Eskom secures R2.8bn Medupi loan

11 September 2008

South African state electricity company Eskom has secured a €250-million (about R2.8-billion) export credit financing loan from Germany’s KfW-IPEX to fund part of its capital expenditure activities.

Eskom said in a statement this week that the loan would be used to partially finance the six boilers that the Hitachi Power consortium will supply for the construction of the new Medupi coal-fired power station, being built near Lephalale in Limpopo province.

Eskom recently began construction on the Kusile coal-fired power station near Witbank in Mpumalanga province, while work on Medupi began in April.

The first of Medupi’s six generating units will be commissioned by early 2011, with the last unit scheduled for commissioning by January 2015. The first of Kusile’s six generating units is scheduled for completion by 2013, followed by the completion on an additional unit after every eight months.

Eskom has also called for statements of qualification from local and international companies interested in investing in South Africa as independent power producers.

The signing of the loan agreement with KfW-IPEX, which took place at Eskom’s headquarters in Johannesburg, was attended by Eskom finance director Bongani Nqwababa and KfW-IPEX first vice-president Peter Purkl.

“The export credit financing loan is payable over 12 years after the commissioning of the units at Medupi power station,” Eskom said. “Eskom is expected to make draw down from this facility from the beginning of the new calendar year.”

KfW-IPEX and financial services group HSBC jointly arranged the export finance cover from the German federal government-backed export credit agency Hermes.

Speaking at the signing ceremony, Nqwababa said that Eskom’s partnership with KfW-IPEX was important in ensuring that Eskom continued to secure and stabilise South Africa’s power systems.

SAinfo reporter