South Africa power utility firm Eskom gets AfDB funding
South Africa power utility firm Eskom has received approximately US$1.4b loan from the African Development Bank (AfDB). A statement from Eskom said the bank has approved the funding from its private sector window
“Eskom has concluded and signed three loan facilities with the AfDB. The AfDB approved the provision of the following financing to Eskom from the bank’s private sector window. $365 million unguaranteed senior unsecured loan and $10 million guaranteed A-loan.”
Consequently, the bank will give $365 million loan facility to Eskom in rand equivalent (R5 billion).
Eskom has appointed the AfDB as arranger for an additional US$965 million guaranteed syndicated B-loan facility from a number of commercial lenders.For instance ,Bank of China, Citibank, Bank of Tokyo-Mitsubishi and CaixaBank. Additionally, the banks seeks loans from JP Morgan Chase ,HSBC, KfW IPEX Bank, Siemens Bank and Standard Chartered.
The A-loan and the senior unsecured loan are payable over a period of over 20 years with a two-year grace period for both loans from the date of signing.
The principal debt on the B-loan will be settled in five years after its signing date. on the other hand, other terms relating to the funding were negotiated at competitive Development Finance Institutions (DFIs) market-related rates.
Capital expansion programme
The signed loan facilities will go to funding the general capital expansion programme. It includes new build; maintenance and refurbishment of generation, transmission and distribution infrastructure and skills upgrading programme.
Eskom’s Group Chief Executive Brian Molefe applauded the AFDB saying the bank has been a key development of Eskom . Equally, he thanked the bank for the continued support that has seen Eskom advance to greater levels.
“These facilities are a demonstration of the Bank’s mandate to contribute to the economic development and social progress of African countries,” said South Africa power utility Group Chief Executive Brian Molefe.