A $500m credit guarantee facility aimed at jump-starting SA’s transmission infrastructure overhaul will function as an independent entity, free from political interference, deputy finance minister David Masondo says.
The government will initially provide R2bn of the funding required to begin expanding the country’s electricity transmission lines to 14,000km, which is a critical step as state-owned utility Eskom battles grid constraints that threaten new generation projects.
The mechanism is designed to attract private capital by de-risking early-stage investments and signalling a more transparent, apolitical approach to infrastructure financing.
“So for the transmission, they are not going to be getting a government guarantee. They will be getting this credit guarantee, which will have its own board and independent CEO. We will come in as a shareholder, but equivalent to others,” Masondo said on Thursday.
This will address investor concerns about governance and accountability in large-scale public infrastructure projects and SOEs, which have been plagued by delays and corruption.
The process is expected to be operational by mid-2026. Bidders have until September 23 to submit their request for quotation (RFQ) applications. The shortlist of pre-qualified bidders will be announced by the end of November when the request for proposals (RFP) will also be released.
Expanding SA’s transmission grid is vital, as current constraints are preventing independent power producers from connecting to the grid, putting the brakes on the growth of clean energy providers and slowing efforts to eliminate load-shedding. The available grid capacity is already exhausted in the Western Cape, Eastern Cape and Northern Cape, and the Free State and North West are almost out of space too, parliament heard last month.
On Thursday, the department of energy and electricity and the Treasury launched RFPs for interested private sector players.
“The private sector will design, finance, construct, operate and maintain transmission lines and substations,” it is stated in the RFP.
The first independent transmission projects (ITP) will include 1,164km of 400kV transmission lines and associated infrastructure in the Northern Cape, North West and Gauteng.
Eskom, through the National Transmission Company SA (NTCSA), said it was preparing for the seven projects to be procured under Phase 1 of the ITP Programme.
“The seven projects include those beyond the broader Cape regions and are planned to reach implementation readiness in 2026. We are comfortable that NTCSA will continue with these projects to ensure that they are ready for the ITPs to construct after the procurement process is completed,” Eskom said in a statement.
“The clear, transparent policy framework is designed to crowd in large-scale private sector funding through providing the safeguards required, including predictability and governance, that enable developers to seamlessly start due diligence to bid competitively.”
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