Nov. 23 (Bloomberg) -- The World Bank may agree to lend Eskom Holdings Ltd. as much as $3.75 billion by early next year to help reduce an 80 billion rand ($11 billion) funding shortfall, South Africa’s National Treasury said.

South Africa is in “advanced” talks with the World Bank for a loan of as much as $5 billion, Treasury spokeswoman Thoraya Pandy told Bloomberg News on Dec. 4. The Treasury and the World Bank last week declined to comment on the difference between the two numbers.

Eskom may have to delay building power plants if it can’t secure sufficient funding for its 385 billion-rand expansion program aimed at preventing a repeat of blackouts last year that shut most South African mines and smelters for five days.

The utility already has an 80 billion rand shortfall, which may shrink to 30 billion rand if it gets permission to triple electricity tariffs during the next three years, a plan which is opposed by the country’s ruling party, many of its biggest businesses as well as labor unions.

The World Bank is considering funding of $3.75 billion for Eskom, Sarwat Hussein, the lender’s spokesman for South Africa, said by phone on Nov. 19. He declined to comment further.

That sum is “correct,” South Africa’s Treasury said in an e-mailed statement on Nov 18. It anticipates that the proposal “will go to the World Bank board by early next year,” it said.

Of the total proposed loan, $3 billion will be used to help fund the $15.4 billion Medupi coal-fired power plant, which is being built in South Africa’s Limpopo province.

‘Avoid an Energy Crisis’

About $250 million would be used to fund wind and solar projects and $490 million will go towards improving coal transportation, according to the World Bank’s Web site.

“The Eskom project will help increase generation capacity and avoid an energy crisis across southern Africa,” according to the lender’s Web site. About 95 percent of South Africa’s electricity is supplied by Eskom, while across Africa it supplies about 45 percent of all power consumed, according to the utility’s 2009 annual report.

Eskom’s projected shortfall takes into account the funds Eskom has been able to borrow, will be able to borrow, and includes 175.9 billion-rand of government guarantees.

Power consumption in South Africa, the world’s biggest supplier of platinum and ferrochrome, may rise as large electricity users, including Xstrata Plc and Samancor Ltd., restart production that was suspended earlier in the year after demand for the metals slumped amid a global recession.

South Africa’s economy expanded an annualized 0.5 percent in the three months to Sept. 30, ending three consecutive quarters of contraction, according to the median estimate of 23 economists surveyed by Bloomberg. Statistics South Africa will release the official data at 11:30 a.m. in Pretoria tomorrow.

Eskom’s World Bank funding may eventually increase to $5 billion, Eskom spokesman Andrew Etzinger said by phone on Nov. 19.

To contact the reporters on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net

Last Updated: November 23, 2009 05:26 EST