Luxembourg, 31/07/2007 (Agence Europe) - The European Investment Bank (EIB) has just signed an €88 million (830 million rand) loan agreement with Eskom, South Africa's state-owned electricity utility, to part-finance the construction of a new high voltage transmission interconnection between Johannesburg and Cape Town. The loan is the second tranche of a €300 million (2.8 billion rand) facility for the project; a first tranche of €80 million was signed in December 2006. Both loans were signed for a term of 25 years. The main objective of the 765 kV transmission backbone link is to secure the electricity supply of the Western Cape region, to meet growing electricity demand and reduce transmission losses. The project will also help reduce transmission constraints in the Southern African Power Pool. The two finance contracts between the EIB and Eskom were concluded within the framework of the EU-RSA co-operation agreement whereby the EIB provides long-term finance for public and private investment supporting economic development in South Africa. (ol)