TUNIS (Reuters) - The Tunis-based African Development Bank (AfDB) said on Tuesday it lent South Africa $500 million to finance a power plant, the biggest loan offered so far by its private sector arm.

"...The investment program will add in excess of 8,000 MW to the grid before 2012... The project includes the construction of 1,500 km of 765 kv lines in order to strengthen supply to the Western Cape," the bank said in a statement.

South Africa's power reserve margin -- a measure of spare capacity -- recently fell to between 8 percent and 10 percent from 25 percent in 2001, the bank added.