Absa, majority-owned by Barclays, has been awarded a ZAR1bn (approximately £85m) tender to fund a rapid rail project in Gauteng province, South Africa.
The Gautrain Rail Link Project is a public-private partnership between the Gauteng Provincial Government (GPG) and the Bombela Concession Company.
It is a groundbreaking transport initiative that today sees state-of-the-art trains linking the cities of Johannesburg and Tshwane and OR Tambo International Airport.
The Gautrain term loan is for a seven-year period and the initial drawdown is expected to be completed this year.
Mandla Nkomfe, Member of the Executive Council for Finance in Gauteng province, described the deal as a milestone signalling a new form of public-private partnerships.
He said: “I would like to express our sincere appreciation to Absa for agreeing to partner with the provincial government in this kind of transaction.
“I should hasten to say that this is the first time that this kind of a deal has ever been entered into by a provincial sphere of government.”
Bobby Malabie, Chief Executive of Absa Business Bank, added: “The awarding of this tender reinforces the key role we play in the public sector environment and gives us an opportunity to strengthen our partnership with a key provincial government account.
“We have a clear strategy to maintain our market share in the public sector by delivering propositions in close collaboration with our clients that enable them to simultaneously fulfil their service delivery mandate. Our intention is to grow our relationships with existing clients while acquiring new ones.
“The GPG tender aligns directly with our focus in this sector and we are delighted that it has been awarded to us.”
Absa holds various key public sector accounts, including the governments of the metropolitan areas of Ekurhuleni, Cape Town and Johannesburg, as well as the provincial governments of KwaZulu-Natal, Eastern Cape and North West.