HomeIndustry SectorsFinance and PolicyEskom sizes up $1bn loan for clean power

Eskom sizes up $1bn loan for clean power

Steve Lennon,
Eskom MD
15 October 2010 – Eskom may get $1bn in World Bank funding for renewable energy projects, a Treasury official said yesterday, as the utility signals a decisive shift from coal to “clean” power sources.

With investment in coal-fired plants set to decrease in line with the government’s proposals in its draft integrated resource plan released last week, Eskom’s new investments — after the Kusile coal-fired plant — are likely to focus on renewable energy.

Steve Lennon, Eskom MD for corporate services, said this week that “as a minimum” the utility wanted to commission almost 2000MW of solar thermal energy by 2030, “but with a possibility of a lot more, depending on how the business case comes out”.

But in Eskom’s 2010 annual report, Mr Lennon said funding for renewable energy was a stumbling block. Funding constraints have delayed Eskom’s renewable energy investments. About $260m of the $3,75bn World Bank loan Eskom received this year has been earmarked for investment in renewable energy projects.

The Treasury said yesterday there were plans for Eskom to get more World Bank funds.

“There is an opportunity for Eskom to access (or) to open up credit lines (with) the Clean Technology Fund of the World Bank. At this stage we are looking at the option quite seriously. It would be a figure in the vicinity of 1bn and it will happen very soon, certainly before the end of this financial year,” Lungisa Fuzile, the Treasury’s head of asset and liability management, said.

Eskom plans to ramp up research and development in renewable energy and is “identifying its funding requirements in that regard”. Renewable projects include a 100MW concentrated solar power project with storage in Upington, Northern Cape, and a 100MW wind project.

Eskom already gets hydropower from Cahora Bassa in Mozambique and its own power stations. It is also building the 1332MW Ingula pump storage scheme.

“Eskom intends to increase its research and developmental efforts in solar, wind, bio-mass, and hydro,” the utility said.