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The Commission of Inquiry into State Capture on Friday heard how former Eskom financial officer Anoj Singh drove the process for a R25bn loan facility from China’s Huarong Energy Africa.
Eskom head of treasury, Andre Pillay, said the company had approached the power utility with the unsolicited offer in 2015.
An Eskom delegation had travelled to China with an intention to further explore the offer. The terms of the loan would include a $30m cancellation fee and a R400m "signature fee", according to earlier reports.
It was previously reported that the terms of the controversial loan, which Eskom was to use to refurbish power stations, also allowed Huarong to select and approve contractors. No agreement was reached from the first China visit.
Pillay told the inquiry that what followed was a second term sheet from Huarong, which was more binding.
The term sheet was signed in March 2017 by Singh and the chairperson of Huarong, despite concerns that proper procurement processes were not followed, which included obtaining a legal opinion on the matter.
He said in his view, Singh was determined to sign regardless of the concerns raised. It was not the norm to sign a term sheet that was binding, he added, as it meant that the company was tying itself to the stipulated terms.
Pillay said his feeling was that the facility would "not immediately alleviate the liquidity problems" facing Eskom, and that a short-term liquidity solution was needed.
