Eskom will "ring-fence" the work being carried out by Hitachi Africa at the Medupi project site to ensure that none of the proceeds of the recently approved $3,75-billion World Bank loan are directed towards the company in which South Africa's governing party has a stake, acting executive chairperson Mpho Makwana has confirmed with Engineering News Online.

Speaking in an interview on Friday, following news that Eskom had been granted the loan package, $3,05-billion of which would be directed to the Medupi coal-fired project, Makwana said that the State-owned utility would interrogate ways of ensuring that it "complied" with the World Bank's "procurement policies".

Bank spokesperson Sarwat Hussain confirmed with Engineering News Online earlier that the bank's largest-ever loan would not be used to finance "the Hitachi component" - Hitachi Africa was awarded a R38-billion boiler contract in 2007.

Hussain indicated that, because the boiler contracts predated the loan, Eskom would use other funding, while the bank's proceeds would flow to other projects at the 4 800-MW Medupi, which is being built in Limpopo province.

The boiler contract is particularly sensitive, because the African National Congress' Chancellor House owns a 25% shareholding in Hitachi Africa, which was awarded what is the largest-ever Eskom contract after Alstom walked away from the deal, following scope changes.

Makwana described the World Bank's decision to cofinance the Medupi power plant, as well as Eskom's proposed concentrated solar and wind energy projects as "a vote of confidence in South Africa and Eskom".

He indicated that it meant that "about 90%" of the funding for the Medupi project had been secured, despite the fact that the group's three-year funding gap remained about R45-billion.

The approval cleared the way for the full construction of the power station, the completion of which was "a matter of urgent national interest".

"Construction is progressing well and the first unit of Medupi is expected to come on line in 2012," Makwana concluded.