South Africa’s Eskom Gets $57.67m AfDB Loan To Boost Electricity Generation From Renewable Sources

TO develop 200MW of battery storage with four hours of energy storage capacity per day, South Africa’s “energy clearinghouse,” Eskom Holdings SOC Limited, has secured up to $57.67 million loans from the African Development Bank (AfDB).
The Board of Directors of the AfDB approved the loan to the country’s public electricity utility and Africa’s largest energy body to increase electricity generation from reliable and efficient renewable energy sources.

AfDB says the concessional loan will come from the Clean Technology Fund, a multi-donor trust fund under the Climate Investment Funds. The pioneering Battery Energy Storage Systems Project is being co-financed with the World Bank and the New Development Bank.

The project involves the development of about 800MW at seven of South Africa’s sites in the Western Cape, Northern Cape, Eastern Cape and KwaZulu-Natal provinces.

Eskom will, once upstream, be able to dispatch electricity sourced from variable renewable energy that would otherwise have been wasted, reducing reliance on fossil fuel-generated electricity at peak times of the day.

AfDB’s Acting Director for Renewable Energy and Energy Efficiency, Dr. Daniel Schroth, said the approval of the Climate Technology Fund facility reflects the bank’s strong commitment to supporting South Africa’s energy transition plans and prioritizing investment in new low-carbon generation capacity and new technologies like battery storage.
“This comes at a critical moment as the world is gearing up for action at COP2,”  Schroth said.

The large utility-scale battery storage project, the first of its kind in Africa, is expected to contribute to a reduction in CO2 emissions of as much as  0.292 million tons. It will also inform the rollout of similar projects across the continent. Many African countries are implementing an energy transition as they strive to meet net-zero emissions targets.

The project also contributes to South Africa’s ambitious Nationally Determined Contribution, part of compliance with the Paris climate agreement.

The $5.4 billion Clean Technology Fund promotes low-carbon technologies with significant potential to reduce long-term greenhouse gas emissions. The African Development Bank has been an implementing entity of the Climate Investment Funds since 2010