Eskom draws in European investors

Two European banks have agreed loans totalling €171.7mn (US$220.6mn) for South Africa’s state-run power producer Eskom.

Deutsche Bank and Crédit Agricole CIB are acting as sole arrangers, agents and lenders for their loans which total €108mn and €63.7mn respectively.

The Deutsche loan, which is covered by Germany’s export credit agency (ECA) Hermes, will fund 85% of the German and Japanese contract for a new Voith Hydro turbine pump capable of producing 1,352 megawatts (MW) of power.

The Crédit Agricole loan benefits from ECA backing through France’s Coface and will be used to fund Eskom’s 4,800MW Medupi power project.

“Eskom continues to view ECA-type financing as a critical component of the overall financing plan,” the power company says in a statement.

Crédit Agricole’s interest in the deal comes as the bank takes a wider interest in South African projects, as a bank spokesperson tells GTR: “In terms of other projects in Sub-Saharan Africa, indeed we are looking at projects in the region, with South Africa being the primary focus.”