Picture: REUTERS
Picture: REUTERS

President Cyril Ramaphosa remained tight-lipped on Tuesday about the details of a R33bn loan agreement between state power utility Eskom and the China Development Bank.

At the weekend, DA leader Mmusi Maimane said he had written to Ramaphosa on August 24 requesting the full details of the loan agreement Eskom signed, and had given the president 14 days to respond.

The president had yet to do so. Maimane said he had therefore decided to submit a request to Eskom in terms of the Promotion of Access to Information Act for the terms and conditions of this loan to be made public.

The financially hamstrung Eskom and various struggling state-owned enterprises have been heavily reliant on government guarantees in recent years, which pose a risk to SA’s sovereign credit ratings.

'Not unusual'

"It is not unusual for SOEs to raise funding in the market for things like capital investment or operating costs," Ramaphosa said during a question and answer session in the National Council of Provinces on Tuesday. "They do so in accordance with standard commercial arrangements. Eskom recently entered into a loan agreement with the China Development Bank for $2.5bn — approximately R33bn — which will be used to fund the construction of Kusile Power Station," he said.

"This is the third tranche of a $5bn facility that was approved in 2015. The facility has a grace period of five years and thereafter the principal amount is repayable by Eskom in 20 instalments over a period of 10 years. There are no specific conditions for this loan."

Ramaphosa said Eskom had indicated it would not be able to make the loan agreement public since it contained information that may put the company "at a disadvantage when negotiating in the market".

"The China Development Bank facility is more competitive than the global market rate. The loan is government guaranteed under the existing Government Guarantee Framework Agreement. Among other things, this means that no Eskom assets have been used as security for the loan, and the China Development Bank is not entitled to any direct or indirect ownership of Eskom assets," said Ramaphosa.

Meanwhile, Ramaphosa said he was willing to appear before the state capture inquiry. At the weekend, the DA launched a petition calling for him to testify before the Zondo inquiry to explain why the ANC allowed state capture to flourish.

phakathib@businesslive.co.za

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