Zuma supports Eskom loan

2009-11-24 11:33

President Jacob Zuma has written a letter to the World Bank to

support a $3,75 billion (about R28 billion) loan application by Eskom, Sake24

reported today.

“The president wrote the letter to emphasise how important Eskom’s

development programme is for South Africa,” National Treasury head Thoraya Pandy

told Sake24.

The government has also given guarantees for the loan. It could be

approved early next year. The money would be used to finance, among other

things, the construction of a solar-power installation at Upington, a railway

line in Mpumalanga and the Medupi coal-fired power station near Lephalale in


The electricity utility has been negotiating with the World Bank

for four years and initially asked for $5 billion.

Eskom is under severe financial pressure to expand its capacity and

has applied for permission to hike its tariffs by 45% per year for three

consecutive years, much to the ire of consumer groups.

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