South Africa's Eskom Agrees $2.5 Billion China Development Bank Loan

(Bloomberg) -- South Africa’s embattled power utility, Eskom Holdings SOC Ltd., agreed a $2.5 billion loan with the China Development Bank as part of a continuing effort by the state-owned company to strengthen its balance sheet.

The agreement is a normal commercial loan guaranteed by the government, Eskom Chief Executive Officer Phakamani Hadebe said in an interview in Pretoria. The latest agreement means the utility has now secured about two-thirds of its expected funding requirements for the year, he said.

Eskom, which depends on government guarantees to service debt of about 368 billion rand ($27.6 billion), is seeking to cut costs and increase efficiency to improve its finances.

To contact the reporter on this story: Amogelang Mbatha in Johannesburg at ambatha@bloomberg.net

To contact the editor responsible for this story: Alastair Reed at areed12@bloomberg.net

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