denotes premium content | Jan 10 2009 
News
posted 1 Dec 2008
People & places
Eskom secures $500m from AfDB
Eskom, the under-fire South African electricity monopoly, has secured a $500m 20-year loan from the African Development Bank (AfDB), the biggest ever private-sector loan granted by the Bank.
The loan will help the company to upgrade its generating capacity after years of neglect, but will only cover a fraction of its investment needs. Over the next five years alone, it plans to invest 343bn rand ($30bn), of which it aims to raise 30bn rand before its fiscal year end in March 2009.
Following a downgrade by Moody’s, Eskom also raised 60bn rand from the South African government in a bid to undo the negative effect of the downgrade on its borrowings.
Eskom needs to invest heavily in electricity generation and the South African electricity grid after more than a decade of under-investment nearly led to the collapse of the network in January 2008. Energy intensive industries, such as mining and steel making, have been forced to limit their energy use as a result, with knock-on effects for the South African economy.
The rest of the country have been hit by rolling blackouts as the company tries to ration electricity usage.
