Eskom’s World Bank loan – what are the stakes?

by EE Publishers staff reporter

There’s been a lot of media coverage of the pending World Bank loan of US$3,75-billion for Eskom. According to analysts, it is unlikely that the loan will not be granted. But who is the World Bank, how does it make its decisions, and what are the stakes?

The current funding shortfall for Eskom’s new build programme (Medupi, Kusile and Ingula) will only partially be met by the World Bank loan, and one must not lose sight of what funding is still to be secured, namely: the $3,75-billion (R27-billion) World Bank loan itself; the R8,5-billion additional borrowings required as per MYPD2; the cash shortfalls of R14-billion and R7,9-billion as per MYPD2; a price increase of some R17-billion for Medupi in coming years; and R20- to R40-billion private equity funding for Kusile. This gives a total current funding shortfall of R94- to R114-billion!… (more)