Eskom gets €530m European loan
22 May 2009
Eskom Holdings has signed a €530-million (approximately R6.1-billion) loan agreement with seven European banks to help fund its capital expansion programme, the South African state electricity company said on Thursday.
"This loan 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 activities for its investment in infrastructure," Eskom said in a statement.
Eskom's Medupi coal-fired power station is being built near Lephalale in Limpopo province.
The loan agreement was signed between Eskom as borrower and as mandated lead arrangers HypoVereinsbank (Member of UniCredit Group), BNPParibas, Calyon Credit Agricole CIB, Commerzbank, KfW IPEX-Bank, Natixis and as lead arranger BHF-Bank.
The multi-lender loan is payable over 12 years after the commissioning of the units at Medupi power station.
"This is a 'sister' agreement to the KfW IPEX-Bank fixed rate export credit agency (ECA) loan agreement signed by Eskom in September 2008," the company said.
The combined financing amount is €780-million (approximately R9-billion) covered by Germany's official export credit agency.
"Given the current status of the international financial markets, the financing opportunities available to the company and the competitive financing terms of this loan, Eskom views the ECA type of financing as a critical component of the overall financing plan," said Eskom CEO Jacob Maroga.
Securing power supply for present and future needs of the country remained Eskom's fundamental responsibility, Maroga said.
"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."
In February, the government approved guarantees totalling R175.87-billion over five years in support of Eskom's capital expansion programme, in light of the critical role the state power company plays in the economy.
Sapa
