Eskom has signed a Euro 100 million (R1.3 billion) loan agreement to fund a 100 megawatt solar power plant, the parastatal said on Wednesday.
The agreement with development finance institution Agence Française de Développement (AFD) was signed on Tuesday night, Eskom said.
It would fund the Concentrating Solar Power (CSP) plant near Upington in the Northern Cape.
“CSP… puts us on a path towards reducing our carbon footprint and investing in a sustainable energy future,” Eskom CEO Brian Dames said in a statement.
The CSP project was expected to produce 525 gigawatt hours of energy and supply power to 200,000 homes.
Eskom’s senior general manager for renewables Ayanda Nakedi said the funding would contribute to South Africa’s low carbon trajectory and commitment to climate change.
Promoting the localisation of the plant’s technology would also pave the way for industrial development and job creation, Nakedi said.
The AFD is financing the plant together with the African Development Bank, investment funding company Clean Technology Fund (CTF), European Investment Bank (EIB), German government-owned development bank KfW and the World Bank, Eskom said.
The AFD had so far loaned South Africa around Euro 200 million (about R2.7bn) towards two renewable energy projects.
In 2011, AFD and Eskom signed a Euro 100 million (R1.3bn) loan agreement to fund the Sere wind farm near Vredendal in the Western Cape.
AFD finances developments according to the French government’s overseas development assistance policies.