South African logistics group Transnet will borrow 100 billion rand over the next seven years to pay for a 300 billion rand infrastructure programme, its chief executive said on Monday.
The spending plan was heavily promoted in President Jacob Zuma's “State of the Nation” policy address this month, with government officials saying it will help create jobs and increase the country's competitiveness.
State-owned Transnet, which moves commodities such as coal, iron ore and fuel, is looking to nearly triple its capital expenditure from its original plan of around 110 billion rand to build and expand infrastructure in Africa's biggest economy.
Bottlenecks at ports and rail lines run by Transet have slowed exports and economic growth.
“We will only need to borrow around 100 billion rand by issuing bonds, domestic and international, bilateral loans,” Brian Molefe said.
He did not say when the bonds would be issued, with debt problems in Europe making projections difficult.
He did not foresee any problems in attracting interest for the bonds and was confident the company would find the money to pay for the rest of the expenditure from its own balance sheet.
Details of the new capital programme will be announced in the coming weeks, but Molefe indicated that 55 percent of that would be spent on new projects. The remainder would go for maintenance of existing infrastructure. - Reuters