The African Development Bank Group (AfDB) and South African power utility Eskom have signed a loan agreement of ZAR2.886bn ($206m) and $25m, which will be used to improve power transmission in Southern Africa.
Eskom contributes three quarters of the installed power generation capacity in the Southern African Power Pool and exports power to at least six countries in the region.
Eskom and AfDB have been in a partnership since 2009 when the bank approved the first facility of the utility’s capital expansion programme.
African Development Bank Group Southern Africa bureau director-general Kapil Kapoor said: “The AfDB and Eskom have had a long-standing partnership, through which the Bank is supporting the transformation of this critically important utility.
“The financing of the Eskom Transmission Project will result in a significant strengthening of South Africa’s transmission infrastructure.
“Not only will this improve the reliability and security of electricity supply, but will also allow for the integration of large-scale renewable energy into the transmission network, enhance network capacity for future load growth and ensure reduction in transmission losses.”
Under the new loan agreement, the company will take up construction of 552km consisting of 436km (of 400kV) and 116km of (132kV) transmission lines and associated substations across Mpumalanga and Kwa-Zulu Natal provinces, and upgrade substation equipment, including earthing systems at various existing substations in Mpumalanga.
The works are expected to translate to integration of distributed generation, mainly large-scale renewable energy, into the transmission network, ensure reliability and security of supply, reduction of transmission losses, improved regional integration and safety of operations and maintenance personnel.
Eskom acting chief financial officer Calib Cassim said: “We are encouraged by the level of support that we continue to receive from Developing Finance Institutions, such as the African Development Bank which continues to be a significant partner and a key contributor to the progress achieved by Eskom in the execution of the current capital expansion programme.
“We are particularly thankful for the continued support in a time when Eskom has made major advancements towards fully securing the R72 billion funding requirement for this year.
“These kinds of facilities are a demonstration of the Bank’s mandate to contribute to the economic development and social progress of African countries.”
Image: Eskom, AfDB sign loan agreement to improve power transmission in South Africa. Photo: Courtesy of Fré Sonneveld on Unsplash.