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ABB agrees to repay S.Africa over power plant contract

The South African subsidiary of Swedish-Swiss engineering giant ABB will return funds it received five years ago for the construction of a power plant near Johannesburg, the country’s state utility Eskom said Friday.

Eskom said in a statement that following “lengthy investigation and negotiations,” a deal had been reached with ABB South Africa for the repayment of 1.56 billion rand ($103 million) related to a contract “unlawfully awarded… for work at the Kusile power station”.

The plant, east of Johannesburg, was one of two coal-fired plants commissioned by Eskom in 2007, but which has been fraught with allegations of massive corruption.

Last year, president Cyril Ramaphosa said that problems with the construction of plants in Medupi and Kusile accounted for much of a financial crisis at Eskom.

The government welcomed the recovery of funds from ABB as “a crucial milestone in the fight against corruption”.

Despite construction of new power plants, South Africa experiences intermittent power outages, known locally known as “load-shedding”.