OREANDA-NEWS. April 13, 2015. On behalf of the Federal Ministry for Economic Cooperation and Development, KfW Development Bank has committed to granting an FC promotional loan to ESKOM, the state-owned South Africa, totalling just under ZAR 4 billion (EUR 300 million). The financing is to help connect solar and wind power plants in particular and also make a substantial contribution to modernising and strengthening the interconnected grid in South Africa. The network integration of renewable energy sources allows for annual CO2 savings of up to 5.5 million tonnes. One of the key projects supported is the grid connection of two power plants, the co-financing of which KfW had already approved. These are the Kiwano Solar Tower power plant (100 MW) in Upington (FC development loan: USD 100 million) and the Ingula Pumped Storage Scheme in Braamhoek, co-financed by KfW IPEX-Bank (EUR 75 million).

    "This realignment of the energy supply structure is a key milestone for South Africa in moving away from the dependence on coal-fired power plants towards sustainable power generation. By connecting climate-friendly energy production alternatives, the country – as the biggest CO2 emitter in Africa – is able to make a significant contribution to international climate protection," said Dr Norbert Kloppenburg, Member of the KfW Group Executive Board.

    A reliable and sustainable energy supply is of paramount importance to the people of South Africa. While the demand for environmentally friendly electricity is increasing in South Africa, the expansion and maintenance of the power grid have lagged behind in recent years. This results in power failures and fluctuations in supply. A new investment programme aims to not only expand the nationwide transmission and distribution network, but also to integrate renewable energy sources operated by private electricity providers. A total of USD 15 billion is to be invested in network expansion until 2022, including USD 3 billion alone on connecting renewable energy sources to the interconnected grid. The loan was provided to ESKOM in the South African currency (rand) and represents the largest local currency financing facility of KfW Group in a developing or emerging country so far.

    On behalf of the German Federal Government, KfW Development Bank has provided around EUR 850 million to South Africa for projects since 1994 (budget funds of around EUR 180 million, KfW funds of around EUR 670 million), especially in the focal areas of climate and energy, preventing violence and healthcare.

    Further information on KfW Development Bank is available at

    www.kfw-entwicklungsbank.de