R20,9bn from bank for new Eskom plant

THE African Development Bank has loaned state owned utility Eskom ß1,86billion (R20,9billion) to finance the construction of the Medupi power project.

THE African Development Bank has loaned state owned utility Eskom ß1,86billion (R20,9billion) to finance the construction of the Medupi power project.

The bank said yesterday the 4800 megawatt Medupi power plant - Eskom's first new base-load power plant in more than two decades - would significantly boost the energy capacity of South Africa and the southern African region.

"South Africa's energy problem has been a major impediment to Africa's leading economy. This operation should be seen in the context of the bank's ongoing efforts to help Africa bridge the infrastructure gap," AfDB president Donald Kaberuka said.

Medupi is in northern Limpopo Province, and is expected to be commissioned by February 2012.

Eskom will submit a revised request for tariff increases for the next three years to the National Energy Regulator of SA (Nersa) on Monday after criticism of its initial plan to raise tariffs by 45percent over the next three years.

It is estimated that a 45percent tariff hike would add at least 50 basis points to the inflation rate.

The Reserve Bank expects inflation to remain within range until the end of next year as long as the Nersa grants Eskom tariff hikes no higher than the 25percent a year it has factored into its forecast. - Reuters

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