South Africa.

On behalf of the German federal government, KfW Development Bank has provided around EUR 1 billion to South Africa for projects since 1994 (budget funds of around EUR 180 million, KfW funds of around EUR 820 million), mainly in the key areas of climate and energy, the prevention of violence and healthcare.