Cash-strapped Eskom has received another loan, shortly after gaining a cash infusion from Chinese investors. The latest loan comes from the African Development Bank (AfDB), and has been earmarked for the upgrade and expansion of Eskom’s transmission facilities.

The R2.886-billion loan will support the Eskom Transmission Improvement Project (ETIP), which will see the construction of 555km of 400kV transmission lines in KwaZulu-Natal and Mpumalanga and the upgrading of substation equipment and improvement of various substation earth mats in Mpumalanga.

The transmission lines will provide additional power evacuation paths for new generation capacity, ensure availability of power for future load growth, enable the reduction of network losses and ensure safety of personnel and assets during network operations to ensure compliance to the Grid Code. AfDB’s intervention will enable the provision of additional power evacuation paths to the network from the Kusile, Majuba, Drakensburg and Ingula power stations.

The loan includes additional co-financing of US$25 million from the Africa Growing Together Fund (AGTF). The Bank’s contribution, covered by a South African Government guarantee, will finance up to 77% of the critical project. Eskom will provide 15%.

These investments will enhance regional energy trade, end-user energy access for industrial development, and address the potential addition of 130 million on-grid connections by 2025, AfDB said in a statement, adding that the ETIP was identified in the Bank’s South Africa Country Strategy Paper and is consistent with its pillars of promoting industrialisation and deepening regional integration. The project is also consistent with the Bank’s ten-year strategy, it said.

“Efficient power trade within the Southern Africa Power Pool (SAPP) is hampered by system losses and weakening of the transmission capacity. Access to electricity in all SAPP member states (excluding South Africa), remains below 45% and is as low as 10% in Malawi. Eskom trades within the SAPP, selling electricity to, and buying from, member countries. Eskom is central to the realisation of the Bank’s New Deal on Energy for Africa strategy and the loan supports the Bank’s High 5 priorities,” the AfDB said. 


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