The World Bank has approved a R27,6 billion loan to support South Africa’s electricity transmission infrastructure expansion.
The funding will assist with expanding grid access and enhancing municipal distribution. It will also attract further investment in transmission required by the Ministry of Electricity and Energy to carry out the Independent Transmission Programme (ITP), the World Bank says.
“Our ongoing partnership with the World Bank will assist us to move forward with greater speed on the reforms vital to transforming our infrastructure landscape,” said Finance Minister Enoch Godongwana.
A request for qualification under the ITP is expected in July, followed by a request for proposals in November, according to the Independent Power Producer (IPP) Office. The first phase of the programme includes the procurement of 400 kV transmission lines and associated infrastructure spanning 1 164 km, with private developers responsible for the design, financing, construction and operation of these assets under a concession model. Ownership will ultimately be transferred to the National Transmission Company South Africa (NTCSA).
In an update on the progress of the ITP following the loan’s approval, Godongwana said a credit guarantee vehicle is being developed in collaboration with the World Bank.
It will function as a South African insurance company for transmission investors with all necessary licences and approvals. A draft information memorandum has been drawn up and will be shared with development partners, Godongwana said. “The ITP is not just an infrastructure intervention, it is an economic stimulus, an industrial enabler and a symbol of South Africa’s readiness to partner.
“We invite developers, manufacturers, financiers and technology leaders to partner with us, to invest, to build and to power South Africa’s energy future towards national growth and resilience.”
