State-owned freight logistics company Transnet is partnering with the Development Bank of Southern Africa (DBSA) in a drive to accelerate private sector participation (PSP) in its multi-billion dollar infrastructure investment programme.
The initiative paves the way for the development bank to provide funding and expertise for PSP preparation work, including transaction advisory services.
Commenting on the milestone, Mr Gama said: “Finding innovative funding solutions is a key element of the market demand strategy (MDS). Partnerships with the private sector will not only broaden our sources of funding for capital investments, they will give us access to private sector skills and expertise.
“At the same time, they will help us manage risk and provide alternative procurement tools for large infrastructure projects. In addition, PSPs provide entities like Transnet with mechanisms to ensure black participation in large-scale projects.”
Increasing private sector participation in South Africa’s infrastructure investment programme is part of the DBSA’s mandate as a development finance institution. In addition, once a project is ready to go to market, DBSA will also be eligible to compete as one of the funders.
Mr Gama continued: “This partnership speaks to one of our core objectives of supporting economic growth through investing in economic infrastructure – with transportation being one of the four key focus sectors to achieve this objective.”
Transnet’s market demand strategy is pillared on a rolling seven-year US$28 billion infrastructure investment programme.
The projects in the PSP portfolio includes the manganese common user loading facility in Northern Cape; the Tambo Springs inland container terminal, to be built in Ekurhuleni, Gauteng; and a container terminal at the soon to be built Durban dig-out Port.
Mr Gama concluded: “Both DBSA and Transnet, as state-owned entities, should be immensely proud that we are able to work together in an innovative manner to unlock hundreds of billions of rand in value for the South African economy.”