A state-backed credit support mechanism to unlock private investment in South Africa’s transmission infrastructure could be operational by March 2026, enabling the first independent transmission projects (ITPs) to reach financial close in the 2026/27 fiscal year.
The announcement was made during the launch of the request for qualifications (RFQ) for the ITP programme at the Johannesburg Stock Exchange yesterday (July 31). The RFQ invites private-sector participation in a transmission build valued at over R390 billion. Submissions are due by September 9 this year, confirmed Minister of Electricity and Energy Kgosientsho Ramokgopa.
The facility, developed by National Treasury in partnership with the Department of Electricity and Energy, is designed to de-risk early-stage private capital by blending concessional, philanthropic and development finance institution funding.
It will provide credit enhancement to special purpose vehicles (SPVs) building transmission assets under the ITP, using a layered capital structure that includes senior and junior tranches as well as callable capital. This aims to reduce the weighted average cost of capital for bidders and, ultimately, lower tariffs.
“We want to mobilise capital in a fiscally efficient way. The guarantee will provide pricing clarity for bidders and increase the bankability of projects without adding to national debt,” said Deputy Finance Minister David Masondo.
Facility pricing will be disclosed at the request for proposals stage, allowing developers to integrate it into their tariff assumptions, added Ramokgopa. Premiums paid by SPVs will be recovered through the regulated tariff, subject to approval by the National Energy Regulator of South Africa.
The facility is expected to support the first ITP bid window as part of broader efforts to address grid constraints, particularly in renewables-rich areas of the Northern, Western and Eastern Cape.
