Troubled power utility Eskom has signed a loan agreement with New Development Bank (NDB) to connect renewable energy projects to the national grid.
Under the agreement, the NDB will provide a sovereign guaranteed load to Eskom amounting to $180 million.
The loan agreement was signed by Xian Zhu, NDB vice president and chief operations officer, and Calib Cassim, chief financial officer (CFO) of Eskom during the 4th Annual Meeting of the New Development Bank in Cape Town, South Africa.
The New Development Bank’s Project Finance Facility (PFF) will be used to support the development of grid connection infrastructure, which is vital for the development of renewable energy projects. The PFF will also support renewable energy development and reduce the country’s reliance on fossil fuels.
The project will integrate a total of 670 MW of renewable energy into the Eskom’s grid. Modern grid connection infrastructure will be used for renewable energy projects and augmentation of the Eskom transmission network to the identified areas.
The project will also help increase electricity supply to the targeted areas for sustainable development, Eskom said.
“The project will enhance the country’s capacity for renewable energy while achieving sustainable growth. It also aligns with the Bank’s focus to support projects that aim at developing renewable energy sources,” it said.