EIB in talks with South Africa over loan for ports, freight rail

The European Investment Bank said it’s in talks to loan South Africa money to upgrade its port and freight-rail infrastructure as its first contribution to a decarbonization pact known as the Just Energy Transition Partnership, Report informs referring to Bloomberg.

The loan, the size of which the EIB didn’t disclose, is part of its €1 billion ($1.07 billion) commitment to the JETP, it said in a response to queries on Thursday. The agreement to help South Africa transition away from the use of coal consists of $8.8 billion in climate finance pledged by the European Union, via the EIB, France, Germany, the US, UK, Netherlands and Denmark.

“This potential investment would aim to support South Africa’s ambitious decarbonization efforts under the JETP, while boosting economic growth through more efficient and reliable freight transport,” the EIB said.

The loan talks come at a time when South African shipments of coal and iron ore, two of its biggest exports, are being constrained by an unreliable freight-rail system and fruit destined for overseas markets is rotting in some of the world’s most inefficient ports.

EIB loans are made “at a favorable rate” and would possibly be complemented by grant finance from the European Commission, the bank said.