Canada Lends South Africa $450M To Buy Canadian Trains
Canada has lent South Africa $450 billion to buy rail equipment from the Quebec-based company, Bombardier, according to a report in VenturesAfrica.
The Export-Import Bank of the U.S. will guarantee $500 million US in loans provided by Barclays Africa Group Ltd., Standard Bank Group Ltd. and Old Mutual Plc for the manufacture of 293 locomotives by GE, FinancialPost reports.
A government-owned Canadian export credit agency, Export Development Canada lent the money to Transnet, South Africa’s national rail operator.
This level of financing shows the Canadian government’s willingness to back Canadian companies that want to do business there, according to Export Development Canada, VenturesAfrica reports.
Transnet’s CEO Brian Molefe said the financing deals “enable us to match our assets and liabilities profile that makes it possible for us to maintain our investment-grade credit rating,” FinancialTimes reports.
The deal with Bombardier will help Canada “showcase Canadian capability to build and deliver on landmark projects worldwide,” Canadian Business reported on Monday.
Carl Burlock, senior vice-president of Export Development Canada, said “South Africa offers significant opportunities for Canadian companies, especially those in the business of infrastructure,” Canadian Business reported.
South Africa is a strategic market and a priority for Canada, Burlock said. Export Development Canada expects to have permanent representation in Johannesburg by the summer.