Pretoria - Troubled state-owned power utility Eskom scored big on Tuesday, signing a US $2.5 million (about R33 billion) term facility agreement with the China Development Bank, in a bid to plug the holes in its balance sheet.
Eskom chief executive Phakamani Hadebe said the $2.5 billion loan agreement was "strategic" for the power utility both for investment and capital growth, and moved Eskom's funding for the year from 22 percent to 66 percent.
"This is a continuation of our funding and it moves us very close to concluding the funding for this year because after this funding we would have covered 66 percent of the funding for this financial year," Hadebe said on the sidelines of the signing ceremony.
"It comes at an opportune time. Yesterday when we were presenting the financials, we did highlight and emphasise that there will be other transactions that will be coming in and that in another two months or so, we expect to have concluded all our funding. It highlights the confidence that [China] has with us, but we are also seeing an increasing demand [of investors] in the domestic market which is great for us."
In July last year, Eskom signed a US $1.5 billion (about R19.6 billion) loan agreement with the China Development Bank (CDB) for financing part of the Medupi Power Plant.
On Tuesday, Hadebe signed the new agreement with the chairman of the China Development Bank, Hu Huaibang, at Union Buildings in Pretoria.
President Cyril Ramaphosa was hosting Xi Jinping, the president of the People's Republic of China, who began his state visit at the Union Buildings in Pretoria ahead of the BRICS meet on Wednesday.
Ramaphosa announced that South African and China had signed several agreements, including memorandums of understanding (MOUs) on investments, in which China has agreed to invest R14.7 billion in South Africa's various sectors such as; infrastructure, ocean economy, green economy, science and technology, agriculture, environment, as well as finance.