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Government tackles transmission crisis with private sector collaboration
11 Dec 2024
Government took its biggest step yet toward solving the nation’s electricity transmission crisis, by partnering with the private sector through the launch of Independent Transmission Projects (ITPs). The ministry of electricity and energy is trying to modernise transmission infrastructure, ensuring a stable and reliable electricity supply.
South Africa needs 14,000km of transmission cables over the next decade. Source: Pok Rie/Pexels
The ITP programme is designed to support South Africa’s Transmission Development Plan (TDP) 2024, which calls for the construction of approximately 14,000km of transmission lines and associated infrastructure over the next decade.
This expansion is crucial for ensuring electricity supply stability, accommodating growing demand, and enabling access to new power generation resources.
The Integrated Resource Plan (IRP) and the TDP collectively aim to balance electricity supply and demand while fostering economic growth.
To achieve these ambitious targets, government plans to collaborate with the private sector through an Independent Transmission Infrastructure Procurement Programme.
The programme involves private sector participation in designing, financing, building, operating, and maintaining transmission facilities during a concession period, after which ownership will transfer to the National Transmission Company of South Africa (NTCSA).
Pilot programme and request for information
The initiative’s first phase includes a pilot project to test the procurement and contracting models under the ITP framework.
To inform this process, government has issued a Request for Market Information (RFI) to gather insights from private developers, financiers, and other stakeholders.
The RFI aims to explore alternative delivery models, assess market readiness, and identify innovative approaches to project implementation.
Models under consideration
Build-Own-Operate-Transfer (BOOT): The private sector builds, owns, operates, and transfers infrastructure at the end of the concession period.
Build-Operate-Transfer (BOT): Similar to BOOT, but without long-term ownership.
Build-Transfer-Operate (BTO): Ownership is transferred to the public sector upon construction completion, while operation remains with the private sector.
Build-Own-Operate (BOO): The private sector retains ownership and operation responsibilities.
The pilot programme will also evaluate risk allocation, project delivery timelines, and tendering stages to ensure effective implementation.
Advancing economic development objectives
In line with South Africa’s infrastructure policies, the ITP programme is committed to advancing economic development goals through black equity and local community participation, job creation, skills development, preferential procurement, and social and economic development.
Respondents to the RFI are encouraged to provide detailed proposals on how these objectives can be integrated into project delivery.
Commitment to public-private collaboration
Recognising the financial and technical demands of the TDP, government views private sector participation as essential.
The ITP programme represents a strategic response to Eskom’s limited balance sheet and South Africa’s constrained fiscal position.
By unlocking private investment, the programme aims to drive innovation, enhance infrastructure resilience, and achieve the National Development Plan’s 5% economic growth target.
