Eskom clinches $805m US loan for Kusile

31 May 2011

South Africa state electricity company Eskom has secured a $805-million (about R5.57-billion) direct loan from the Export-Import Bank of the United States to finance construction of the Kusile coal-fired power plant near Emalahleni in Mpumalanga province.

The financing will support Eskom’s purchase of engineering and construction management services from Black & Veatch International of Overland Park, Kansas.

“Ex-Im understands the opportunities that exist in Africa and is enlarging its footprint there,” South Africa’s ambassador to the United States, Ebrahim Rasool, said in a statement this week. “Moreover, entities like Eskom understand that they need to put forward proposals which are defensible both financially and environmentally, and that is where this transaction was born.

“We thank Ex-Im for approving the Eskom financing, as well as the bank’s vision and commitment to South Africa.”

Advanced technology

South Africa is one of nine countries identified by Ex-Im Bank as offering the greatest export sales opportunities to US companies. In winning this contract with the Bank’s support, Black & Veatch overcame competition from several major European engineering companies.

Hundreds of highly skilled American senior engineers and support personnel in Ann Arbor, Michigan; Raleigh, North Carolina; and Kansas City, Missouri will be employed by Black & Veatch each year during a five-year period.

The Kusile plant will consist of six 800 MW units, for a total capacity of 4 800 MW, and is designed with advanced technology and equipment, including highly efficient supercritical boilers.

Reducing harmful emissions

Eskom undertook a comprehensive environmental assessment for the project, and a number of environmental safeguards, including were included in the plant’s design. Notably, Kusile will be the first coal-fired power plant in South Africa to include scrubbers to control sulphur dioxide and filtering equipment to minimise particulate emissions.

To help conserve water, the plant will use an air cooling system.

The plant also is designed to be carbon capture and sequestration ready, which means it is configured in a way that will cater for the future installation of equipment to capture and transport carbon emissions to a permanent storage location.

The application to finance the Kusile project underwent a review that focused on aspects related to its carbon dioxide production, and South Africa’s long-range goals to reduce its carbon dioxide production.

Eskom has announced its goal to significantly reduce its long-term dependence on coal by 2025.

Rebuilding critical infrastructure

Kulile is the second of two plants – the other being Medupi in the Limpopo province – being constructed by Eskom in order to meet South Africa’s increasing demand for electric power.

“Ex-Im Bank financing of US export sales to sub-Saharan Africa represents our commitment to the region,” said Ex-Im Bank chairman Fred Hochberg. “The world is rebuilding its critical infrastructure, and these types of opportunities are available to US companies in developing areas of the world.

“We are ready to finance American exporters to win those sales and keep Americans working.”

The approval brings Ex-Im Bank’s current fiscal year financing in sub-Saharan Africa to nearly $1.5-billion, nearly double the previous one year record of $812-million set during the fiscal year ending 30 September.

SAinfo reporter

Would you like to use this article in your publication or on your website? See: Using SAinfo material