Eskom confident of funding

Johannesburg - Despite the global credit crunch, Eskom is not concerned about funding just yet.

The company's financial director Bongani Nqwababa says that despite the difficult credit markets Eskom has continued support from financial institutions.

Furthermore, the German KfW Ipex-Bank, which extended a R2.8bn loan to Eskom earlier this year, indicated on Tuesday that its relationship with Eskom had not changed despite the credit crisis paralysing financial institutions.

"We are carefully watching all markets, especially in the exceptional times the global economy is experiencing. Lending facilities are still available to Eskom and, no matter what happens in global markets, KfW Ipex-Bank will be a dependable partner to Eskom."

These are the words of the bank's spokesperson, Dela Strumpf.

Early in September Eskom announced that it had been granted the R2.8bn loan. This represents about 1.8% of the total amount that Eskom wanted to borrow offshore. The power utility originally hoped to get 60% of its funding requirements for the next five years offshore.

Nqwababa admitted to Sake24 that this percentage would probably be reduced because of global market volatility.

Eskom will now need to acquire a greater proportion of the money locally. Nqwababa pointed out that Eskom would however still look for money offshore.

"The World Bank, the African Development Bank and the European Investment Bank are all examples of financial institutions from which Eskom still plan to borrow."

Further details of the amounts that Eskom can expect from these institutions have not yet become available.

These banks are unlikely to hand the money directly over to Eskom but could rather allocate funds to specific projects.

According to Eskom spokesperson Fani Zulu, this could mean that funding arrangement discussions become delayed because there are so many projects to be discussed with the banks.

- Sake24