South Africa‘s public enterprises ministry on Thursday said that a China Development Bank (CDB) loan to struggling state power company Eskom was not in jeopardy.
Eskom had expected to draw down R7 billion ($481 million) from a $2.5 billion CDB loan facility by late March, but South Africa‘s finance ministry said in a report to parliament last month that the drawdown had been delayed.
The delay meant South Africa had to bring forward a planned bailout for Eskom, which supplies more than 90% of the electricity in Africa‘s most industrialised economy but has been grappling with a severe financial crisis.
The South African government and Eskom are working to ensure the transfer of funds from CDB to Eskom, the public enterprises ministry said in a statement.
“It must be emphasised, for the sake of clarity, that this, or any other loan, is in no way connected to the issue of equity in any of our state-owned enterprises,” the statement said.
The Chinese loan to Eskom was agreed in July last year, during a visit to South Africa by Chinese President Xi Jinping.
Eskom is battling with liquidity problems. The government has promised the utility a bailout of R23 billion a year over the next three years, but energy experts say it will need more support.