[ 2017-03-20 ]

S.A’s Eskom signs R6bn deal with France’s AFD
Eskom and AFD today signed a R 6 billion (€400
million) multi-tranche framework agreement to
support Eskom investments in the extension and
reinforcement of its power transmission grid.


Eskom’s Chief Financial Officer Anoj Singh said:
“This multi-tranche loan facility will
contribute towards Eskom plans to strengthen and
refurbish the transmission infrastructure while
diversifying our funding structures.”


AFD’s funding will focus on transmission lines
and substations that support grid strengthening in
areas where the development of future renewable
energy sources are envisaged as well as to support
the facilitation of cross-border transmission
projects. As such, the funding will contribute to
AFD’s global objective of dedicating 50% of its
funding to development projects that have a
climate change co-benefit.


AFD’s Chief Executive Officer, Rémy Rioux,
said: “This new funding to Eskom reiterates the
willingness of AFD to be a key financial partner
of the South-African utility. Since the beginning
of our engagement with Eskom, almost 10 years ago,
we have made the choice to focus our support on
targeted areas where we believe a development
finance institution like AFD can provide the most
value-added, i.e. renewable energy production,
renewable energy related grid reinforcement and
expansion, as well as technical knowledge
sharing.”


This funding represents the first multi-tranche
facility approved by AFD in the African continent.
This new instrument recently developed by AFD
opens a 3-year window during which the funding is
made available to Eskom to finance projects that
are compliant with eligibility criteria that have
been agreed upon between AFD and Eskom, namely: be
part of Eskom’s Transmission Development Plan,
contribute to the evacuation of the renewable
energy (existing or future) and/or facilitate the
development of cross-border transmission
networks.


This multi-tranche facility provides Eskom with
mid-term visibility on the availability of funding
for its Transmission Development Plan. It also
reinforces AFD’s position as a long-term partner
of the South-African power utility – since its
first €100 million financing approved in 2007
for the Sere wind farm, and the recent signing a
€150 million (R2.3 billion) facility to support
Eskom investments in the distribution network.


The multi-tranche facility has been approved while
the partnership between Eskom and Électricité de
France (EDF) – that was entered into in November
2015 – is completed. The partnership grant
provided by AFD and the French Ministry of Finance
focused on knowledge, experience and expertise
sharing between the two utilities, on various
areas, including smart grids. The partnership has
produced recommendations that will improve
performance in terms of system efficiency and
reliability. The multi-tranche facility will build
on the results of this partnership to develop
projects.

“We appreciate AFD’s long-standing commitment
and support and are pleased that we can continue
the valuable partnership with this organisation
whose mission is to improve and support Africa’s
energy development goals and mobilise resources
for the continent’s economic and social
development”, said Eskom’s Interim Group Chief
Executive Matshela Koko.

Source - CNBC Africa

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