Eskom has signed a US$1,5-billion (approximately R19,6-billion) loan agreement with the China Development Bank (CDB). This is the second such loan the power utility has negotiated with CDB, the first being for $500-million last year. The period over which these amounts may be drawn by Eskom is said to be five years, with a 15-year payback at a “competitive but confidential” interest rate.
The facility is said to form part of the financing of the Medupi coal-fired power station, construction of which began in May 2007, and which is still incomplete – many years late and millions of rand over budget.
Dladla says the conclusion of this second loan agreement demonstrates the financial markets’ confidence in Eskom and South Africa notwithstanding current market conditions.
Eskom’s CFO, Anoj Singh, says that the Chinese loan helps to fulfill the power utility’s goal to diversify Eskom’s funding sources. He says he is confident that the utility’s liquidity levels and financial profile will continue to improve and stabilise.