Traxtion ramps up bid to build Africa’s biggest rail company

The company’s $86m equity raise was heavily oversubscribed, indicating the appetite for the future of private rail in Africa.

Ciaran Ryan · 3 Jun 2026, 09:03

ABSAR226.98-0.93%2026/6/3 23:00

GRINDRODR26.312.02%2026/6/3 23:00

STANBANKR304.39-0.75%2026/6/3 23:00

The latest phase of the capital raise closes the equity required for Traxtion’s previously announced R3.4bn rolling stock investment programme, which includes the acquisition of 46 locomotives and 920 wagons. Image: Supplied

Investors appear to have big hopes for the future of private rail in SA and Africa, judging by the amount of money being thrown at it.

This week, Africa’s largest private rail company Traxtion announced it had wrapped up its heavily oversubscribed $86 million (about R1.4 billion) equity raise, demonstrating appetite for what is widely touted as a huge growth market over the coming years.

Listen/read:

Traxtion kickstarts private SA rail boom with R3.4bn investment

What Traxtion’s R3.4bn investment means for SA freight rail

The latest phase of the capital raise brings together Stanlib Infrastructure Investments, Standard Bank and two Harith funds – Harith InfraCo and Harith PAIDF2.

This closes the equity required for Traxtion’s previously announced R3.4 billion rolling stock investment programme, which includes the acquisition of 46 locomotives and 920 wagons and secures a further pool of capital for future planned investments.

Transnet monopoly comes to an end

Transnet’s state monopoly on rail services is coming to an end with the approval in May of 11 train operating companies (TOCs) being granted rail slots on 41 routes by Transport Minister Barbara Creecy.

Among those granted access to rail infrastructure are ARC South Africa, The Railway Corporation, MSC and Grindrod.

The market is awaiting the release of a revised Rail Network Statement that it expects to provide clarity on shortcomings identified in previous versions, such as service level commitments, reciprocal penalties, which are seen as weighted against TOCs, more balanced legal protections for train operators and the ability of cargo owners – such as mines, agricultural processors and auto manufacturers – to apply for rail slots of their own.

Read:

Creecy announces breakthrough in SA rail reform: 11 TOCs approved

Pivotal reform in Transnet’s final Network Statement

Many of these would likely sub-contract the operation of these slots to private rail companies like Traxtion.

Traxtion has not applied for a rail slot as yet, confining its role to the supply and maintenance of locomotives and rolling stock to others, though CEO James Holley says the company will likely bid for slots once it receives clarity on operator rights and obligations, which is expected when the Rail Network Statement version 4 comes out for comment.

Traxtion is already a rail operator and provides rolling stock and rail services in countries like Angola, Mozambique, Zambia and Tanzania.

Setting sights on expansion

In the meantime, the company is gearing up for growth and intends staking its claim to becoming Africa’s biggest private rail operator.

While Transnet has been pulverised by decades of poor management and corruption – only recently turning the corner under CEO Michelle Philips – there are some stellar examples of hugely successful private rail operators elsewhere in the world, such as the Berkshire Hathaway-owned BNSF Railway, Union Pacific and Aurizon in Australia.

BNSF generated operating margins of 34.5% in 2025 on revenue of $23.4 billion, making it massively profitable – due in large part to the scale at which it operates, covering a network of about 51 000 kilometres.

US-based Union Pacific generated operating margins of 40.2% on $24.5 billion revenue by leveraging its vast economies of scale.

In SA’s newly competitive rail environment, companies like Traxtion have massive headspace for growth if rail reforms work out as planned and just a fraction of cargo currently shipped by road is diverted to rail.

Listen/read:

Transnet bottlenecks spur fresh private rail investment push

Rail master plan will cost almost R2trn over 30 years

Can SA finally deliver a credible rail recovery?

“This additional investment clearly demonstrates the confidence we have long held in the future of rail and is yet another step toward unlocking rail’s full potential as a catalyst for growth.

“We previously said Traxtion was preparing to unlock significantly more investment into the sector, the backing of South Africa’s largest financial institutions sets us up perfectly to deliver that,” says Holley.

“There’s big enthusiasm for private rail in Africa. We have vast experience in Africa where we operate in 10 countries, making us the largest private operator on continent.

“There aren’t too many companies of our scale, our quality and safety standards, and our track record of running operations and supplying rolling stock across the continent.

“ISO certification and attention to safety standards, safety record – real capacity to deliver rail to SA. Harith, now Standard Bank – all subscribing for equity.

“The equity raise is on top of a $34 million (about R553 million) revolving credit facility from Absa which will be replaced in time with longer-term debt,” says Holley.

Listen/read:

Transnet’s rail monopoly is coming to an end

SA private rail: A R11.5bn opportunity

Africa’s biggest freight rail market set for private operators

Traxtion has built its business around extending the operational life of rail assets through refurbishment, maintenance and operational optimisation.

The aim is to make it both cost-effective and efficient for customers to use rail and reduce pressure on the roads.

Holley says the new investment will support continued refurbishment programmes, fleet enhancement initiatives and operational expansion, while advancing localisation and supplier development objectives.

Muhammed Munshi, principal at Stanlib Infrastructure Investments, says: “Rail remains a key constraint to South Africa’s growth, and we see Traxtion as a proven operator positioned to support increased private-sector participation and expand freight rail capacity and network efficiency.”

Traxtion’s rolling stock programme remains on track, with the first locomotives expected to enter service in March 2027.

The programme includes a minimum 60% local content target and is projected to support 662 direct jobs during build and deployment.

Listen/read: Private operators to make a difference from 2027

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AUTHOR PROFILE

Ciaran Ryan

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Ciaran Ryan is a Johannesburg-based freelance writer who has a background in finance and mining, having previously headed up a gold mining operation in Ghana. He currently writes for several SA and overseas journals on matters ranging from mining to investment.

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Aberdon 17 hours ago

Africa needs high speed rail and road networks from the Cape to Cairo. USA built its mighty rail networks in the 1800’s and its great highways in the 50’s. It’s time for Africa to catch up. Build it and they will come. USA, Europe and China are lining up to invest in Africa transport infrastructure.

PaulKearney 15 hours ago

“…only recently turning the corner under CEO Michelle Philips…”, dream on, I missed that and doubt its veracity.

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Traxtion ramps up bid to build Africa’s biggest rail company

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