Public Enterprises Minister Malusi Gigaba said the loan was an indication that there was "great investor confidence in SouthAfrica". The 40-year loan, signed in Pretoria, will help finance the building of a 100 megawatt solar power plant near Upington and the 100 megawatt Sere wind farm near Vredendal in theWestern Cape.

The 200 megawatt capacity of the two power plants could generate enough electricity to power 200,000 homes. Eskom Chief Executive Brian Dames said the wind farm would be completed by 2013 and the solar farm a year later in 2014.

Repayments on the loan will start in 10 years. It is expected to be paid off over the following 30 years at an interest rate of 0.25 (CORR) percent annually on the amounts dispersed. The loan was approved by the World Bank on October 27 and comes from its clean technology fund.

Eskom has already received US100 million (more than R700 million) from the African Development Bank for the two projects, which will be the largest in South Africa. The loans are being guaranteed by the South African government. It is hoped that each project will reduce South Africa's carbon emissions by five million tons a year.