OTTAWA, ON --(Marketwired - March 02, 2015) - Export Development Canada (EDC) today announced up to USD 450 M in financing for Transnet, South Africa's sole national rail network operator.
The loan will partially finance a USD 1.2 B contract that Transnet recently awarded to Bombardier Transportation South Africa (Pty) Limited (BTSA), for the delivery of 240 TRAXX dual voltage locomotives.
"We are emboldened by the confidence that EDC and other funders throughout the world and South Africa are showing in Transnet," said Mr. Brian Molefe, Group Chief Executive, Transnet SOC Ltd. "Broadly, the agreement is in line with our funding strategy, especially our focus on diversifying sources of funding and raising debt cost effectively. Crucially, the agreement confirms the attractiveness, commercial viability and bankability of Transnet and its projects in an unequivocal and definitive manner. Equally importantly, this is a massive thumbs-up for our country -- and that can only be a good thing."
The transaction helps to showcase Canadian capability to build and deliver on landmark projects worldwide.
"South Africa offers significant opportunities for Canadian companies, especially those in the business of infrastructure," said Carl Burlock, Senior Vice-President, Financing and Investments, EDC. "By supporting Canadian foreign investment in South Africa with this level of financing, EDC is demonstrating its ability to back Canadian companies that want to do business in the area."
South Africa is a strategic market for Canada, as outlined in the Government's Global Market Action Plan, and is also a market of corporate priority for EDC. As such, EDC is looking to pursue opportunities and concentrate resources across multiple sectors in order to support the penetration of Canadian companies into Africa.
EDC announced plans last year to open a permanent representation in Johannesburg in 2015, and are currently eyeing a summer opening. The Johannesburg representation will serve the greater Sub-Saharan region.
The Transnet contract is significant because it expands Bombardier's footprint in an emerging market where large-scale infrastructure development is currently underway.
"Bombardier is encouraged by this important step and is pleased with the support that EDC gives to enable Canadian business opportunities internationally," said Aubrey Lekwane, Head of Business Development South Africa, Bombardier Transportation.
A total of USD 19 B in capital investments is Sub Saharan Africa are expected over the next 5 years, with over 65 per cent attributed to modernizing and expanding the rail network.
"By revamping their infrastructure, South Africa is paving the way for future economic growth. EDC's job is to help Canadian companies build their presence and reputation in the market by having a strong financial partner behind them, and to make it easier for their customers to finance their contracts with Canadian companies," added Burlock.
The financing was funded in South African Rand (approximately ZAR 5.2 billion). Where circumstances allow, EDC looks to provide financing in the currency of the market to make it easier for its foreign customers and their bankers.
For more information about EDC and how they can help your company, contact EDC at 1-888-434-8508 or visit www.edc.ca.
About EDC
EDC is Canada's trade finance agency, providing financing and insurance solutions locally and around the world to help Canadian companies of any size respond to international business opportunities. As a profitable Crown corporation that operates on commercial principles, EDC works together with private- and public-sector financial institutions to create greater capacity for Canadian companies to engage in trade and investment.
For more information about how EDC can help your company, visit www.edc.ca.
Contact Information:
Phil Taylor
Export Development Canada
(613) 598-2904
ptaylor@edc.ca