en.Wedoany.com Reported - Independent railway operator Traxtion has completed an $86 million (approximately ZAR 1.4 billion) equity financing round, injecting capital for market expansion in South Africa.
The financing was led by STANLIB Infrastructure Investments and Standard Bank, which acquired undisclosed minority stakes in Traxtion. Harith's InfraCo and PAIDF2 funds also participated, further solidifying Harith's long-term shareholding in the company. The transaction was facilitated by Pallidus Capital.
Traxtion CEO James Holley told Engineering News that the new capital is a recognition of the company's strategy and the reform of South Africa's railway sector. Following Transnet Freight Rail's vertical separation and the establishment of Transnet Rail Infrastructure Manager (TRIM), 11 private train operating companies (TOCs) have secured slot allocations, preparing to operate on a network previously monopolized by the state-owned logistics group. Traxtion has not yet applied for slot allocation under TRIM's third version of the network statement but will consider doing so if the upcoming fourth version addresses risks that impair TOCs' bankability.
This financing fills the equity gap required for Traxtion's previously announced ZAR 3.4 billion rolling stock investment plan and reserves capital for future investments. The ZAR 3.4 billion investment includes ZAR 1.8 billion for the acquisition and refurbishment of 46 second-hand locomotives and ZAR 1.6 billion for the purchase of 920 freight wagons. The locomotives, purchased from New Zealand's KiwiRail, will be upgraded and refurbished at Traxtion's Rosslyn workshop complex in Gauteng. The company is in advanced negotiations with domestic manufacturers to supply the freight wagons. Approximately 60% of total refurbishment expenditure will go to South African suppliers; over the 20-year asset lifecycle, Traxtion's fleet maintenance spending in South Africa could reach twice the initial budget.
The locomotives will be delivered in four batches, with the first eight arriving in Durban in August, and the first refurbished locomotive scheduled to enter service in March 2027. Thereafter, Traxtion plans to deliver one refurbished locomotive per week from the Rosslyn plant until all 46 are operational. Holley stated that demand from TOCs for leased rolling stock is strong, and the company remains open to applying for slot allocation once the fourth version of the network statement addresses its concerns. These concerns involve TRIM introducing service level commitments, reciprocal and balanced penalties and legal protections, and recognizing lender rights.
Traxtion has operated in other parts of Africa for 38 years and currently operates in 10 countries. Outside South Africa, the company has a fleet of 55 locomotives, its own freight wagons, and provides wagon maintenance services for third parties. The new equity investors support Traxtion's refurbishment plan, fleet expansion, and operational growth, as well as its localization and supplier development vision. Muhammed Munshi, Head of STANLIB Infrastructure Investments, stated that the investment focuses on scalable infrastructure platforms that can support government-led reforms, enhance logistics efficiency, and drive economic growth. Willem Els, Vice President of Investment Banking at Standard Bank, emphasized the importance of strategic investment and collaboration between the public and private sectors in improving the efficiency, resilience, and long-term sustainability of the country's freight logistics network. Frans Baleni of InfraCo added that Traxtion's continued commitment to railway capacity and logistics infrastructure reflects the long-term dedication needed to underpin South Africa's freight and industrial growth.
Holley concluded that with changes in railway demand and private sector participation, this financing strengthens the company's capital reserves and prepares it for future financing opportunities and strategic expansion.
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