South Africa delayed by six months a request for proposals from private companies to build transmission lines, further slowing the expansion of the country's electricity infrastructure. The Independent Transmission Projects Program, designed to open the development of national infrastructure to the private sector, will seek proposals for the first phase in the second quarter of 2027, South Africa's National Treasury and the Department of Electricity said in a statement Thursday. The original target was the end of September this year.
Africa's biggest economy is transitioning to cleaner sources of energy and implementing reforms to bring in participation and investment from the private sector after a century-long monopoly held by state-owned power company Eskom Holdings SOC Ltd. While it has made progress, many steps have lagged in the unprecedented process. The first phase of the ITP program to build 1,164 kilometers (723 miles) of new transmission lines has drawn interest from international developers, including a company owned by Indian billionaire Gautam Adani and Chinese firms.
However, that's only the start of upgrading the grid to accommodate more renewable energy as South Africa gradually retires the coal-fired power stations that still generate most of its electricity. Eskom plans to install 14,000 kilometers of line over the next decade. Crews have already fallen behind, building less than two-thirds of its target of 423 kilometers in the year through March 2026. At the same time, a government-auction system to procure renewable power from private developers has slowed due to a lack of available grid connections. Gas-powered generation projects are also behind schedule and tied up in legal processes, causing Eskom to consider running coal stations - with 8 gigawatts of capacity outlined for retirement by 2030 - for longer than intended.
Even the configuration of the Independent Power Producers' office - which runs the government auctions to procure clean energy and now includes the ITP program - is in flux, Minister of Electricity and Energy Kgosientsho Ramokgopa told lawmakers on Thursday. When we rethink the institutionalization of the IPP office, it must be under the new context of both generation and transmission, he said. We have put the brakes on that so we can decide whether we want both generation and transmission under one umbrella or must they be decoupled.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing