Grindrod Freight Services (GFS) has partnered with Pembani Remgro Infrastructure Fund (PRIF) to form this joint venture.
“The joint venture company will be instrumental in providing funding options for customers looking to buy or operate wagons and locomotives manufactured or refurbished by Grindrod, as well as other OEMs,” said GFS CEO Dave Rennie.
GFS is a subsidiary of Grindrod Limited, an integrated freight and logistics business in South Africa. PRIF invests equity in infrastructure and related opportunities across the African continent.
The new company, which will be called GPR Leasing Africa Limited (GPR Leasing), will be based in Mauritius. It will be 55 per cent owned by GFS and 45 per cent by PRIF.
In the world’s developed rail markets, up to 60 per cent of rolling stock is leased. GPR Leasing aims to replicate this on the continent through joint venture, targeting the local South African leasing market.
GPR Leasing has so far secured orders for 31 locomotives, all of which have either been built new or refurbished by Grindrod.
“Grindrod locomotives are 30 per cent to 50 per cent cheaper upfront than other diesel-electric locomotives in the market. The proven track record of the locomotives and their exceptional performance mean that funding institutions are keen to finance them,” said Rennie.
“In addition to this, Grindrod’s track record of successfully maintaining our locomotives in Africa’s most challenging environments makes our offering robust.”
According to the statement, Gridrod’s rail customers will be able to access operating lease solutions through GPR Leasing for main-line locomotives, shunting locomotives and wagons. These will all be for the freight market.
“We have been able to leverage the strong relationships of the stakeholders to access competitive funding. This translates to competitive lease rates for competitively priced locomotives. It’s an exciting proposition,” said Herc van Wyk, CEO of PRIF.
“This transaction represents an integral part of PRIF’s strategy to be the infrastructure fund of choice for private companies looking for a partner with whom to invest in opportunities that have arisen as a result of Africa’s fast economic growth.”