Transnet, a South African state-owned transport and logistics company, and China Development Bank (CDB) on Tuesday signed an agreement to cooperate in upgrading infrastructure projects.

Transnet said the cooperation includes the upgrade of railway and port infrastructure and the localization of equipment manufacturing.

In addition, the two sides agreed on future collaboration on research and development initiatives, manufacturing, marketing and the construction of cross-border infrastructure throughout the continent.

"This historic agreement between two state-owned entities within BRICS illustrate the opportunities inherent is such diplomatic ties. The agreement will enable us to explore innovative funding options as we pursue our borrowing plan focusing on cost effective solutions and diversity," Transnet Group Chief Executive Brian Molefe said at the signing ceremony held in Pretoria.

Molefe said the agreement is one of the various country-to- country collaboration agreements intended to strengthen economic and trade relations among the different BRICS countries.

South African President Jacob Zuma, his Chinese counterpart Xi Jinping and South African Minister of Public Enterprises Malusi Gigaba also witnessed the signing of the agreement.

Last year, Transnet announced an unprecedented 300 billion rands (32.6 billion U. S. dollars) investment program, the Market Demand Strategy, to revamp and expand its ports, rail and pipelines infrastructure and equipment.

About two thirds of the required funding will be raised from internal resources while the remainder will be sought through various sources in the debt capital markets.

As part of the investment program, Transnet has awarded various equipment manufacturing contracts to the U. S. General Electric, Finnish crane maker Kalmar and China South Railways.