Grindrod Limited, the integrated Freight and Logistics business, today announced that its subsidiary Grindrod Freight Services has teamed up with the Pembani Remgro Infrastructure Fund to form a leasing joint venture, providing innovative and cost-effective leasing solutions to the African rail industry. The new company, called GPR Leasing Africa Limited (GPR Leasing) will be based in Mauritius and will be 55% owned by GFS and 45% by PRIF.

Said Dave Rennie, CEO of GFS: “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 OEM’s.”

GPR Leasing has already secured orders for 31 locomotives, all of which have either been built new or refurbished by Grindrod.  “Grindrod locomotives are 30% to 50% 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.”

Grindrod’s rail customers, which include mining companies, state railways and private rail operators, can access operating lease solutions through GPR Leasing for main-line locomotives, shunting locomotives and wagons – all for the freight market. Rolling stock leasing is a cost effective option and opens doors to new opportunities throughout Africa for customers looking to keep debt off their balance sheets. Herc van Wyk, CEO of PRIF, said: “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. 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”

Grindrod Rail has a presence in several African countries through its joint ventures and investments. The service offering now includes: manufacturing, refurbishing, maintenance & leasing; mainline operations; short haul and branch line operations; rail track engineering and construction and rail technology, signaling communication and rail systems.

Rand Merchant Bank has been appointed as the mandated lead arranger and funder of the debt package in support of GPR Leasing’s activities.

In the world’s developed rail markets, up to 60% of rolling stock is leased. GPR Leasing aims to replicate this on the African continent via this joint venture as well as a similar entity targeting the local South African leasing market.