World Bank Group considers $500m boost for South Africa's transmission expansion

South Africa is courting private investment for an ambitious plan to add 14,500km of new lines and enhanced transformer capacity over the next decade, at an estimated total cost of $25bn, as it looks to emerge from a decade of crippling power cuts that have battered the economy.

The proposed credit guarantee vehicle aims to help overcome transmission infrastructure bottlenecks that have held back some 20 gigawatts of renewable energy from connecting to the national electricity network, according to Standard Bank.

Many of the renewable projects are situated in the sun-baked Northern Cape or windswept Western and Eastern Cape regions, far from existing transmission corridors linking most of South Africa to the coal-powered generation plants in the north.

Operating as a stand-alone entity, the credit guarantee vehicle would issue guarantees instead of South Africa's treasury and would cover payment defaults, for instance, should something go awry during the roll-out.

"We could cover or be committed to finance half a billion US dollars of the government of South Africa's first loss or junior capital participation," Yadviga Semikolenova, a senior World Bank manager, said late on Thursday, 19 June 2025.

South Africa has sought not to put further pressure on its strained finances by offering additional sovereign guarantees, as it faces lacklustre growth, high debt-servicing costs and the failure to agree a VAT hike within the government coalition this year.

Issued on Bizcommunity by Wendell Roelf | https://www.bizcommunity.com/article/world-bank-group-considers-500m-boost-for-south-africa-transmission-expansion-926374a