South Africa’s Transmission Development Plan (TDP) calls for the construction of 14,500km of transmission lines, and substations, which is a build rate five times the current pace of creation.
The country needs to build this amount of transmission lines to support the addition of 53GW of generation proposed by the Integrated Resources Plan 2025 (IRP2025).
To that end, the SA Government is introducing private sector participation in the development of national transmission infrastructure, which has necessitated the creation of the Independent Transmission Projects Programme (ITP).
Getting a start on independent transmission projects
The process got started with a Ministerial Determination gazetted at the end of March 2025, with seven pre-qualified bidders announced in December 2025, but the process has been quiet ever since.
For context: Bid Window 7 and transmission infrastructure procurement in SA
At the beginning of October, though, National Treasury and the Department of Electricity and Energy announced they would start a targeted round of Pre-Qualified Bidders (PQBs) consultation before issuing a Final Request for Proposals (RFP). They said they would thus release a second draft RFP package to the seven PQBs before the end of 2026.
This package is meant to “reflect the significant work undertaken since the first draft RFP and will provide bidders and their lenders with a further opportunity to identify any remaining material bankability issues”.
This new round of consultation is not about reopening the whole transaction for general comment but to give the preferred bidders more information.
“The second draft package is also expected to be accompanied by a draft non-binding term sheet for the Credit Guarantee Vehicle (CGV), providing PQBs and their lenders with greater visibility of the proposed credit enhancement framework. This will enable the CGV terms to be considered alongside the wider transaction architecture during the final targeted PQB consultation.”
Following this consultation, feedback will be assessed and accepted changes incorporated into the transaction documents before the package proceeds through the required governance and approval processes. The final RFP is thus now expected to be released in the second quarter of 2027.
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Credit Guarantee Vehicle first for South Africa
The Credit Guarantee Vehicle (CGV) became the topic of discussion at a Windaba 2026 conference session originally billed as a TDP and ITP update.
Setting the scene, Sandile Peta, IPP Office Programme Manager: Transmission, was careful to point out that this second draft was intended to indicate the amount of work that was done during the various engagements and would hopefully answer any remaining questions around bankability, and, as announced, align the RFP with the development of the CGV.
Joonkyung Seong, Senior Energy Economist and Senior Energy Specialist at the World Bank, was on hand to explain how the CGV came about. He prefaced his remarks by explaining that “payment risk is one of the biggest risks to any lending decision”.
Now that the National Transmission Company of South Africa (NTCSA) has been spun off from Eskom Holdings to manage the country’s transmission lines, questions have been asked about the new entity’s ability to meet financial obligations for any PPAs that become its responsibility.
Ultimately, as Seong put it: “It is difficult to keep up with grid investment using only public financing“, and he reminded the audience that developers and lenders had similar concerns when the REIPPP programme was introduced to address renewables generation procurement.
Back then, the SA Government used a sovereign guarantee as credit enhancement to assure lenders that they would receive payment for power provided if Eskom could not meet its obligations.
Do you remember? Reaping renewables in South Africa
Because the National Treasury is experiencing pressure on the fiscus, it views following the same path with a sovereign guarantee to the ITP as a contingent liability that would risk sustainable fiscal management, hence the introduction of the CGV.
CGV for more than just energy
“The National Treasury wants to devise an instrument to provide the credit, especially around the risk on government when facilitating private sector involvement,” said Seong.
The World Bank is helping National Treasury design the CGV, which Seong says has been incorporated and is now going through the licencing process to be able to perform under the prudential authority of the Reserve Bank of South Africa. The governance structure has been established and capitalisation is ongoing.
“Ultimately, it has to become a fully commercial vehicle. It will also be opened to other sectors like water and transport,” said Seong.
While the CGV will eventually be accessible to public private partnerships in various sectors, the ITP Office and Department of Electricity and Energy are starting by structuring the ITP’s guarantee term sheet.
Have you read? Private generation procurement takes off as SA prepares for wheeling and energy trade
From the money’s POV
Vincenzia Leitich, Standard Bank Executive: Energy and Infrastructure said they, like all banks, are awaiting the information on exactly how the CGV would work. “What will be important for us is to know, for instance, how the claims process works, the timing around it, the steps,” said Leitich.
Issues around termination payment, whether payment is on a lump sum basis or not, life of agreement, where systemic risk sits, and a whole host of details need to be spelt out so that lenders, and developers for that matter, can work out who pays for what and where responsibility for various processes ultimately sits.
It’s a slow process, but Mathapelo Malao, Investment Director of the Impact Fund Denmark, said an important lesson to learn from a country that has already gone very far down this road, is that “planning has to supersede generation deployment”.
As she put it, an unintended consequence of procuring generation procurement ahead of updating the IRP, was that now the country is sitting with curtailment because of a mismatch between generation resources and grid capacity to transport said generation capacity.
For her, a second lesson is around regional interconnectedness: “A lot of the European countries are very interconnected, that’s where we need to get to… a much wider integration around the trading of electricity. We are starting on that journey.”
“The third lesson is there is no shortage of capital in a market where you have mature regulation around the governance of electricity pricing and trading. Naturally, investors will follow,” said Malao.
Listen Reconciling Africa’s development ambition with the realities of capital availability
Keep the Credit Guarantee Vehicle localised
From the developers’ perspective, Wesley Fallon, EDF Head of Business Development, cautioned the entities who are building the ITP programme not to get too carried away with the lessons they have observed from similar programmes in other countries, which have been running for two decades or more.
“As South Africa, we need to look at where the programmes started and how they got to where they are now, not design a programme based on 20 years of work and evolution.
“What has made them successful is a level of alignment across the different organs of state, which makes development, permits and land rights go quite smoothly. The NTCSA will do most of the legwork, like the land rights, but the intention is to shift more of that work onto the developers…
“One of the bottlenecks is the time it takes to develop the projects, so if you can have more entities focused on this, you could theoretically make this go faster,” mused Fallon. ESI
