The New Development Bank and Eskom have signed a R2.6 billion loan agreement for Renewable Energy Integration and Transmission Augmentation Project. Picture: Mike Hutchings/Reuters/African News Agency (ANA)

Cape Town -  The New Development Bank (NDB) and Eskom on Monday signed a R2.56 billion loan agreement for Renewable Energy Integration and Transmission Augmentation Project. 

The NDB is a development bank established by the BRICS (Brazil, Russia, India, China and South Africa) bloc of countries.

Under the agreement, the NDB will provide a loan with sovereign guarantee to Eskom with an amount of $180 million (R2.56 billion).

The loan agreement was signed by Xian Zhu, NDB Vice President and Chief Operations Officer (COO), and Calib Cassim, Chief Financial Officer (CFO) of Eskom, during the 4th Annual Meeting of the New Development Bank in Cape Town, South Africa.

The New Development Bank’s Project Finance Facility (PFF) will be used to support the development of grid connection infrastructure, which is vital for the development of renewable energy projects. The PFF will also support renewable energy development and reduce the country’s reliance on fossil fuels.

The project will integrate a total of 670 MW of renewable energy into the Eskom’s grid. Modern grid connection infrastructure will be used for renewable energy projects and augmentation of the Eskom transmission network to the identified areas. The project will also help increase electricity supply to the targeted areas for sustainable development.

The project will enhance the country’s capacity for renewable energy while achieving sustainable growth. It also aligns with the Bank’s focus to support projects that aim at developing renewable energy sources.

Xian Zhu: “We are happy to support this important project that will contribute to the development of grid connection infrastructure in South Africa and support the shift to a more sustainable energy path in the country. The project is coherent with the bank’s focus on projects that incorporate sustainability from their inception. Moreover, we believe that supporting South Africa’s energy sector is fully in line with the bank’s mandate and our role as a reliable development partner.”

Cassim said: “The successful conclusion of this inaugural transaction with NDB will significantly contribute towards driving Eskom’s goals to reduce South Africa’s CO2 emissions. Eskom welcomes the support from NDB and we look forward to fostering a valuable partnership with this organisation whose mission is to enhance infrastructure for sustainable development in its member countries.”

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