The New Development Bank (NDB), established by the BRICS bloc of nations, is contemplating granting an R18 billion loan to Transnet. The loan aims to facilitate the upgrade of Transnet’s locomotives and enhance the capacity of its rail corridors.
- The NDB intends to finalize the loan transaction by the end of the year, seeking to expand its portfolio in South Africa, which currently stands at $5.6 billion (R105.5 billion).
- Founded in 2015, the NDB serves as a multilateral financial institution specifically designed to support emerging-market economies. Its founding members include Brazil, Russia, India, China, and South Africa, each contributing $2 billion (R37.68 billion) to the bank’s equity capital and holding a 20% stake.
- In 2021, the NDB initiated an expansion of its membership and admitted Bangladesh, Egypt, United Arab Emirates, and Uruguay as new member countries.
- The COO of the NDB, Vladimir Kazbekov, stated that the loan for Transnet’s modernization of locomotives would amount to R18 billion. The bank is also considering a separate substantial loan for water and sanitation infrastructure.
- The South African government is expected to provide a guarantee for the debt in accordance with the NDB’s requirements.
- In a recent bond auction, the NDB raised R1.5 billion ($94 million) by issuing local currency bonds in South Africa. The funds raised will be utilized to finance infrastructure and sustainable development projects in the country. The bank aims to increase its presence in the local capital markets of its member countries to support its portfolio of local currency loans.