South Africa’s plan to secure its power system by scaling up renewable energy generation and strengthen its transmission network has been boosted by a massive loan granted by German Development Bank KfW.
Government welcomes the R4 billion loan, which has been secured at favourable terms and a significantly lower interest rate as a result the sovereign guarantee that it has made available for Eskom.
The loan is part of Eskom’s approved funding plan and will run over 15 years with capital repayments only after the first 5 years. The loan will be repaid in Rands which frees up banking lines for other financing transactions.
“The loan comes at a critical juncture in our national effort to stabilise the national grid and Eskom’s finances. It allows all us the space to diversify our energy sources and ensure more sustainable power generation,” said Government Communication and Information System, Acting Director General, Donald Liphoko.
The money will be used to build the Kiwano solar thermal power station in Upington, Northern Cape and the Ingula Pumped Storage Scheme in Braamhoek, KwaZulu-Natal. The completed Kiwano solar thermal power station will add 100MW to the national grid while Ingula will provide an additional 1 332MW.
Government is working to radically transform the country’s energy sector and has developed a sustainable energy mix in which renewable energy makes up a significant portion of 11,4 Gigawatts.
The Integrated Resource Plan (IRP) 2010 – 30 details our energy mix which allows for a balance between energy sources, ensures a reliable source of power to meet the country’s growing needs and allows us to reach our carbon reduction targets.
Mr Liphoko added that the KfW loan will supplement the R20 billion in funding that Government has committed to Eskom. It gives Eskom the necessary space to ensure that the country’s energy security is maintained.
Acting Director-General: Government Communication and Information System
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