AFD grants South Africa US$477m to advance national power grid

29 March 2017

The French Development Agency (AFD) has provided South Africa’s power utility Eskom with US $477.7 million credit facility.

Eskom, which has postponed the development of numerous large-scale PV projects over the past years owing to grid issues, will use the funds to advance its network and incorporate more renewable energy.

The facility is intended to support Eskom’s plans to advance and enlarge its power grids. The money will be used to fortify transmission lines and substations connected to large-scale renewable energy power plants, AFD said.

The money will be provided over a three-year period, and will be dedicated to projects which are part of Eskom’s grid improvement plan, projects for the integration of renewable energy and projects for the development of transnational grids.

The development of large-scale solar and renewable energy projects under the nation’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has been dogged by Eskom’s grid and fiscal problems.

In February 2017, the South African government said that it plans to carry on the REIPPPP program. In its 2017 Budget Review, the nation’s Ministry of Finance affirmed that Eskom “will sign outstanding power purchase agreements for renewable energy in accordance with procured rounds”.

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