South Africa's state-owned rail firm Transnet has agreed a five-year loan worth $1.5 billion with a group of international lenders led by Deutsche Bank AG in its biggest funding transaction in seven years.

Poor maintenance, a lack of spare parts for trains, copper cable theft and vandalism have disrupted Transnet's freight rail services.

It reported a 14% decline in volumes hauled in its last financial year.

In April, Transnet declared force majeure, saying its capacity to provide services to mineral exporters was constrained by a lack of locomotives, large-scale theft of copper cables and vandalism of infrastructure.

Transnet will use the loan to fund its expansion projects and refinance existing debt, it said in a statement late on Tuesday.

"This is a significant milestone to stabilise Transnet's liquidity position in support of our financial sustainability," Transnet's Group Chief Financial Officer Nonkululeko Dlamini said.

The first draw-down of $685 million is scheduled for this month, Transnet said.

Africa Finance Corporation, African Export-Import Bank and Bahrain-headquartered Ahli United Bank were involved in the syndicated loan transaction alongside Deutsche Bank.

Last week, Transnet issued a veiled threat to coal exporters who had not agreed to amend transportation contracts, following its declaration of force majeure in April.

(Reporting by Nelson Banya; editing by Helen Reid and Jason Neely)