Eskom's Brics bank loan can still be used – Gigaba

The bank offered the loan to the power utility to fund transmission lines to connect 500 megawatts of renewable energy from independent power producers to the national grid.

FILE: Minister of Finance Malusi Gigaba. Picture: Thomas Holder/EWN

JOHANNESBURG – Finance Minister Malusi Gigaba says the R2.4 billion loan that the Brics bank issued to Eskom and which has been frozen, can still be used in the future.

The bank offered the loan to the power utility to fund transmission lines to connect 500 megawatts of renewable energy from independent power producers to the national grid.

Gigaba was speaking after the launch of the bank’s African regional centre in Sandton on Thursday.

“That earmarked funding can and could not be used for anything other than that, and so there’s nothing out of the ordinary. It’s a fact that this was earmarked for green energy.”

Gigaba says that the opening of the first regional centre of the Brics bank is important for South Africa as it will assist with additional funding for large infrastructure projects.

The founding members of the bank - Brazil, Russia, India, China and South Africa - have brought in a total of $1 billion of initial contributions.

In 2015, President Jacob Zuma signed into law the New Development Bank Special Appropriation Bill, which allowed South Africa to contribute R2 billion from Treasury for the country’s first investment in the bank.

Gigaba says that the country will benefit from the existence of the bank’s regional centre in the country.

“It means that after the opening, we’re ready to start operating. And in the near future, the New Development Bank as it accepts new members, it will, therefore, be in a position to provide loans for infrastructure funding to other African countries that will join as members.”