The African Development Bank's (AfDB) 2007 annual report, released last week in Maputo at the bank's annual conference, has revealed the approval of a UA330.04mn (US$500mn) loan to fund South African power company Eskom.

The loan carries a 20- year tenor, including a 5-year year grace period.

The bank was responding to what the report called an "unprecedented situation” necessitating major investment to sustain South Africa's economic growth rate and governmental objectives of universal electricity access by 2012. The report also notes that the loan agreement is strongly aligned with the AfDB's focus on encouraging regional infrastructure co-operation, with Eskom planning to "source 15% of its power from neighbouring countries through the construction of transnational high volume transmission lines”.

The facility is expected to be utilised to commission several power generation projects up to 2014, as well as satisfying the energy needs of industrial concerns in the country.

Eskom is state owned and operates as one of the ten biggest global power companies in terms of sales and capacity.