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Eskom, Transnet to also get cash injections from China

Eskom to receive a $2.5 billion loan from the China Development Bank.

China would invest $14.7 billion in South Africa President Cyril Ramaphosa said on Tuesday after talks between the two countries, news that sent the rand 1% firmer.

Speaking at the same event, Chinese President Xi Jinping said the world’s second-biggest economy would take active measures to expand imports from South Africa to support development in Africa‘s most industrialised economy.

Read: Rand firms after Ramaphosa announces $14.7 billion China investment 

Ramaphosa, who has promised to revive the economy since becoming president in February and after winning the leadership of the ruling African National Congress last year, said “Xi has indicated that China is ready to invest and work with South Africa in various sectors.”

The rand firmed after Ramaphosa’s announcement, spurred by offshore demand for the currency, traders said.

South Africa‘s struggling state-run power firm Eskom, which swung to a full year loss on Monday, received a $2.5 billion loan from the China Development Bank.

Ramaphosa has focused on revitalising Eskom, Africa‘s largest public utility, which was embroiled in corruption scandals under former president Jacob Zuma and narrowly avoided a liquidity crunch early this year after banks halted lending. Zuma has denied wrongdoing.

Read: Loss-making Eskom’s going concern status questioned

South Africa‘s logistics utility Transnet also received a cash injection, as well as other sectors of the economy, officials said.

Read: China’s ICBC gives Transnet R4bn loan during Xi visit

Xi said China and South Africa were important emerging economies with similar perspectives on many global issues.

“Hence the need to strengthen cooperation,” Xi said. 

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I wonder what the payoff is? I would rather have China take them over than to give handouts

Theres definitely a price.
More than likely a privazation stake that isnt privatization. So future profits get diverted to china.

I dont particularly trust the chinese as business partners and no deal from anyone where the price we pay is left out of the press announcement

The devil is in the details which have not been disclosed. Cyril did not discuss the T&C’s.

Chinese companies (SOE or other) have now most likely sealed all future deals or procurement regarding to Eskom and Transnet. They’ll find get their money back.

Good deal by president Xi, as for Cyril.. perhaps you had no choice since South African’s were not willing to fund this.

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