The €530m (R6.1bn) loan deal, signed by state-owned South African power company Eskom in late May, was structured as an Export Credit Agency (ECA) covered loan with a group of seven European banks. The 12 year financing forms part of a package of loans, the first of which was signed in September 2008, which totals €780m and is backed by Germany’s ECA.
Eskom chief executive Jacob Moroga said that securing the power supply for the present and future needs of the country was the company’s “fundamental responsibility”. “Our debt capital raising activities are an integral part of financing Eskom’s capital expansion programme and will complement other sources of funding such as the recent government support,” he said. The money will be used to fund part of the Medupi boiler contract with Hitachi Power Europe.
Power generation has shot up the political agenda since 2008 after rolling power cuts swept across the country when Eskom failed to meet the increasing demand for electricity.
