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KfW IPEX-Bank finances highly energy-efficient Medupi coal fired power station in South Africa
Improving the country's power supply
Frankfurt am Main (ots) - As coordination bank, KfW IPEX-Bank, together with six other banks, is financing the boilers for the 4,800 MW Medupi coal-fired power station at Lephalale/South Africa. The boilers will be supplied by the German plant manufacturer HPE (Hitachi Power Europe, formerly Babcock Borsig) domiciled in the city of Duisburg and its local partner Hitachi Africa. Thus, the financing supports German exports as well as local industry. The power plant is urgently required in order to reduce the bottlenecks in South Africa's power supply, which hamper the country's economic development.
The total loan volume amounts to EUR 530 million. KfW IPEX-Bank contributes EUR 81.5 million to the financing; which is being covered by Euler Hermes, the German Export Credit Agency (ECA). The remainder is provided by six other banks. In this consortium KfW IPEX-Bank acts as documentation bank, ECA agent and facility agent. The financing agreement was signed on 13 May 2009.
The loan thus complements the financing of the HPE boilers and follows a EUR 250 million loan already extended by KfW IPEX-Bank in September 2008. That financing also was covered by a Euler Hermes guarantee and, in addition, was included in the CIRR (Commercial Interest Reference Rate) mechanism, under which the Federal Republic of Germany assumes the risk of interest rate fluctuations that may occur.
The borrower is state South African power utility Eskom (the provider of the vast bulk of the country's electricity supply), with which KfW IPEX-Bank has maintained a long-term business relationship. In 2008 Eskom consistently had electricity supply problems and was unable to meet the country's demand for electricity. In January 2008 Eskom announced emergency measures that curtailed power to the largest electricity users in the country. The electricity supply problems had both chronic and acute effects on the South African economy. Medupi is urgently required, also with a view to the approaching 2010 Football World Championship.
About KfW IPEX-Bank GmbH
Within KfW Bankengruppe KfW IPEX-Bank GmbH provides project and corporate financing as well as trade and export financing domestically and abroad. Worldwide it conducts all market activities of KfW Bankengruppe that are carried out on commercial terms. KfW IPEX-Bank GmbH has been operating as a legally independent subsidiary since 1 January 2008 and contributes significantly to the promotional mission of KfW Bankengruppe. It has approx. 490 employees (as of May 2009) and is represented in the key economic and financial centres throughout the globe.
KfW IPEX-Bank GmbH, Palmengartenstraße 5-9, 60325 Frankfurt
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