The African Development Bank group (AfDB) and South African power utility Eskom on Tuesday signed a loan agreement to the value of nearly R2.9-billion and about $25-million, to improve power transmission across Southern Africa.
This project contributes to the realisation of the AfDB’s New Deal on Energy in Southern Africa, one of the bank’s priority development areas, by ensuring capacity to add new connections in South Africa and the rest of the Southern African region.
AfDB Southern Africa bureau director-general Dr Kapil Kapoor said the AfDB and Eskom have had a long-standing partnership, through which the bank is supporting the transformation of this critically important utility.
He explained that the financing of the Eskom transmission project will result in a significant strengthening of South Africa’s transmission infrastructure.
“Not only will this improve the reliability and security of electricity supply but it will also allow for the integration of large-scale renewable energy into the transmission network, enhance network capacity for future load growth and ensure reduction in transmission losses,” he explained.
Building on these successes, the new loan agreement will see the construction of 552 km compising 436 km of 400 kV and 116 km of 132 kV transmission lines and associated substations across Mpumalanga and KwaZulu-Natal provinces, as well as the upgrade of substation equipment, including earthing systems at various existing substations in Mpumalanga.
It is anticipated that this will translate to the integration of distributed generation, mainly large-scale renewable energy, into the transmission network; and ensure reliability and security of supply, reduction of transmission losses, improved regional integration and safety of operations and maintenance personnel.
“We are encouraged by the level of support that we continue to receive from development finance institutions, such as the AfDB, which continues to be a significant partner and a key contributor to the progress achieved by Eskom in the execution of the current capital expansion programme,” Eskom acting CFO Calib Cassim said.
“We are particularly thankful for the continued support at a time when Eskom has made major advancements towards fully securing the R72-billion funding requirement for this year. These kinds of facilities are a demonstration of the bank’s mandate to contribute to the economic development and social progress of African countries,” he added.