The African Development Bank (AfDB) said on Thursday it had loaned South African state owned utility Eskom 1.86 billion euros ($2.81 billion) to finance the construction of the Medupi power project.

The bank said the 4,800 megawatt Medupi power plant -- Eskom's first new base-load power plant in more than two decades -- would significantly boost the energy capacity of South Africa and the southern African region.

South Africa's energy problem has been a major impediment to Africa's leading economy. This operation should be seen in the context of the bank's ongoing efforts to help Africa bridge the infrastructure gap, AfDB president Donald Kaberuka said. Medupi is in South Africa's northern Limpopo Province, and is expected to be commissioned by February 2012.

(Reporting by James Macharia)