Eskom signs R6.1bil loan agreement

Friday, May 22, 2009

Johannesburg - Power utility Eskom has signed a R6.1billion loan agreement with seven European banks.

The loan was signed with HypoVereinsbank, a member of UniCredit Group, BNP Paribas, CALYON Cr,dit Agricole CIB, Commerzbank, KfW IPEX-Bank, Natixis and BHF-BANK.

The loan, which amounts to 530 million Euros, will be used to fund part of the foreign content of the Medupi boiler contract with Hitachi Power Europe and forms part of Eskom's ongoing funding for investment in infrastructure.

Eskom said the loan was payable over a 12-year period following the commissioning of units at the Medupi power station.

This station is expected to be the South Africa's first green field coal-fired station to be built in more than 20 years. The first unit of the Medupi is scheduled for completion in 2012 with the entire station completed by 2015.

"Securing power supply for present and future needs of the country remains Eskom's fundamental responsibility," said Eskom's Chief Executive Officer Jacob Maroga.

"Our debt capital raising activities are an integral part of financing Eskom's capital expansion programme and will complement other sources of funding such as the recent government support."

The load forms part of a 'sister' agreement to the KfW IPEX-Bank Fixed Rate ECA loan agreement signed by Eskom in September 2008. The combined financing amount is 780 million Euros (approximately R9 billion) covered by Germany's official Export Credit Agency.

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