South Africa Secures $1.5 Billion to Boost Rail and Energy

South Africa has secured $1.5 billion in funding from the World Bank to implement rail freight and energy reforms aimed at boosting competitiveness and driving private sector investment. This is reported by the railway transport news portal Railway Supply.

The government plans to modernize infrastructure, expand market access, and support its transition to a low-carbon economy. These actions are part of a broader development partnership with the World Bank through 2026.

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A key priority is restructuring South Africa’s freight rail system, which is currently dominated by Transnet. The reform will separate infrastructure management from operations and invite at least four private train companies.

To ensure fair access and competition, the government will also establish an independent transport economic regulator. These changes are designed to improve service quality and reduce transport costs for businesses.

Reform measures target a significant expansion in network usage—from 25% in 2023 to 65% by 2027. Officials expect these steps to deliver more affordable and efficient freight logistics.

South Africa Aligns Infrastructure Growth with Energy Transition

The loan also supports energy reforms that include unlocking investments in transmission and improving municipal distribution services. These efforts aim to strengthen energy security and grid reliability.

Additionally, just transition policies will mobilize $750 million in grants and generate around 10,000 jobs in regions impacted by the shift from coal. Many of these jobs are expected to benefit women and vulnerable groups.

The $1.5 billion loan aligns with three key pillars: boosting energy security, promoting a low-carbon economy, and enhancing freight service delivery. Each supports long-term sustainable development.

With unemployment exceeding 31% and GDP growth below 1% annually, these reforms are vital for attracting investors and revitalizing the national economy.

World Bank Director Satu Kahkonen said the initiative could help create up to 250,000 jobs by 2027 and half a million by the early 2030s. She emphasized its role in resolving chronic bottlenecks and enhancing public service performance.

Source, photo: www.railwaypro.com

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