Johannesburg, South Africa — 27 March 2013 – The China Development Bank is to loan South African national transport carrier and logistics group Transnet about R46 billion (US$5 billion) to revamp its ageing railways, which transport mainly bulk commodities such as coal and iron ore.

Quoting a source close to the deal, Fin24 reports that: “The figure may go up or down, and it is a loan.” The source, who asked not to be named, said the money would be used for railway infrastructure.

The deal was reached before a summit of the leaders of the emerging market powers Brics “’ Brazil, Russia, India, China and South Africa “’ opened in Durban this week with the goal of helping build the economies of Africa.

Transnet plans to invest up to R300 billion over seven years to expand railways, ports and pipelines to boost exports of commodities from Africa’s biggest economy. The programme will be financed using Transnet’s own resources and money raised in capital markets.

Transnet has confirmed that the group agreed to cooperate with the Chinese bank, but did not mention any figures.

“The cooperation includes, but is not limited to, the financing of the construction and upgrade of railway and port infrastructure, and localisation of equipment manufacturing “’ especially rail and port,” it said.

The two parties also agreed to work together on cross-border infrastructure development throughout Africa.

Source: Fin24. For more information, click here.