Cwayita Kweyi | Analyst | Tamela Holdings | mail me |
On 4 April 2025, the South Africa Transmission Infrastructure Investment Forum brought together key decision-makers. These included the Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, as well as industry leaders, financiers and developers.
The forum laid the groundwork for Public-Private Partnerships (PPPs) in energy transmission. This shift is driven in part by the minister’s bold and pragmatic outlook. It signals a turning point in rewiring SA’s future.
An urgent case for private capital
Bid Windows 6 and 7 left nearly 6 GW of projects stranded due to a lack of grid access. As a result, the transmission bottleneck has become the Achilles’ heel of South Africa’s energy transition.
The Transmission Development Plan outlines a pressing need: 14,500 km of new transmission lines by 2034. To meet this target, annual delivery must increase to an average of 1,450 km, up from the current 300 km per year.
In response to Eskom’s constrained balance sheet and limited implementation capacity, the Department of Electricity and Energy (DoEE) has turned to private capital.
A new model has emerged: Independent Transmission Projects (ITPs). This model borrows from the Renewable Energy Independent Power Producer Procurement Programme, which has already unlocked over R300 billion in private investment. This step is another critical milestone in rewiring SA’s future.
A new chapter in SA’s infrastructure investment
The ITP model introduces a fresh approach. Its first phase enables 1,164 km of privately financed and operated transmission lines. These lines will unlock over 3,200 MW across the Northern Cape, the North West and Gauteng.
Most of these projects are at a late stage. They already hold environmental and land permits, which makes them bid-ready and well-suited for near-term capital deployment.
The DoEE will lead the tender process. The National Transmission Company of South Africa will serve as the sole buyer. Together, these actors are forming a reliable ecosystem to advance transmission development and rewire SA’s future.
Enter the CGV
To make these projects more bankable, the National Treasury is introducing the Credit Guarantee Vehicle (CGV). This innovation is a game-changer for PPPs in infrastructure. The CGV will cover payment and termination risks. This mechanism addresses long-standing investor concerns about Eskom’s off-take reliability.
The CGV is targeting approximately US$500 million in initial capital. Blended finance from global development finance institutions (DFIs) will back it. Key players include the World Bank, the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and partners from the Just Energy Transition Partnership (JETP).
The CGV aims for an AAA credit rating and will follow an independent governance model. These features will reduce the cost of capital, attract blended finance and build investor trust. This is particularly important for long-term Build-Own-Operate-Transfer style concessions.
Why the private sector should pay attention
This is not just another policy draft or theoretical blueprint. On 3 April 2025, the draft Electricity Transmission Regulations were released. These regulations provide a legal framework for transparent procurement, enforceable Transmission Service Agreements, and guaranteed cost recovery.
Developers now have commercial clarity. Investors benefit from reduced regulatory uncertainty. Energy contractors and manufacturers can look ahead to a significant pipeline. The forecasted local spend stands at R390 billion over the next decade.
The roadmap is in place. Risk tools are available. The private sector is officially invited to power South Africa’s energy future and actively contribute to rewiring SA’s future.
