Bank of China contributes to $965 million syndicated ‘B’ loan for Eskom Power Generation and Transmission Project

Project narrative

On July 6, 2016, Eskom Holdings SOC Ltd (‘Eskom’) — a 100% South African state-owned power utility — signed a A-loan agreement (worth ZAR 5.3 billion) with the African Development Bank (AfDB) and a B-loan agreement (worth $965 million) with a syndicate of banks (including AFDB, Bank of China, Bank of Tokyo-Mitsubishi, CaixaBank, Citibank, HSBC, JP Morgan Chase, KfW IPEX Bank, Siemens Bank and Standard Chartered) for the Eskom Power Generation and Transmission Project. The A-loan, which is not backed by a sovereign guarantee, carried an 18-year maturity. The B-loan, which is backed by a sovereign guaranteed, carried a 5-year maturity (final maturity date: July 2021). Contributions to the B-loan included $10 million from AFDB, $150 million from Bank of China, $150 million from Bank of Tokyo-Mitsubishi (BTMU) , $100 million from CaixaBank, $100 million from HSBC, $50 million from Citibank, $115 million from P Morgan Chase, $100 million from KfW IPEX Bank, $50 million from Siemens Bank, and $150 million from Standard Chartered. As at March 31, 2018, the A-loan and B-loan were fully drawn (disbursed). The purpose of project was to support support the Eskom’s capital expenditure program (CEP), including the completion of the Ingula Hydropower Plant (1332 MW), Medupi Coal-Fired Power Plant (4764 MW) and Kusile Coal-Fired Power Plant (4800 MW). Upon completion, Eskom's CEP was expected to expand South Africa's electricity generation by 11,000 MW and increase its transmission network by 9,500 km. The AFDB has identified this project as having reached completion, although its precise implementation start and end dates are unknown.