France comes to the party with €1.2bn Eskom loan
- Branko Brkic
- 29 Dec 2009 10:27 (South Africa)
The French have clubbed together to loan Eskom a small part of the money required to start building its planned new coal-fired power stations. That'll make for some sighs of relief around the board table, and more forthcoming money from other financiers.
Thanks to underwriting by that country's export credit agency, five French banks have signed a 12-year, €1.19 billion loan for Eskom. That money will buy French turbines, from Alstom, for the Medpui and Kusile power stations.
The amount is relatively small in the face of the almost R400 billion that Eskom plans to spend on new infrastructure, but it will help lever open other wallets. Both the World Bank and the African Development Bank will be far more likely to grant favourable loans now.
The deal also gets the Treasury off the hook somewhat; it indicates that the current crop of government guarantees should be sufficient to see Eskom through its current round of begging, at least.