JOHANNESBURG, June 23 (Reuters) - South African state-owned transport group Transnet will borrow 2.8 billion rand ($230 million) from Germany’s KfW Development Bank to help fund the country’s biggest ever locomotive acquisition, the state news agency said on Tuesday.
The loan will mature in 15-years, with a five-year grace period in which Transnet will only be paying interest, the state news agency said.
The funds will be used to partially fund a $1.2 billion locomotive construction contract with Toronto-listed Bombardier .
Transnet is investing about 312 billion rand by 2019 to expand the railways, ports and pipelines that handle commodities in Africa’s most advanced economy.
The logistics group last year said it would order locomotives from General Electric (GE), Bombardier and two Chinese firms for the expansion.
In March last year, Transnet said it had awarded contracts to build 1,064 train locomotives.
$1 = 12.1750 rand Reporting by Joe Brock; Editing by James Macharia