South Africa’s public electricity company Eskom has borrowed R1.3bn (about €100mn) for the construction of a solar plant.

The 100MW concentrating solar power (CSP) plant will be located near Upington in the Northern Cape and will produce 525GW/hr of energy, supplying 200,000 homes with power.

The loan will be co-financed by a number of development financial institutions (DFIs). They are are the African Development Bank (AfDB – the arranger), Agence Française de Développement (AFD), the Clean Technology Fund (CTF), the European Investment Bank (EIB), KfW and the World Bank.

GTR can reveal that the loan has a tenor of 15 years, but pricing remains confidential. The involvement of jurisdictional DFIs (such as AFD of France) does not, however, mean that Eskom will be sourcing equipment and resources from these countries.

Instead, spokesperson Dikatso Mothae says that “the sourcing of equipment will be done on an international competitive bidding process, so equipment will not necessarily be sourced from France”.

The CSP project is one of many renewable energy initiatives being rolled out by Eskom, as South Africa attempts to both reduce its carbon emissions and eradicate power shortages.

It has also worked extensively with AFD in the past and hopes to do so again. “Apart from the general funding for the five-year capital expansion programme, Eskom will seek funding from DFIs (including AFD) for any new renewables, energy efficiency and transmission projects,” says Mothae.

In 2011, AFD lent Eskom another R1.4bn for the Sere wind farm project in the Western Cape. To date, Eskom has opened credit lines worth R2.7bn with the DFI.