Johannesburg: As part of ongoing efforts to unlock infrastructure investments and strengthen the energy sector, the government is calling on investors to invest in the country's transmission infrastructure through the Independent Transmission Projects (ITPs) Programme. This initiative marks the first time private investment will be allowed in South Africa's transmission infrastructure, paving the way for a faster rollout of new high-voltage power lines across the country. According to South African Government News Agency, the ITPs are a key component of Operation Vulindlela Phase II, playing a crucial role in the broader reform of the energy system. This reform aims to establish a competitive electricity market, allowing multiple generators and traders to compete in providing electricity to consumers at the lowest cost and with maximum efficiency. Deputy Minister of Finance Dr. David Masondo emphasized the government's commitment to rapid reform, stating, "We will not allow any vested interests to delay or o bstruct this reform process, including Eskom itself." Dr. Masondo, speaking at the launch of the Request for Pre-Qualifications for Independent Transmission Projects in Johannesburg, highlighted the government's dedication to ensuring long-term energy security and expanding access to affordable electricity for all South Africans. The National Treasury has designed a Credit Guarantee Vehicle to unlock private capital and complement public financing for infrastructure, aiming to minimize contingent liabilities. South Africa faces a significant infrastructure financing need, with an estimated infrastructure gap of R3.5 to R4 trillion by 2025. This calls for scaling up public financing and leveraging private capital through public-private partnerships. The Credit Guarantee Vehicle aims to mobilize private capital to address this gap by mitigating offtake risk for private investors and supporting the deployment of development partner funding under the Just Energy Transition Partnership. Initially focused on tra nsmission infrastructure investments, the Credit Guarantee Vehicle will later expand into other areas such as logistics and water. Operated as a private company with a standalone entity and independent balance sheet, it will target a minimum credit rating of AAA and be managed by a professional executive team and board of directors. The vehicle plans to issue payment and termination guarantees to a Special Purpose Vehicle established for the project, reducing early investment risks in ITPs. The initial capital raise target is US$500 million, supported by National Treasury's commitment to providing first loss capital of 20%. By July 2026, the Credit Guarantee Vehicle aims to be operational, aligning with the first phase of ITP projects. Dr. Masondo remarked that South Africa's ITP programme, supported by credit guarantees, presents a globally innovative model tailored to the nation's context and needs. It is expected to generate substantial new infrastructure investments, connect thousands of megawatts of re newable energy capacity, and support economic growth and job creation, powering the economy into the future.
