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Eskom signs R20bn loan agreement with China to finance Medupi

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Eskom and China have signed a deal that will see the eastern country loaning the power utility almost R20 billion to finance the Medupi power plant.

The loan agreement for R19.6 billion was signed yesterday between Eskom and the China Development Bank (CDB) at a signing ceremony held at utility’s head office Megawatt Park in Sunninghill, Johannesburg.

“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 aide us in ensuring that we complete the Medupi project and ensure security of energy supply,” said acting Eskom CEO, Johnny Dladla.

“The loan fulfils our intent to diversify Eskom’s funding sources; to date Eskom has secured 77% of this fiscal year’s funding requirement (including cash on hand), we remain resolute that we will fully execute the required funding for the year. We are confident that our liquidity levels and financial profile will continue to improve and stabilise,” added Eskom CFO, Anoj Singh.

Medupi was officially opened in August 2015 by President Jacob Zuma.

Exactly a year ago, Eskom was granted a R20 billion loan from from the African Development Bank (AfDB) to finance Medupi and Kusile.