Eskom’s R33.4bn loan deal with China Development Bank

Eskom has signed a $2.5-billion government-backed loan with the China Development Bank, which will be used for construction of Kusile power station.

The loan agreement was signed on Tuesday following bilateral talks between the Chinese President Xi Jinping and President Cyril Ramaphosa.

During the address by the two heads of state, Ramaphosa announced that China and South Africa countries also signed a number of trade agreements totalling $14.7-billion (about R196-billion at current exchange rates).

Eskom Chief Executive Phakamani Hadebe said the loan was part of the cash-trapped power utility’s funding requirement for the financial year, which is currently at 62%.

He said the loan demonstrated confidence in Eskom’s new leadership since the appointment of a new board in January.

“This is a normal loan, effective as from the day of the signing … the loan would help us ease some of the liquidity challenges we are facing,” said Hadebe.

READ MORE: Eskom reveals billion rand losses in annual financial results

“What has been happening is that as up until last year, Eskom was under a lot of pressure when it comes to funding.

From the beginning of January when a new a new board was created, we began to see an increasing appetite in investors. This loan is just in line with that,” he added. 

Once complete, the coal-powered Kusile power station — which has been under construction since 2008 — will have an output of 4 800MW.

The loan comes as global financiers such as the World Bank had said they would no longer be funding coal power projects, as they have shifted their focus to renewable energy.

Hadebe said he was comfortable that the power utility would in two months’ time be able to reach up 80 to 90% of its funding requirement.

“We are in a better position than before.”

On Monday, Eskom announced a net loss of R2.3-billion for the financial year ended March 31, with R19-billion in irregular spending since 2012.

Xi’s visit to South Africa came ahead of the Brics summit, which starts in Johannesburg on Wednesday.

Prior to coming to Pretoria, Xi visited Senegal and Rwanda, as part of a whistle-stop tour to cement relations with African allies. — Fin 24

Advertisting

Save Fort Hare and stop with the theatrics

The university with its rich history is not only the pride of the Eastern Cape but of the continent. It needs to regain its glorious status in academia and not only be in the news for unfortunate reasons

Trolley tender causes Acsa eruption

Stolen contract exposes rift in the senior ranks at the state airport’s management companies

Unions slam move to cut wage bill

Cosatu rejects job losses and a wage freeze for public servants, calling this ‘a declaration of war’

Press Releases

Scatec Solar begins another Upington project

SPONSORED Scatec Solar and partners have once again grid connected in the ZF Mgcawu District, and started early...

Over R400-m given to businesses since launch of three-minute overdraft

The 3-minute overdraft radically reduces the time it takes for businesses to have their working capital needs met

Tourism can push Africa onto a new path – minister

The continent is fast becoming a dynamic sought-after tourist destination

South Africa’s education system is broken and unequal, and must be fixed without further delay

The Amnesty International report found that the South African government continues to miss its own education upgrading targets

Business travel industry generates billions

Meetings Africa is ready to take advantage of this lucrative opportunity

Conferences connect people to ideas

The World Expo and Meetings Africa are all about stimulating innovation – and income