Eskom receives R1.5 billion loan from French Agency

Power utility Eskom
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Eskom has received a R1.5 billion loan injection from the French Development Agency to support the power utility’s transmission efforts.

The French Development Agency is a public financial institution dedicated to fighting poverty and promoting sustainable development.

In a statement, Eskom says the loan constitutes the first portion of a R6.5 billion multi-tranche loan facility signed between the two institutions in March last year.

Eskom spokesperson Khulu Phasiwe says the market still believes in Eskom as a viable investment despite all its problems.

“The money will primarily go towards transmission development, but essentially its money that is going to help us extend electricity to the areas which currently do not have electricity at the moment.  So things are gradually shaping up and for the next 12 months we will be spending R 11.5 million on maintenance and that money has already been ring fenced so that it doesn’t go to any other areas but exclusively for maintenance.”

The loan comes as the African Development Bank (AfDB) in November announced plans to lend  Eskom, approximately $720 million (R10 billion) in 2019 and 2020, according to the bank’s president Akinwumi Adesina.

“We plan to lend around $620 million for the Medupi power plant and around $100 million for Eskom’s transmission network, but that still needs to be approved by the board,” said Adesina.

Earlier this year, the AfDB approved a separate loan of R2.9 billion to upgrade and expand Eskom’s transmission network.

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