Eskom gets R2.5bn loan for two power plants

2011-06-01 12:39

The African Development Bank had approved a $365 million (R2.5 billion) loan to Eskom for two power plant projects, Public Enterprises Minister Malusi Gigaba said today.

“I am happy to inform this august sitting that the African Development Bank approved a $365m loan to Eskom for the 100MW Concentrated Solar Power Plant and the 100MW Wind Power Plant,” Gigaba said. He was delivering his budget vote speech in Parliament.

These projects are part of Eskom’s plan to address South Africa’s commitment to carbon reduction and clean energy.

In line with the Integrated Resource Plan, Eskom has incorporated renewable energy projects into its build programme, said Gigaba.

“Having received firm government support, work is ongoing to find sources of funding to further strengthen Eskom’s balance sheet without placing undue pressure on the fiscus,” he said.

The department expected an outcome on Eskom’s $250 million loan application to the World Bank for funding from the Clean Technology Fund later this year.

He said Eskom’s core responsibility was to ensure the security of electricity supply, particularly as reserve margins get tight until new capacity was built.

“This will require close monitoring of the extent and effectiveness of Eskom’s maintenance practices and the company’s technical plan as a whole.”

Eskom’s rolling capital investment programme had climbed from R92 billion in 2005 to R549 billion to date.

Gigaba said the department was working hard to ensure that the funding of the capital investment programme was in place while ensuring that the roll-out of the programme was timeous and efficient.

Eskom was also working on its next-generation supplier development plan to ensure that the impact of this expenditure was optimised.

Gigaba said the department was also monitoring Eskom’s role in future energy provision.

But he said Eskom’s programme alone would not guarantee security of supply and the country would need additional investment in new electricity generating capacity, which must be secured from the private sector over the next few years up to the delivery of the first unit of the Medupi power station.

Through its Medium-Term Power Purchase Programme, Eskom signed contracts with five Independent Power Producers since April 2010, totalling 373MW of capacity, said Gigaba.

“They also signed up about 200MW of municipal generation just for this winter.” 

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