South Africa-based Eskom has signed a $1.5bn loan agreement with the China Development Bank (CDB) for financing the Medupi power plant near Lephalale, Limpopo.
The Medupi coal-fired plant features six generation units, which are capable of generating a combined 794MW of power. The first of these units was synchronised to the country’s national grid in March 2015.
Eskom’s interim group chief executive officer (CEO) Johnny Dladla said: “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.”
Eskom’s chief financial officer Anoj Singh added: “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.”
Once completed, the Medupi power station will produce 4,800MW of power. During construction, 8,000 jobs are expected to be created.
Construction activities on the project started in May 2007 and around 40% of the project cost is expected to be spent locally.