Zuma backs World Bank loan for Eskom

JOHANNESBURG – South African President Jacob Zuma has written a letter to the World Bank supporting an application by power utility Eskom for a US$3,75 billion loan, Sake24 reported yesterday.

Eskom expects the World Bank to make a decision on a loan programme of up to US$5 billion in the first half of next year, a senior company official said on Monday.Eskom has been rationing electricity since early 2008 when the national grid nearly collapsed, forcing mines and smelters to shut and costing South Africa billions of dollars.Earlier this month the World Bank said on its website Eskom had applied for the initial three tranches of the loan, amounting to US$3,75 billion, to fund projects at its Medupi power station, and renewable energy and low-carbon energy efficiency programmes.The utility has embarked on a 385 billion rand, US$51,4 billion, power supply expansion programme, to enable it to meet fast-rising demand in Africa’s biggest economy.The government says it is looking at ways to help the utility bridge its funding gap without resorting to annual tariff increases of 45 per cent over the next three years which Eskom applied for in September. – Nampa-Reuters