Johannesburg - President Jacob Zuma has become personally involved in Eskom's application to borrow $3.75bn (about R28.125bn) from the World Bank to fund various projects.
This loan could be approved early next year and would help finance, among other things, the construction of a solar-power installation at Upington and a railway line in Mpumalanga.
Zuma has written a letter to the World Bank supporting Eskom's application for the loan. Government has also given guarantees for it.
On Monday National Treasury head Thoraya Pandy told Sake24 that the President had written the letter to emphasise the importance of Eskom's construction programme for South Africa.
The loan would ensure that the two projects previously put on ice could be returned to life. The money would also be used to help finance one of Eskom's new coal-fired power stations, Medupi, near Lephalale in Limpopo.
Pandy said that all conditions precedent to the World Bank granting a loan had been met.
The loan application would be presented to the World Bank's board of directors early next year for final approval.
This is where Zuma's letter could carry particular weight.
Eskom said on Monday that the money could be made available as early as in the first half of next year.
A World Bank statement declares that the funds could prevent an energy crisis in southern Africa, and that the money is furthermore regarded as an instalment on a "greener future" for the region.
The bank would not hand the money directly to Eskom.
The practice is for the World Bank to allocate funds directly to specific projects. Negotiations to borrow money from the bank are protracted because every project has to be discussed with it, said Eskom.
Eskom has been negotiating with the bank for four years, having initially asked for only $5bn.
The company says the balance of this application ($1.25bn) may be granted in the future.
The three projects for which the bank may make the $3.75bn available, are:
R1.95bn for renewable energy projects (thermal solar power and wind power); and
R3.675bn for improvements to existing power stations to restrict carbon emissions and develop rail infrastructure to transport the coal to the power stations.
The World Bank is one of the foreign institutions that Eskom approached for funding. The utility also knocked on the doors of the Development Bank of Southern Africa and the European Investment Bank.
- Sake24.com
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