Implementation of South Africa’s grid expansion project is taking shape as it draws interest from various international developers. Estimated to cost $25 billion, the project has drawn global interest, from Indian billionaire Guatam Adani’s energy company to major Chinese state-owned power firms. The move marks a major moment in the nation’s effort to stabilize its electricity supply. Furthermore, it also provides South Africa with the opportunity to unlock its renewable potential. Launched in December, the Independent Transmission Projects (ITP) program invites various state-owned and private entities.
The aim is to facilitate in the construction of 14,000 kilometers (8,700 miles) of new power lines. The expansion will connect an ambitious pipeline of 34 gigawatts of wind and 25 gigawatts of solar capacity planned over the next 14 years. This will address the strain on South Africa’s ageing and congested grid. According to the Independent Power Producer Office, 17 companies and consortia submitted bids during the pre-qualification round. The grid expansion project will facilitate projects such as Africa’s second nuclear power plant as amicable transmission of power and accessibility will be easier.
Project Factsheet
Importance:
- Suggested $25 billion project to modernize and stabilize South Africa’s national power grid.
- Aims to enable the addition of 34 GW of wind and 25 GW of solar capacity over the next 14 years.
- Is part of the core building block of South Africa’s overall energy transition strategy, replacing coal-fired power.
Infrastructure:
- Covers the development of 14,000 km of new transmission lines in different provinces.
- Initial phase consists of 1,164 km of lines, with a capacity of over 3,000 MW of new capacity.
- Involves huge procurement of grid equipment, substations, and transformers to replace the current infrastructure.
Developer/Consortium
- Governed by the Independent Power Producer (IPP) Office of the Ministry of Electricity and Energy.
- Confirmed interested bidders are Adani Power (India), China Southern Power Grid International, State Grid International, EDF Power Solutions (France), and local entities such as SOLA Group and Mulilo Renewable Energy Ltd.
- With financial and advisory assistance from the Development Bank of Southern Africa (DBSA).
Funding/Timeline
- Estimated total cost: $25 billion.
- Pre-qualification round was appealed to by 17 companies and consortia with evaluation set to be concluded by November 2025.
- Government plans to launch credit guarantees by July 2026 to draw in private investment input
The Companies Interested in South Africa’s Grid Expansion Project
Various state-owned and private energy bids showed interest in facilitating the implementation of South Africa’s grid expansion project. These include Adani Power’s Middle East Arm, China Southern Power Grid International and State Grid International Development Co. Furthermore, it includes France’s EDF Power Solutions, and local players such as SOLA Group and Mulilo Renewable Energy Ltd. The evaluation phase is expected to conclude in November. Upgrading the grid forms the backbone of South Africa’s evolving energy transition strategy. The government plans to gradually retire its coal-fired power stations, which still supply most of the nation’s electricity. Furthermore, it will ramp up investments in gas, renewables, and nuclear energy, according to its latest energy blueprint. The first phase of South Africa’s ITP will involve the construction of 1,164 kilometres of transmission lines. Through this, it will more than 3,000 megawatts of new capacity, Electricity Minister Kgosientsho Ramokgopa noted in April.
Expected Challenges on the Independent Transmission Projects Program
South Africa’s grid expansion project, also known as the ITP program, is expected to have various minute challenges in its implementation. The project is expected to face minimal land dispute challenges, which have historically delayed infrastructure builds. Subsequent phases, over ten times larger, will also involve the procurement of transformers, substations, and grid equipment across multiple provinces. To attract private investors, the government plans to roll out credit guarantees by July 2026, primarily funded by commercial lenders. The Development Bank of Southern Africa (DBSA) noted that similar public-private grid partnerships have succeeded in other countries. Examples include India, Brazil, Peru and Chile. It entails a scope where private developers take on construction and financing risks in exchange for long-term ownership or operating rights.
