JOHANNESBURG - Embattled power utility Eskom and the African Development Bank (AfDB) yesterday signed a R2.886 billion and $25million (nearly R346m) loan agreement to improve power transmission in Southern Africa.

AfDB said the loan would see the construction of hundreds of kilometres of transmission lines and sub-stations across the provinces of Mpumalanga and KwaZulu-Natal.

AfDB director-general for southern Africa bureau Dr Kapil Kapoor said it would also be used for the upgrade of sub-station equipment, including earthing systems at various sub-stations in Mpumalanga.

Kapoor said the bank had a long-standing partnership with Eskom.

“The financing of the Eskom Transmission Project will result in a significant strengthening of South Africa's transmission infrastructure,” said Kapoor.

“Not only will this improve the reliability and security of electricity supply, but will also allow for the integration of large-scale renewable energy into the transmission network, enhance network capacity for future load growth and ensure reduction in transmission losses.”

Eskom contributes nearly three-quarters of the total installed power generation capacity in the Southern African Power Pool and exported power to at least six countries in the region including Zimbabwe, Lesotho, eSwatini, Namibia, Mozambique and Zambia.

Acting chief financial officer Calib Cassim said: “We are particularly thankful for the continued support in a time when Eskom has made major advancements towards fully securing the R72bn funding requirement for this year. These kinds of facilities are a demonstration of the bank's mandate to contribute to the economic development and social progress of African countries.”

This month Eskom implemented stage 1 load shedding after supply at its coal power stations dwindled to only 10 days' worth.

Eskom chief executive Phakamani Hadebe said the utility had to take painful decisions to guarantee its survival. He said Eskom would implement the nine-point plan to address pressing challenges bedevilling the state-owned enterprise, including fixing full load losses and trips, fixing coal stockpile issues and addressing challenges at new plants, among others.

Eskom needs about R60bn a year to finish the building of Medupi and Kusile power stations.

Last month, Akinwumi Adesina, the AfDB president, said the bank planned to lend Eskom about R10bn next year and in 2020. Earlier this year the AfDB approved a separate loan of R2.9bn to upgrade and expand Eskom's transmission network.

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