HomeIndustry SectorsFinance and PolicyEskom and AfDB sign US$365 million loan agreements

Eskom and AfDB sign US$365 million loan agreements

Washington DC, United States — ESI-AFRICA.COM — 27 September 2011 – South African national power utility Eskom Holdings and the African Development Bank (AfDB) have signed two loan agreements for a total value of US$365 million that will enable the first large-scale implementation of renewable wind and solar generation in Eskom’s history.

An I-Net Bridge report in Business Report, carried on the Eskom website, says the loan signing ceremony took place here on the sidelines of the 2011 World Bank/IMF Annual meetings.

The loans consist of US$265 million from the AfDB’s own resources and US$100 million from the resources of the Clean Technology Fund, a climate investment fund that promotes the transfer of low carbon technologies.

The loans are guaranteed by the South African Government, consistent with the AfDB’s procedures. South African minister of public enterprises Malusi Gigaba and minister of finance Pravin Gordhan signed the guarantee agreements.

Approved by the AfDB board in May, the loans will further Eskom’s commitment to reduce its carbon footprint. The company hopes to begin construction of its planned Sere 100 megawatt (MW) wind project at Vredendal in the Western Cape early next year.

The AfDB financing is part of a broader funding plan for Eskom’s renewable projects, which includes sourcing from other development finance agencies.

Eskom CEO Brian Dames said: “We are committed to a cleaner energy future and we now have the capability to implement our large-scale wind and solar generation projects. We appreciate the roles the African Development Bank and the South African government have played in making this possible.”

AfDB President Donald Kaberuka, who signed the current loan agreements on behalf of his institution, said: “The AfDB is committed to supporting South Africa’s long-term plans for moving to a lower carbon growth path. This is a priority action area for the AfDB.”