ABN - Eskom has signed a US$1.5 billion loan agreement with China Development Bank (CDB) to finance its large-scale Medupi coal power plant.
The state-run South African utility giant confirmed it had secured funding from China for the power plant at a signing ceremony in Johannesburg.
The Medupi power plant is set to become the world’s fourth largest coal-fired plant, producing 4,800MW of energy. It is due to begin commercial operation in 2018 and has already passed several installation milestones.
Interim group chief executive Johnny Dladla said: “We are pleased to see the continuation of the journey of co-operation that we started with our Chinese partners last year.
“The conclusion of this second loan agreement continues to demonstrate financial markets’ confidence in Eskom and South Africa notwithstanding the challenging market conditions.
“We are confident that the agreement will cement Eskom’s relationship with the CDB. This loan will also aid us in ensuring that we complete the Medupi project and ensure security of energy supply.”
Eskom’s chief financial officer Anoj Singhn confirmed that the loan would be paid back to the CDB over a period of 15 years.