Eskom secures $180 million from BRICS
SOUTH Africa’s power utility Eskom has secured a $180 million (R2.6 billion) loan for investment in transmission lines from the New Development Bank, a multilateral lender formerly known as the Brics Development Bank.
The money is for investment in transmission lines and the connection of electricity capacity from renewable energy projects into the national electricity grid.
It is part of a $811 million loan for clean energy projects in Brazil, Russia, India, China and South Africa.
Last month, the World Bank’s risk insurance and credit enhancement division backed Eskom’s loan with Deutsche Bank and Mizuho Bank to the tune of R11.9 billion.
Eskom plans to spend R213 billion to develop and strengthen the transmission network in the period to 2025, of which R30 billion will connect renewable energy, gas, coal and co-generation independent power producers (IPP) to the electricity system.
As South Africa commissions renewable energy projects as part of the renewable energy IPP procurement programme, Eskom is expected to invest in the power transmission system to support the higher capacity.
Eskom also needs money to connect the IPPs to the national grid. For instance in the renewable energy procurement programme’s rounds one to three, Eskom spent R2.4 billion on transmission and distribution infrastructure.
The government has procured 6,377 megawatts of electricity under the IPP programme.
Eskom spokesman Khulu Phasiwe said that development finance institutions such as Brics Development Bank were an important source of funding for Eskom.
Eskom chief executive Brian Molefe is chairman of the Brics Business Council South Africa.
The council is meant to strengthen economic ties, trade and investment with the business communities of the other Brics member countries.
The Brics Development Bank said that China’s Shanghai Lingang Hongbo New Energy Development Company would also receive an $81 million loan. The loan would fund 100MW of rooftop solar power, said the bank.
The Brazilian Development Bank said it would receive the biggest credit, worth $300m to help build 600MW of renewable energy capacity.
The bank would also provide a $250 million loan to India’s Canara Bank, with $75 million earmarked for 500MW of renewable-energy projects.
The New Development Bank is made up of Brics member nations — Brazil, Russia, India, China and South Africa. The bank has said clean energy would be part of its core focus.
The loans would run for 12 to 20 years. More plans were at various stages of consideration in the Development Bank’s pipeline, including loans to Russia, the Bank said. —Wires