South African rail operator Transnet has secured a $557.7m funding guarantee with US export credit agency US-Exim for the purchase of more than 1,000 locomotives.
The company had entered into an agreement in March to buy 599 electric and 465 diesel locomotives from General Electric, China North Rail, China South Rail and Bombardier Transportation.
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Being purchased as part of the company’s market demand strategy, the new units will renew Transnet’s existing fleet of 2,400 locomotives.
Construction on the new locomotives is carried out at Transnet’s engineering and manufacturing facilities throughout South Africa.
The guarantee with US-Exim will allow Transnet to raise funds through bank loans and to negotiate favourable repayment terms, including the tenor and interest rates.
The required funding will be dependent on a number of factors, including market conditions, pricing and investor appetite.
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By GlobalDataThe repayment period for the facility is 14 years and is in line with the company’s agreed funding strategy. Transnet plans to raise the remainder funding from cash generated from operations.
