Eskom to expand SA transmission network with AfDB $218m loan
The African Development Bank
(www.AfDB.org) has approved a ZAR 2.886 billion (US$217.9 million) loan to
South Africa’s power utility Eskom Holdings Ltd towards the upgrade and
expansion of its transmission facilities.
The entity is crucial to power
supply within the sub-region.
The funding supports the Eskom
Transmission Improvement Project (ETIP) which will see the construction of
555km of 400kV transmission lines in KwaZulu-Natal and Mpumalanga and the
upgrading of substation equipment and improvement of various substation earth
mats in Mpumalanga.
The transmission lines will
provide additional power evacuation paths for new generation capacity, ensure
availability of power for future load growth, enable the reduction of network
losses and ensure safety of personnel and assets during network operations to
ensure compliance to the grid code.
The intervention will enable the
provision of additional power evacuation paths to the network from the Kusile,
Majuba, Drakensburg and Ingula power stations. It will also benefit the
utility’s corporate restructuring and governance program.
The ETIP aligns with the
Government of South Africa’s National Development Plan 2030 geared toward
financing infrastructure to support the country’s medium- and long-term
economic and social objectives.
ETIP was identified in the AfDB’s
South Africa Country Strategy Paper ((CSP) 2018–2022) and is consistent with
its pillars of promoting industrialization and deepening regional integration.
The project is also consistent with the Bank’s ten-year strategy 2013–2022.
The loan, which was approved by
the AfDB’s board on Tuesday 25 September, includes an additional co-financing
of US$25 million from the Africa Growing Together Fund (AGTF).
AfDB’s contribution, covered by a
South African Government guarantee, will finance up to 77 percent of the
critical project. Eskom will provide 15 percent. These investments will enhance
regional energy trade, end-user energy access for industrial development, and
address the potential addition of 130 million on-grid connections by 2025.
Eskom (www.Eskom.co.za) operates
South Africa’s national grid which comprises 157 transmission substations and
approximately 31,107km of transmission lines and 160 distribution substations,
totaling 139,610MVA of installed transformer capacity. The utility contributes
approximately 77 percent of the total installed power capacity in the Southern
Africa Power Pool (SAPP) and makes up approximately 80 percent of the regional
power demand.
Efficient power trade within the
SAPP is hampered by system losses and weakening of the transmission capacity.
Access to electricity in all SAPP member states (excluding South Africa), remains
below 45 percent and is as low as 10 percent in Malawi. Eskom trades within the
SAPP, selling electricity to, and buying from, member countries.
Eskom is central to the
realization of the AfDB’s New Deal on Energy for Africa strategy and the loan
supports its High 5 (https://bit.ly/2kiTUgj) priorities.
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