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Project Finance Facility for Eskom

South Africa South Africa
Area Of Operation
Clean Energy and Energy Efficiency Clean Energy and Energy Efficiency

Quick Facts

Financing Approval Date
13 April 2016
Current Limit of NDB Financing
USD 180 million
Eskom Holdings State-Owned-Company Limited
Project Entity
Eskom Holdings State-Owned-Company Limited


More About This Project

The Republic of South Africa is the most developed economy in sub-Saharan Africa, yet it is facing strong headwinds from slowing growth. Frequent electricity shortages complicate the challenge for the economy from the supply side. According to the country’s National Treasury, GDP growth will increase by roughly 2% if the issue of electricity shortage is addressed. Securing energy supply and developing renewable energy are therefore the government’s main policy concerns. Coupled with electricity shortage, grid facilities are getting outdated. In this context, the New Development Bank’s (NDB) Project Finance Facility (PFF) is proposed to support the development of grid connection infrastructure, which is vital for the development of renewable energy projects.

With the objective to develop grid connection infrastructure, the NDB will provide a PFF loan of USD 180.0 million to Eskom Holdings State-Owned Company Limited (Eskom). The PFF project will be divided into sub-projects. Currently the project comprises 6 sub projects.

The PFF will support renewable energy development and reduce the country’s reliance on fossil fuels.

The project will be implemented by Eskom. Future subprojects can be proposed to NDB by Eskom up to a total term loan of USD 180.0 million. The selection of the sub-projects will be based on criteria including technical, environmental, social, developmental, economic and financial dimensions.

The project contributes to the reduction of the country’s reliance on fossil fuels. It will enhance the country’s capacity for renewable energy while achieving sustainable growth. It also aligns with NDB’s focus to support projects that aim at developing renewable energy sources. The project will integrate a total of 670 MW of renewable energy to the grid by Eskom. This accounts for 10% of the national target for renewable energy capacity from 2020 to 2021. The transmission lines, once developed, will help meet the demand for electricity in the implementation regions and lay a foundation for future renewable energy development. The environmental and social impacts of the project are contained in the Environmental Management Plan (EMP) which includes proposed mitigations to ensure minimal residual risk. Eskom shall monitor and ensure implementation of the EMP while ensuring full compliance with the South African legislative requirements and the NDB’s ESF.

The overall cost of the project is estimated to be Rand 7.7 billion. The proposed financing plan includes a term loan of USD 180.0 million from NDB and the remainder financed by Eskom.
Source of Fund Amount (USD million)
New Development Bank
Eskom 333
NDB Borrower and Project Entity
Africa Regional Centre

Jasmin Jakoet

Eskom Holdings State-Owned-Company Limited

Richard Vaughan (General Manager, Treasury)