South Africa to receive US $218m for expansion of transmission network

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South Africa’s power utility Eskom Holdings, is set to expand its transmission network after the African Development Bank (AfDB) approved a US $218m loan to help fund the upgrade and expansion of its transmission facilities.

The funding will consist of construction of of 555 km of 400 kV transmission lines in KwaZulu-Natal and Mpumalanga, as well as the upgrading of substation equipment in Mpumalanga. This part of the Eskom Transmission Improvement Project (ETIP).

Also Read:Rwanda inaugurates a US $20m power substation

Power evacuation paths

Additionally, the upgrades will provide additional power evacuation paths for new generation capacity, ensure availability of power for future load growth, and enable the reduction of network losses.

The investments will also enhance regional energy trade, end-user energy access for industrial development, and address the potential addition of 130 million on-grid connections by 2025.

The bank loan guaranteed by South African Government, includes an additional co-financing of US $25m from the Africa Growing Together Fund (AGTF). It is expected to finance up to 77% of the critical project while Eskom funds 15%.

The AfDB’s intervention will empower the provision of additional power evacuation paths to the network from the Kusile, and Majuba power stations and its Drakensberg and Ingula pumped storage scheme. It will also benefit Eskom’s corporate restructuring and governance program.

About Eskom Transmission Improvement Project (ETIP)

The ETIP supports the South Africa’s Government, National Development Plan 2030, which aims at financing infrastructure to support the country’s medium- and long-term economic and social objectives.

ETIP was identified in the Bank’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 Eskom utility