African Development Bank (AfDB) has extended $1.34 billion
loan facilities to South Africa’s Eskom to support
the utility's capital expenditure programme. It is
to date the largest syndicated A/B Loan arranged in
The loan featured a state guarantee from South Africa.
According to Annemarie Mecca, chief legal counsel at AfDB who
worked on the deal, the sovereign guarantee incorporates the
typical provisions seen in a guarantee. But it is also atypical
from the perspective of commercial banks, in that it is
governed by public international law while the loan agreement
itself is governed by English law.
AfDB and Eskom have previously worked together on four
separate occasions, including three public sector loans to
Eskom totalling over $1.35 billion.
According to a press release from the AfDB, the expenditure
programme includes investments in new generation, plant
refurbishment, transmission lines, and...