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 sustainable financing agreement worth EUR 300 million to modernize the rail infrastructure in South Africa. The signing ceremony took place on the sidelines of the meeting by the African Union Commission Technical Committee on Transport and Energy 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 also attended the signing ceremony.
Transnet plans to utilize the funds to rehabilitate 550 kilometers of rail along the Cape Corridor in order to shift freight from road to rail, thus avoiding unnecessary carbon emissions. In addition, Transnet will add 30 MW of renewable generation capacity to green its rail network. The Agreement also makes provisions to transition to Green Hydrogen (#GH2) as a fuel.
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. In particular, Transnet commits to raising its utilization of renewable energy to at least 20% of its total energy consumption.