Eskom has welcomed the National Treasury's decision to bring forward the disbursement of the R60-billion deeply subordinated loan from government.

"Eskom welcomes the reduction of the disbursement period from the initial five years to three years, including the willingness to consider providing guarantees," said Eskom Finance Director Bongani Nqwababa in a statement issued over the weekend.

"This decision of government gives recognition of the importance of maintaining Eskom’s strong investment grade credit rating and is a clear indication of the shareholder’s unwavering support in that regard," he added.

Government would now disburse the R60-billion loan in three instalments of R10-billion, R30-billion and R20-billion in 2008/9, 2009/10 and 2010/11 respectively.

"This is an important step towards securing the long term financial sustainability of Eskom and will enhance the organisation's ability to deliver the large capital expansion programme."

Ensuring security of supply went hand in hand with financial sustainability.

"As a result... it is important for the role of regulatory increases and shareholder support to be complementary and predictable in order to reassure funders and suppliers of the long term attractiveness of Eskom as a business partner," Nqwababa said.

Eskom is embarking on a R343-billion capital expansion programme over the next five years to March 2013.

Generation projects would take up 73 percent of the budget, with transmission investment accounting for another 13 percent.

The remainder of the budget will fund improvements on the distribution network.

According to the power utility, about R46-billion of the total capital expenditure will be invested in the 2008/9 financial year.

Sapa