$365-million renewable energy loan agreement

September 29th, 2011, Published in Articles: Energize

Eskom and the African Development Bank (AfDB) have signed two loan agreements for a total value of $365-million that will enable the first large-scale implementation of renewable wind and solar generation in Eskom’s history. The loans consist of $265-million from the AfDB’s own resources and $100-million from the resources of the Clean Technology Fund.

The loans are guaranteed by the South African government, consistent with the AfDB’s procedures. South Africa’s Minister of Public Enterprises, Malusi Gigaba, and Minister of Finance, Pravin Gordhan, signed the guarantee agreements. Eskom hopes to begin construction of its planned Sere 100 MW wind project at Vredendal, in South Africa’s Western Cape, early next year. In 2008, the AfDB approved and signed a first loan with Eskom of $500-million. In December 2009 the AfDB signed a further €1,86-billion-equivalent loan with Eskom for the Medupi power project.

Eskom CEO Brian Dames said: “These are exciting times for Eskom. We are committed to a cleaner energy future and we now have the capability to implement our large-scale wind and solar generation projects. We appreciate the roles the African Development Bank and the South African government have played in making this possible.”

AfDB President Donald Kaberuka, who signed the current loan agreements on behalf of his institution, said: “The AfDB is committed to supporting South Africa’s long-term plans for moving to a lower carbon growth path. Leveraging the disbursement of concessional climate Financing is essential to achieve economic viability of some of the clean technology solutions. These groundbreaking renewable investments by Eskom are quite timely, in the run-up to climate change meetings (COP17) They show that Africa can make a meaningful contribution to the global response to climate change, when given the financial incentives to do so.”

Finance Minister Pravin Gordhan said: “We are pleased at the confidence that the AfDB has shown in South Africa and in Eskom, and we thank the AFDB for its funding. This is an important step in securing funding which will enable Eskom to contribute to the realisation of South Africa’s commitment to diversify in its energy mix and reduce its carbon emissions over time.”

Public Enterprises Minister Malusi Gigaba said: “This loan will help to mobilise resources for the development of the Southern African region. It is consistent with the AFDB’s mission to promote economic growth and improve the living conditions of many. It is also true to Eskom’s purpose, which is to provide sustainable electricity solutions to improve the quality of life of the people of South Africa and of the region.”

Contacts Hilary Joffe, Eskom, Tel 079 679-9374,
mediadesk@eskom.co.za

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