In a significant show of support for South Africa’s freight and logistics backbone, Minister of Transport Barbara Creecy has officially approved a R51 billion guarantee facility for Transnet, with backing from the Minister of Finance.
This guarantee, announced on 22 May 2025, is effective immediately and aims to support Transnet’s capital investment programme while ensuring the entity can meet its debt obligations..
The move comes amid ongoing structural reforms across Transnet—an entity that plays a pivotal role in the South African economy and the government’s agenda for inclusive growth..
According to the government’s media statement, Transnet is working to overcome serious operational, financial, and governance challenges as it seeks to modernise rail infrastructure and improve service delivery in the short and medium term..
Progress in Freight Movement and Private Sector Participation
Despite mounting challenges, Transnet managed to move 161 million tonnes of freight across its rail network by the end of March 2025.. The company’s efforts to open the freight rail market to private sector participation are also gaining traction..
In December 2024, Transnet published its 2024/25 Network Statement, designed to facilitate third-party access to the network. The announcement of the first successful private operators is expected by July 2025..
Earlier this year, the Department of Transport issued a Request for Information (RFI) aimed at private investors for five key freight corridors and their associated ports..
The goal is to crowd in private capital and expertise while maintaining state ownership of core infrastructure.. The RFI closes on 31 May, with Requests for Proposals (RFPs) expected to follow in September 2025..
Funding Structure and Forward Plan
The newly approved R51 billion guarantee comprises:
R41 billion to cover funding needs for the 2025/26 and 2026/27 financial years..
R10 billion specifically for liquidity management, including servicing maturing debt and capital expenditure..
This follows an earlier support facility of R47 billion, granted in December 2023, which helped Transnet roll out its Recovery Plan for the 2023/24 to 2024/25 financial years—resulting in improved liquidity and increased capital investments..
In parallel, Transnet is also pursuing project-based funding through the Budget Facility for Infrastructure and working with both National Treasury and the Presidency to craft a joint collaboration and funding policy.
This policy would facilitate near-term capital improvements by the private sector in critical freight corridors..
A Framework for Accountability
The guarantee support is tied to a Guarantee Framework Agreement between the Department of Transport and National Treasury.. Any drawdowns will depend on Transnet meeting strict conditions focused on operational requirements and continued logistics sector reform..
These conditions will be regularly reviewed and updated to align with evolving market and operational needs..
A Vote of Confidence in the Freight Logistics Roadmap
Minister Creecy expressed optimism about the support package, stating that these guarantees will bolster Transnet’s efforts to improve operational efficiency and drive the reforms outlined in the national Freight Logistics Roadmap..
This lifeline is not merely a financial intervention—it is a reaffirmation of the strategic importance of Transnet in enabling economic growth, trade facilitation, and infrastructure renewal..
As South Africa prepares to open its logistics market to greater private participation, Transnet stands at the centre of a much-needed transformation in the movement of goods across the country..
Source : Government of South Africa
