AFD and Transnet Sign €300M Green Loan to Modernize Rail in South Africa

On 4 May 2026, France’s Development Agency (AFD) Regional Director for Southern African Marie-Helene Loison and Transnet CEO Michelle Phillips signed a loan agreement worth EUR 300 million to modernize South African rail. The signing ceremony took place on the sidelines of the AUC Technical Committee on Transport and Energy Meeting held at the Sandton Convention Center in Johannesburg.

The Agreement follows the MoU that was signed during France’s President Macron’s visit to South Africa in the context of the G20 Summit in November 2025. At that same time, South Africa and the European Union also signed another cooperation MoU on #CriticalMinerals.

The deal falls within the framework of South Africa’s Just Energy Transition (#JET) and Transnet Corporate Sustainability Program as it aims to modernize the rail network while reducing its carbon footprint. At #COP26 in 2021, France committed EUR one billion to the Just Energy Transition.

South Africa was represented by Vice President, Paul Mashatile, and Transnet Group CEO, Michelle Phillips. Representing AFD were Remy Rioux, CEO of AFD Group, and Marie-Helene Loison, AFD Regional Director for Southern Africa. EU Commissioner for International Partnerships Jozef Sik and France’s Ambassador David Martinon were also attended the signing ceremony.

In particular, Transnet will put the funds to rehabilitate 550 kilometers of rail along the Cape Corridor to shift freight from road to rail, thus avoiding unnecessary carbon emissions. In addition, Transnet will add 30 MW of renewable generation capacity to power the electric trains. Furthermore, provisions are in place to transition to Green Hydrogen (#GH2) as a fuel as well.

In addition to the loan, the EU is providing a EUR 7 million grant for feasibility studies and technical assistance. The financing qualifies as a Sustainability-Linked Loan (#SLL) with quantifiable Environmental, Social and Governance (#ESG) targets.