HomeIndustry SectorsFinance and PolicyEskom receives extra loan to strengthen its power transmission grid

Eskom receives extra loan to strengthen its power transmission grid

Eskom has signed a loan agreement with Agence Française de Développement (AFD) worth R1,5 billion (90 million) to support the utility in extending and strengthening its power transmission grid along the west coast of South Africa.

This loan constitutes the first tranche of a R6.5 billion (€400 million) multi-tranche loan facility signed between the two institutions in March 2017. Read more: AFD invests in Eskom clean power growth

This first tranche will be dedicated to financing of the Namaqualand Strengthening Phase 2: Juno Gromis Project, which aims to strengthen the power network in the Northern Cape Province, integrate renewable energy sources, and ultimately facilitate cross-border transmission.

The project will include the construction of a 282km 400kV line between the Juno substation in the Western Cape Province and Gromis substation in the Northern Cape Province, with associated feeder bays and transformer bays.

Construction is expected to start in early 2019.

Transmission development plan

The loan facility from AFD aims to support Eskom’s investment policy in strengthening its high-voltage electricity network, in order to ensure the integration of planned or under-construction renewable energy sources.

This is in line with Eskom’s Transmission Development Plan 2019-2028 (TDP) investment of R91 billion (€5.5 billion) for the construction of 6,535km of high voltage lines, and the installation of 45,900MVA of additional transmission capacity.

“This multi-tranche loan facility will contribute to Eskom’s plans to strengthen and refurbish the transmission infrastructure while diversifying our funding structures. AFD remains part of a core of longstanding partners to Eskom, and we regard the signing of this loan agreement as a formal yet symbolic gesture of a sustainable partnership in aiding Eskom to enhance the security of supply, and stabilise the power systems in South Africa. We look forward to executing future opportunities with AFD,” said Phakamani Hadebe, Eskom’s group chief executive.

Also commenting on the development, Christophe Farnaud, ambassador of France to South Africa, said: “This investment will enhance the reliability and security of electricity supply, improve the network capacity for future load growth, and will ultimately strengthen regional energy trade which is a very positive development for the region.”