After years where the country’s energy debate was dominated by load shedding, emergency generation and renewable energy procurement, the debate has moved on to the next binding constraint – the grid. The National Transmission Company South Africa’s (NTCSA’s) Transmission Development Plan is supposed to add about 14,500km of new transmission lines over the next decade, along with substations, transformers and other grid infrastructure.
At an Africa Energy Forum panel on SA’s grid resilience and expansion this week, hosted by Mulilo and moderated by Avra Moodley, general counsel at Mulilo, the discussion was not about whether transmission is needed. The question is whether SA can build fast enough, finance the roll-out without leaning too heavily on the sovereign balance sheet, and use the programme to rebuild domestic industrial capacity.
The NTCSA Development Plan is a R440-billion programme over 10 years, and one that will test whether the government, Eskom, the NTCSA, financiers and private developers can move from talk shops to implementation.
Monde Bala. (Photo: NTCSA) Monde Bala, CEO of the NTCSA, said its priorities were execution of the Transmission Development Plan, opening the electricity market and ensuring the system remained reliable while expansion took place.
“The Transmission Development Plan itself is an ambitious programme that the NTCSA and its partners are executing on behalf of the country,” Bala said. “It aims to connect some 56GW of largely renewable energy.”
The pace required is far beyond SA’s recent track record. Bala said the country had been delivering transmission infrastructure at about 250km a year over the past decade. To meet the plan’s requirements, that needed to increase seven to 10 times.
Silas Zimu, energy adviser in the Presidency. (Photo: ESI Africa / X) Silas Zimu, ministerial adviser in the Department of Electricity and Energy, said the immediate policy focus was transmission, not distribution.
“If we try to do everything at the same time, we’re going to fail,” he said. “At the moment, that reprioritisation after load shedding is transmission.”
Zimu said the independent transmission programme was intended to bring the private sector into the build-out, but the assets would still have to be built to NTCSA specifications and ultimately transferred back.
“We need to do a minimum of about 2,000km a year. It’s a huge task,” he said.
Capital meets grid
The opportunity for the private sector is not abstract. Peter Venn, CEO of Seriti Green, said his company had already handed over R1.2-billion worth of transmission infrastructure to Eskom at the end of November last year.
“We built our main transmission substation in 17 months with 100% South African companies,” Venn said. “If you want to hit the Transmission Development Plan target, let’s empower project managers and the private sector to really do this.”
Peter Venn. (Photo: LinkedIn) For Venn, the main problem is not necessarily finance. It is permitting, sequencing and trust between developers, Eskom and the government. He said Seriti Green planned to spend between R4-billion and R5-billion on transmission infrastructure over the next three years, and was not asking for a guarantee. What it wanted was certainty that it would receive fair access to the grid capacity it unlocked.
“Let’s get in a room. Let’s build R10-billion, R20-billion. Let’s give it to Monde to run properly. We need generation, we need transmission, and it’s totally possible,” Venn said.
Financing remains central to the debate. Lungelo Nkwanyane, Acting Director: Energy and Telecoms at the National Treasury, said Eskom and the NTCSA balance sheet could fund part of the build-out, but both the utility balance sheet and the sovereign balance sheet were constrained.
“Given the fact that they are constrained and also the sovereign is constrained from continuous guarantees, we are looking at bringing in private capital,” Nkwanyane said.
This is where the Credit Guarantee Vehicle comes in. It is intended to bridge a confidence gap in infrastructure finance without relying only on sovereign guarantees. Nkwanyane said the vehicle was not only for the independent transmission programme.
“It’s really just an infrastructure broader vehicle. We are just starting with the Independent Transmissions Projects because they are sort of way ahead in terms of the development,” he said.
The missing link
Mpho Mokwele, Group Executive: Coverage and Origination at the Development Bank of Southern Africa, noted that transmission was now the missing link in the energy system, not only in SA but across the continent.
“For years I’ve been coming to the Africa Energy Forum, and we’ve been talking about energy generation capacity, but transmission and distribution has been elevated,” Mokwele said. “It’s a key discussion point, a key missing link.”
Mpho Mokwele. (Photo: dbsa) Mokwele said the Credit Guarantee Vehicle could be replicated across the continent, where governments and uti…
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