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Publish Date : 22-Mar-2017

South African electricity public utility Eskom has accomplished the signing of a multi-tranche framework agreement worth R6 billion with the French bi-lateral development finance institution Agence Franaise de Development (AFD) to fund its investment plans for the expansion and strengthening of the power transmission grid of Eskom.

The Eskom CFO Anoj Singh has disclosed in an official statement that the loan package will facilitate the company to reinforce and revamp its transmission infrastructure, at the same time helping the power utility diversify its funding structures.

Singh stated, "AFDs funding will be allocated towards transmission lines and substations that support grid strengthening in areas where the development of future renewable energy sources are envisaged."

Moreover, it will assist in the development of cross border transmission projects. On the other hand, the funding will complement the international strategy of the French agency to channelize half of its funding towards project developments, delivering an additional benefit of climate change.

The CEO of AFD Rmy Rioux has revealed that the donor agency is dedicated to support Eskom as a major financial partner and the newly offered money is a clear reflection to this pledge.

The AFD CEO disclosed, "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 value-added assistance, such as in the field of renewable energy production, renewable energy-related grid reinforcement and expansion, as well as technical knowledge sharing."

The AFD has offered approval for such multi-tranche facility for the first time in Africa.

The French donor has decided to provide this funding to Eskom to financially help its project development plans, which meet eligibility conditions as per the agreement between AFD and Eskom, like the Transmission Development Plan of Eskom.

This scheme of the South African power utility will facilitate in evacuating the renewable energy including the operational ones and future capacities as well as assisting to set up cross-border networks for power transmissions.

In the year 2007, AFD forged its partnership with Eskom for the first time via offering financial helps for the Sere wind farm. Moreover, the lender recently has signed a package worth 150m (R2.3bn) to facilitate Eskom to fund its distribution network investments.

The partnership grant, which has been approved by the AFD and the French Finance Ministry, will also result in the exchange of proficiency, experience and expertise amid the two utilities involving different fields, including the smart grid space.

The Chief Executive of Eskom group Matshela Koko revealed, "We appreciate AFDs long standing commitment and support and are pleased that we can continue the valuable partnership with this organisation.

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