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State owned power facility, Eskom has received a loan boost from the African Development Bank (AfDB) to fund its expansion programme, including the Medupi and Kusile new build projects
The loan facilities will be used to fund the utility’s general capital requirements, including new-build projects, the maintenance and refurbishment of generation, transmission and distribution infrastructure and a skills development programme.
The loan is broken down into three facilities: a US$365mn unguaranteed senior unsecured loan, a US$10mn guaranteed A-loan, a US$965mn guaranteed syndicated B-loan facility for which AfDB has also been appointed the arranger from lenders like Bank of China, Bank of Tokyo-Mitsubishi, CaixaBank, Citibank, HSBC, JP Morgan Chase, KfW IPEX Bank, Siemens Bank, and Standard Chartered, Eskom said.
The announcement comes shortly after Eskom CEO Brian Molefe stated that the power utility had secured 57 per cent of funding for 2016/2017.
“The African Development Bank continues to be a significant partner and a key contributor to the progress achieved by Eskom in the execution of the current build programme,” said Molefe following the utility’s announcement. “We are particularly grateful for the continued support in a time when Eskom has made major advancements in achieving operational and financial sustainability and expediently completing the build programme.”
Eskom’s US$17bn 2016-2020 capital expenditure programme, which includes investments in new generation, plant refurbishment, transmission lines and capacity building, is expected to help reduce load shedding and increase energy reliability in South Africa. AfDB estimates that this will help boost electricity generation in Africa by nearly 10 per cent, heralding progress toward the bank’s vision to achieve universal access to energy by 2025 under its ‘New Deal on Energy for Africa’ initiative.