Tim Cohen Editor: Business Day
New Development Bank bank president KV Kamath. Picture: REUTERS
New Development Bank bank president KV Kamath. Picture: REUTERS

The R2.4bn loan made by the New Development Bank (NDB), also known as the Brics bank, to Eskom was “in abeyance”, bank president KV Kamath said in an interview on Wednesday.

Kamath was speaking on the eve of the opening of an NDB office in SA, an event that will be held with much fanfare on Thursday and which will be presided on by President Jacob Zuma.

The fact that the only loan made to a South African institution so far is on ice is something of a sensitive subject for the organisation, particularly since there has been substantial demand — particularly from India and China — for the bank’s financing since its inception two years ago.

The loan was made to Eskom in April 2016 with a grand flourish, but this was based on the assumption that Eskom would use the funding for transmission lines to connect 500MW of renewable energy from independent power producers to the national grid. Eskom subsequently refused to sign up new offtake agreements with renewable energy projects in terms of the Renewable Energy Independent Power Producer Programme, arguing they were not cost-effective.

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