South Africa’s ailing state-owned power utility Eskom has secured a total of $1.1bn funding from the African Development Bank (AfDB) for its crucial capacity expansion programme.
AfDB’s board of directors has approved a $375mn senior corporate loan and a corresponding syndicated loan for up to $750mn to Eskom, which has been struggling to raise funds for its ambitious capacity expansion programme, while also failing to meet current electricity demand and thus contributing to the slowdown in the economy.
Eskom’s capacity expansion plan for the 5-year period to 2020 envisages maintenance and upgrade of nearly 8,000MW of installed capacity and adding of 10,986MW new capacity, including a 1,332MW renewable energy peaking station. It targets also an expansion of Eskom’s transmission network by 9,756km. The plan will not only address the country’s power shortages but also restore South Africa’s role as electricity exporter, AfDB said.
In 2009, Eskom received a €1.86bn loan from AfDB to finance its 4,800MW coal-fired Medupi power station. The first 800MW unit of the long delayed project was launched at end-August.
Eskom, which supplies some 95% of South Africa’s electricity, operates and maintains 42,790MW of generating capacity, mainly at coal-fired plants.
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