Eskom has signed a R7bn loan deal with China Development Bank as part of the power utility’s current capital market expenditure programme. According to Eskom COF, Anoj Singh, the credit facility would boost funding Eskom had secured to 75% of the R69bn funding requirement for the 2016-17 financial year.
“The conclusion of this agreement continues to demonstrate investor confidence in Eskom and SA, notwithstanding recent volatility experienced in the local debt capital markets,” said Eskom CEO, Brian Molefe.
The loan came as Eskom was involved in a bitter spat with SA’s largest specialist fixed-income money manager, Futuregrowth, after it said it would not be lending to Eskom and five other state-owned enterprises. Futuregrowth cited concern about how parastatals were being run, along with government infighting and threats to the independence of the Treasury.
About two weeks ago, Molefe said while Eskom was likely to engage further with Futuregrowth, the utility wouldn’t “waste” a lot of time on it.
“Sometimes to engage with people that do not have an intention of being constructive is a waste of time,” Molefe said at the time. “I’m sure we will engage, but we will be cautious not to waste a lot of time.”
Eskom was still adequately funded, Molefe had said. “In fact, if Futuregrowth does not want us to sell bonds to them, we won’t do so.”
Singh reassured stakeholders earlier this year that Eskom was confident that it would fulfil its funding requirements for the year. At the time of the announcement, Eskom had secured 57% of its credit requirements for the current financial year.