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South Africa tests market appetite for Independent Transmission Projects ahead of pilot

11th December 2024

By: Terence Creamer

Creamer Media Editor

     

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South Africa has issued a request for information (RFI) to gauge the level of interest and readiness of industry to participate in Independent Transmission Projects (ITP) as it prepares to launch an ITP pilot tender in 2025.

Described as a “sounding exercise”, the RFI has been unveiled jointly by the National Treasury and the Ministry of Electricity and Energy, and includes a deadline for responses of February 28.

It comes as government seeks to integrate private-sector participation into the roll-out of electricity grid infrastructure, where an investment backlog estimated at up to R390-billion is constraining the connection of new, mostly renewables, generation.

The ITPs will be aligned with the project portfolio in the National Transmission Company South Africa's (NTCSA's) Transmission Development Plan, which envisages the construction of 14 500 km of new powerlines and 133 000 MVA of additional transformers by 2034.

The NTCSA, which is an independent subsidiary of Eskom Holdings, has divided the TDP into two phases.

During the first phase to 2030, 5 043 km of powerlines and 41 325 MVA of transformers are planned, as compared with 9 450 km and 91 325 MVA of transformers between 2031 and 2034.

The ramp-up under the first phase is also relatively modest, with only 286 km planned for the current financial year, alongside 2 380 MVA, rising to 2 122 km in 2029 and 18 735 MVA.

The NTCSA has acknowledged that a step change is needed in the pace of construction but has yet to fully embrace the ITP concept.

In their joint statement, the National Treasury and the Ministry of Electricity and Energy indicate that the ITP programme is a strategic response to South Africa’s constrained fiscal position, Eskom’s limited balance sheet, and the need for greater private-sector involvement in the country’s energy transition.

The National Treasury has also been working with the World Bank for some time on the creation of a credit guarantee instrument that will be structured to de-risk the projects and lenders in the absence of government guarantees.

The RFI exercise, the departments add, will seek to gather insights on the market’s interest, capabilities, and potential solutions for accelerating transmission infrastructure development.

It will also assist in the design of an effective procurement framework, inform the development of regulatory instruments, and guide the preparation of the tender documents.

Government urged interested parties, including developers, funders, and financiers, to participate and provided a link to a website containing additional information and  instructions for RFI respondents.

The website is hosted by the Independent Power Producer Office, which has overseen the public procurement of more than 7 300 MW of operational renewable-energy capacity since 2011, and the entity has also been designated to oversee the pilot ITP procurement programme.

Edited by Creamer Media Reporter

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