Cape Town – The political risk insurance and credit enhancement arm of the World Bank Group said on Wednesday that it was providing guarantees of almost 700 million euros (R11.9 billion) for loans by international commercial banks to shore up Eskom’s power transmission infrastructure in South Africa.

A statement from the bank’s Multilateral Investment Guarantee Agency (Miga) said the financing would help reduce load-shedding and pave the way for the integration of renewable energy into the country’s grid. Miga said the guarantees of of 698.9 million euros provide coverage for Deutsche Bank and Mizuho Bank against the risk of non-honouring of sovereign financial obligations for up to 15 years.

Eskom CEO Brian Molefe said: “Miga’s credit enhancement has allowed us to secure euro-denominated funding for longer tenors and on more favourable terms.