- President Cyril Ramaphosa has explained how Eskom and Transnet will repay Chinese loans
- The president was answering questions in the National Council of Provinces on Tuesday
- Ramaphosa said the loans did not have any specific conditions and had a grace period of five years after which Eskom had to repay the amount due in 20 instalments split over 10 years
President Cyril Ramaphosa attempted for the first time to explain how Eskom intended to repay $2.5 billion (R37.5 billion) loans which were secured through the China Development Bank (CDB) which is owned by the Chinese government.
Ramaphosa said the loan did not come with any specific conditions and was subject to a grace period of five years before the principal repayment amount will become due. Eskom will have to repay that amount in 20 instalments over a 10-year timeframe.
The president was answering questions in the National Council of Provinces on Tuesday and told MPs that the exact terms of the loan agreement was confidential. Ramaphosa said revealing the exact terms of the deal would harm Eskom’s ability to negotiate in the market.
Briefly.co.za gathered that Ramaphosa confirmed that the South African government had provided guarantees for the loan as was its right under the existing Government Guarantee Framework Agreement.
Thesouthafrican.com reported that Ramaphosa explained that the $2.5 billion (R37.5 billion) Eskom had received from China would be used to complete the Kusile Power plant. Ramaphosa said the loan formed the third phase of the plant which was approved in 2015.
Addressing concerns raised by certain quarters, including DA leader Mmusi Maimane, about the potential for a Chinese takeover of Eskom if the power utility failed to repay its debt the CDB, Ramaphosa said Eskom had a history of taking large loans from other world institutions and had always repaid those loans.
“We are very jealous of our assets and will not hand them over to any other country or any other entity. That, I can assure you.”
Transnet and its R4 billion loan was next on the agenda. Ramaphosa said Transnet had secured its loan through a separate Chinese institution, the Industrial and Commercial Bank of China.
The Transnet loan did have terms and conditions but Ramaphosa said those were standard for the type of loan which was issued.
Ramaphosa said the loan was mostly to aid Transnet with operational issues and would also fund certain capital expenditure projects.
The president said Transnet would be responsible for repayments which were subject to a five-year rand amount repayment amount which was fixed to a floating interest rate.
Fin24.com reported that Ramaphosa nearly lost his cool when the DA’s Jacques Julius asked him if the ANC planned to use the Eskom loan as a piggy bank to fund its campaign for the upcoming 2019 general election.
Ramaphosa initially refused to answer the question and said he found it rather insulting. Ramaphosa said the government was trying to build a better South Africa and the suggestion from the DA was that because the loan had come from China there had to be some kind of alternate self-interest on behalf of the ANC.
Ramaphosa accused the DA of being blindly prejudiced against China and suggested that if the loans were obtained through a more traditional Western source the opposition party would have no objections.
For more amazing, funny and informative videos, please visit Briefly South Africa's YouTube Channel.
Do you have a story to share with Briefly? Visit our Facebook page where you can send us a message or leave us a comment. Your story could be shared online.