Eskom has secured a $180 million loan, which will be used to expand South Africa’s renewable energy efforts.
The New Development Bank (NDB) and Eskom signed a loan agreement for Renewable Energy Integration and Transmission Augmentation Project.
Under the agreement, the NDB will provide a loan with sovereign guarantee to the power utility.
The agreement was signed by NDB Vice President and Chief Operations Officer (COO) Xian Zhu, and Eskom’s Chief Financial Officer (CFO) Calib Cassim, at the 4th Annual Meeting of the New Development Bank in Cape Town on Monday.
“The successful conclusion of this inaugural transaction with NDB will significantly contribute towards driving Eskom’s goals to reduce South Africa’s CO2 emissions. Eskom welcomes the support from the NDB and we look forward to fostering a valuable partnership with this organisation, whose mission is to enhance infrastructure for sustainable development in its member countries,” Cassim said.
The New Development Bank’s Project Finance Facility (PFF) will be used to support the development of grid connection infrastructure, which is vital for the development of renewable energy projects. The PFF will also support renewable energy development and reduce the country’s reliance on fossil fuels.
The project will integrate a total of 670 MW of renewable energy into the power utility’s grid.
Modern grid connection infrastructure will be used for renewable energy projects and augmentation of the Eskom transmission network to identified areas. The project will also help increase electricity supply to the targeted areas for sustainable development.
Eskom said the project will enhance the country’s capacity for renewable energy, while achieving sustainable growth. It also aligns with the NDB’s focus to support projects that aim at developing renewable energy sources.
Xian said the bank is happy to support the project.
“We are happy to support this important project that will contribute to the development of grid connection infrastructure in South Africa and support the shift to a more sustainable energy path in the country.
“The project is coherent with the bank’s focus on projects that incorporate sustainability from their inception. Moreover, we believe that supporting South Africa’s energy sector is fully in line with the Bank’s mandate and our role as a reliable development partner,” he said.
The NDB was established by Brazil, Russia, India, China and South Africa (BRICS) to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.