CAPE TOWN, Aug 30 (Reuters) – South African state logistics group Transnet on Friday agreed a 5 billion rand ($283.53 million) loan from the New Development Bank set up by the BRICS group of emerging economies.

The loan will be guaranteed by the South African government, director general Duncan Pieterse told Reuters on the sidelines of a meeting of the New Development Bank being held in Cape Town.

Transnet is saddled with about 130 billion rand in debt and has struggled to provide adequate freight rail and port services because of equipment shortages and maintenance backlogs after years of under-investment.

Transnet’s chief executive said the money from the BRICS bank would be used for the company’s turnaround plan.

“There is lots of work to be done in Transnet, we’ve got major challenges. We need to sort it out and that’s what we need the money for,” Transnet CEO Michelle Phillips said after a signing ceremony for the loan agreement.

($1 = 17.6351 rand)

(Reporting by Wendell Roelf; Writing by Bhargav Acharya; Editing by Alexander Winning)