Eskom and KfW sign ZAR1.35 billion loan agreement for renewable energy grid integration


Eskom and KfW, the German Development Bank on behalf of the German Government, have on 29 June 2018, signed a $100 million (approximately ZAR1.35 billion) loan facility to support further investments in the transmission network in the Northern Cape in order to facilitate the grid integration of renewable energy independent power producer (IPP) projects under the recently-signed power purchase agreements (PPAs).

Eskom’s and KfW’s cooperation has been agreed upon by the two governments.

This funding will also allow for the continuation of the second phase of capacity and reliability improvements in the areas of Harrismith in the Free State and the Greater East London region in the Eastern Cape; these projects will largely enhance network reliability and load-growth. 

The signing of this loan facility is a positive contribution towards the successful execution of Eskom’s ZAR72 billion funding requirement for FY2018/19, the loan forms part of the first new funding that Eskom intends signing with Developing Finance Institutions (DFIs) in this financial year. 

“The successful conclusion of this agreement between Eskom and KfW validates the bank’s continued commitment towards Eskom and it is an indication of the strong partnership and coorporation between Eskom and KfW.  The facility demonstrates the improved market sentiment and confidence in the ability of the Eskom’s leadership to direct the company on the correct path to recovery and sustainability. Furthermore, integrating more renewable sources of energy into the grid will go a long way in helping to reduce South Africa’s CO2 emissions, driving Eskom towards it’s targeted goals,” said Phakamani Hadebe, Eskom Group Chief Executive Officer.

With the introduction of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPP), KfW extended a further loan of ZAR3.9 billion to Eskom in March 2015, to facilitate renewable energy grid integration as well as overall grid strengthening through improvements to the capacity and reliability of the transmission network.


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