ICBC provides ZAR 4 billion loan to Transnet for operating expenses

Project narrative

On July 24, 2018, during a meeting between the South African President Cyril Ramaphosa and the Chinese President Xi Jinping, the Industrial and Commercial Bank of China (ICBC) signed an agreement with President Ramaphosa to give a loan worth ZAR 4 billion (about $300 million) to Transnet, a state-owned rail, port, and pipeline company in South Africa. The proceeds of the loan were to be used by the borrower for short-term liquidity purposes (i.e. to cover its general operating expenses as well as some capital expenditures). The loan has a maturity of five and a half years. The Government of South Africa issued a sovereign guarantee in support of the loan. President Cyril Ramaphosa stated the facility was a ‘rand-denominated, quarterly amortising loan, at a floating and competitive interest rate,’ although the precise interest rate was never made public. No additional information about project implementation or use of the loan proceeds has been made public. Transnet’s annual financial statements report from 2019 shows that the ICBC loan had achieved a 95% disbursement rate by the end of 2019 (ZAR 3.8 billion out of ZAR 4 billion). The loan's (principal) amount outstanding was ZAR 0 in 2018, ZAR 3.8 billion in 2019, ZAR 1.2 billion in 2020, ZAR 2 billion in 2021, ZAR 1.2 billion in 2022, ZAR 400 million in 2023, and ZAR 0 in 2024.