THELO Group of South Africa has formed an exclusive strategic partnership with German Rail (DB) subsidiary DB Engineering & Consulting, which will provide engineering, technical and operational support for Thelo rail projects across sub-Saharan Africa.

Thelo Group had previously formed the Thelo DB equity joint venture with DB, which in July 2023 signed a 25-year agreement to develop and commission the Western Railway in Ghana. Thelo DB was also awarded a $US 1.08bn contract in July 2021 to build a 412km iron ore line in the Congo.

Thelo Group is now looking to deliver multi-user integrated rail and port corridors to efficiently move mining commodities, agricultural produce, containers and bulk liquids at economies of scale.

The company says that the single market created under the African Continental Free Trade Area (AfCFTA) is expected to increase trade within Africa by 81% by 2025, with the transport sector forecast to grow by nearly 50%. At the same time, the African Development Bank (ADB) estimates that transport infrastructure requires investment of $US 35-47bn a year.

Thelo Group points out that the dilapidated condition of the African rail network means that national operators cannot offer the capacity required, forcing shippers to rely on road, which moves 80% of freight. It also notes that logistics costs in Africa are currently up to 75% higher than in other parts of the world.

The company is aiming to address these issues through rail transport and infrastructure development projects that will offer a more efficient and cost-effective solution.

Thelo Group chairman, Mr Ronnie Ntuli, told IRJ that the company has been shortlisted in tenders for projects to develop the Trans-Kalahari Corridor between Botswana and Namibia, and the Boegoebaai Corridor in South Africa.

The company is also in advanced discussions with the governments of two other African countries to develop and operate freight corridors, he says.

As well as Thelo Infrastructure Development, Thelo Group subsidiaries include Thelo Rolling Stock, which finances locomotives and wagons for lease to operators, freight concessionaires and shippers.

Thelo Capital is the group’s newly-formed capital mobilisation and deployment vehicle. The group has a partnership with the Industrial Development Corporation of South Africa (IDC), which owns 10% of Thelo Rolling Stock.

Thelo Group has signed a Memorandum of Understanding (MoU) with the African Export-Import Bank (Afreximbank), which is acting as mandated lead arranger and adviser for the company’s rail corridor and infrastructure development projects.

“We are mobilising capital from investors in Africa and internationally, and leveraging world-class engineering and operational capacity to create large-scale interconnected transport and logistics corridors for Africa,” Ntuli says.

“Thelo's multi-freight, multi-user approach will deliver more efficient transport solutions to multiple freight owners at economies of scale that will reduce transport and logistics costs.”

“Our global and long-standing experience and expertise in the railway sector, coupled with our ongoing valued relationship with Thelo, is crucial for delivering on Africa’s critical need for integrated transport infrastructure,” says Mr Stefan Geisperger, managing director for international markets at DB Engineering & Consulting.

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