Eskom gets 1.86bn euro loan to build new power plant

South Africa was hit by major black-outs in 2008

Utility company Eskom has been loaned 1.86bn euros ($2,77bn; £1.69bn) by the African Development Bank to finance the building of the Medupi power plant.

The 4,800 megawatt facility in the Limpopo Province will significantly boost the energy capacity of South Africa, the bank said.

This will be the first new plant built by Eskom, a state owned company, in over two decades.

The plant is expected to be commissioned by February 2012.

Eskom has been rationing electricity this year as the national grid cannot cope with demand.

"South Africa's energy problem has been a major impediment to Africa's leading economy," African Development Bank president Donald Kaberuka said.

"This operation should be seen in the context of the bank's ongoing efforts to help Africa bridge the infrastructure gap."

In September, Eskom announced that South Africa's aim to provide universal access to the national electricity grid by 2012 may not be realised.