BRICS bank to pour $780m down Eskom’s black hole

The New Development Bank plans to lend as much as $780 million to Eskom Holdings SOC Ltd. for infrastructure projects this year as the ailing South African power utility battles to keep power supply steady.

Eskom, which on Wednesday entered a seventh day of controlled power cuts, is contending with operational and financial challenges, threatening the productivity of Africa’s most-industrialized economy. The government is considering various interventions to turn the company around, including a $4.8 billion bailout over three years and splitting the organization into three parts to help contain costs.

The NDB, back by the so-called BRICS nations of Brazil, Russia, India, China and South Africa, is in talks with the government about loans that could alleviate some of the pressure on the country’s electricity grid, the lender’s president, K.V. Kamath, said by phone.

The development institution is rolling out a $180 million loan to Eskom to build transmission lines and is considering two further projects in 2019, he said. The first is a $480 million loan that will pay for retrofitting flue-gas desulfurization equipment to make the Medupi power plant compliant with new environmental standards. The second is a further $300 million facility to improve the country’s battery-storage capacity, Kamath said.

—Bloomberg (extract, and BRICS bank press release)