African Development Bank lends $365m to South Africa’s Eskom for renewable energy projects
The African Development Bank (AfDB) and Eskom of South Africa have signed two loan agreements with a total value of $365 million that will enable the first large-scale implementation of renewable wind and solar energy generation in Eskom’s history.
The signing ceremony took place in Washington, DC on the sidelines of the 2011 World Bank/IMF Annual Meetings.
“The loans consist of $265 million from the AfDB’s own resources and $100 million from the resources of the Clean Technology Fund, a climate investment fund that promotes the transfer of low carbon technologies,” said AfDB on its website September 25, 2011.
According to AfDB, the loans are guaranteed by the South African Government, consistent with its procedures. South Africa’s Minister of Public Enterprises, Malusi Gigaba, and Minister of Finance, Pravin Gordhan, signed the guarantee agreements.
The loans, says AfDB, will further Eskom’s commitment to reduce its carbon footprint as the company hopes to begin construction of its planned Sere 100 megawatt wind project at Vredendal, in South Africa’s Western Cape, early 2012.
The investments underline Africa’s response to the challenge of climate change, the Bank noted.
“This shows that Africa can make a meaningful contribution to the global response to climate change, when given the financial incentives to do so,” said AfDB President Donald Kaberuka.
By Ekow Quandzie
This should be very positive news for Eskom. Indian has run similar renewable fund, and that has been highly successful. Anything Eskom can do to reduce their dependence on coal must be a step in the right direction