The World Bank’s private-sector lender said on Wednesday it was in very early talks with Eskom on possible financing to help the power utility company boost capacity.
”We are in exploratory talks with Eskom,” an International Finance Corporation (IFC) spokesperson told Reuters. Although IFC mainly lends to private-sector companies in developing countries, it has recently increased lending to state-owned firms.
The spokesperson declined to discuss how far the talks had advanced or how much Eskom is looking to borrow.
Business Day reported on Wednesday that Eskom is seeking to borrow up to $1-billion a year over five years from the World Bank after a ratings downgrade made it difficult to access funding on international markets.
Financing by IFC would likely be more expensive than raising the funds on financial markets. But with global credit markets tightening, IFC funding could be more accessible to Eskom. Tapping World Bank funds would also give Eskom access to the institution’s expertise in power-sector development.
Eskom has said it intends to invest billions to boost electricity supply as demand outstrips supply in Africa’s biggest economy. A wave of blackouts has cost the government billions of rand in lost productivity and raised concerns among businesses over their investments. — Reuters