Eskom signs R19.6 billion loan with Chinese bank

Eskom has signed a R19.6 billion ($1.5 billion) loan agreement with China Development Bank to finance the Medupi coal power plant.

The Chinese loan will be paid back over 15 years and will add to Eskom's current R300 billion debt.

Energy expert Chris Yelland says the power utility has had to revise the schedule for the Medupi power station, which will only be on stream in 2021.

It will be about seven years late but it is coming along step by step.

Chris Yelland, energy expert and MD at EE Publishers

Yelland says governance problems and resulting cash-flow issues need to be addressed at Eskom in order to avoid the need to borrow money.

The China Development Bank is the world's biggest lender.

Eskom is expected to release its financial results next week.

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