The African Development Bank (AfDB) has approved a R2.87-billion loan for South Africa’s State-owned power utility, Eskom, for the upgrade and expansion of its transmission facilities.

The funding supports the Eskom Transmission Improvement Project (ETIP), which will see the construction of 555 km of 400 kV transmission lines in KwaZulu-Natal and Mpumalanga, as well as the upgrading of substation equipment and the improvement of various substation earth mats in Mpumalanga.

The transmission lines will provide additional power evacuation paths for new generation capacity, ensure availability of power for future load growth, enable the reduction of network losses and ensure the safety of personnel and assets during network operations to ensure compliance with the grid code.

The AfDB’s intervention will enable the provision of additional power evacuation paths to the network from the Kusile and Majuba power stations and its Drakensberg and Ingula pumped- storage scheme. It will also benefit Eskom’s corporate restructuring and governance programme.

The ETIP aligns with government’s National Development Plan 2030, geared towards financing infrastructure to support the country’s medium- and long-term economic and social objectives.

The ETIP was identified in the bank’s South Africa Country Strategy Paper and is consistent with its pillars of promoting industrialisation and deepening regional integration. The project is also consistent with the bank’s ten-year strategy, which covers the period 2013 to 2022.

The loan includes an additional cofinancing of $25-million from the Africa Growing Together Fund. The bank’s contribution, covered by a South African government guarantee, will finance up to 77% of the critical project. Eskom will provide 15%.

These investments will enhance regional energy trade, end-user energy access for industrial development and address the potential addition of 130-million on-grid connections by 2025.