Eskom says secures $1.4 billion in loan facilities from AfDB

July 7, 2016 1:09 PM

Eskom said in a statement on Thursday that the loan would be used to fund the general capital expansion programme, which includes new power plants, maintenance and refurbishment of generation, transmission and distribution facilities.

Workers are seen in front the construction site of Eskom's Medupi power station, a new dry-cooled coal fired power station, in Limpopo province, June 8, 2012.

South Africa's state-run power utility Eskom has secured a 20 billion rand ($1.4 billion) loan from the African Development Bank, the company battling to keep itself financially afloat said on Thursday.

Eskom supplies virtually all of the power for Africa's most industrialised economy and has shown signs of turning a corner over the past year after being forced to impose power cuts in the first half of last year owing to a supply shortage.

Earlier this week, the utility said it had secured 57 percent of the funding for its 2016/2017 financial year, while saying it had posted net profit of 4.6 billion rand in the year to March from 0.2 billion rand in the previous year.

The deal involves three loan facilities, including one which will see the AfDB act as an arranger for $965 million guaranteed syndicated B-loan facility from the Bank of China, Bank of Tokyo-Mitsubishi, CaixaBank, Citibank, HSBC, JP Morgan Chase, KfW IPEX Bank, Siemens Bank, and Standard Chartered.

Eskom said the principal debt on this loan would be settled five years after the signing date, while the other loans are payable over 20 years.

($1 = 14.6400 rand)