Eskom Holdings has signed a €530-million (approximately R6.1-billion) loan agreement with seven European banks, the parastal said in a statement on Thursday.

"This loan will be used to fund part of the foreign content of the Medupi boiler contract with Hitachi Power Europe, and forms part of the Eskom ongoing funding activities for its investment in infrastructure," Eskom said.

The loan agreement was signed between Eskom as borrower and as mandated lead arrangers HypoVereinsbank (Member of UniCredit Group), BNPParibas, CALYON Credit Agricole CIB, Commerzbank, KfW IPEX-Bank, Natixis and as Lead Arranger BHF-BANK.

The multi-lender loan is payable over 12 years after the commissioning of the units at Medupi power station.

"This is a "sister" agreement to the KfW IPEX-Bank Fixed Rate ECAloan agreement signed by Eskom in September 2008."

The combined financing amount is €780-million (approximately R9-billion) covered by Germany's official Export Credit Agency.

"Given the current status of the international financial markets, the financing opportunities available to the company and the competitive financing terms of this loan, Eskom views the ECA type of financing as a critical component of the overall financing plan." said Jacob Maroga, Eskom's chief executive.

Securing power supply for present and future needs of the country remained Eskom's fundamental responsibility.

"Our debt capital raising activities are an integral part of financing Eskom's capital expansion programme and will complement other sources of funding such as the recent government support," Maroga said.

Sapa

Absa provides 110% Absa announced on Monday that mortgages of 110 percent are now available...

Find your dream home In the market for a new home? Browse our massive database for the perfect property...

Property slump is over! House prices increased by 6.9 percent year-on-year in August...