About 32 development partners have engaged the National Treasury, since February 2025, through the newly designed Credit Guarantee.
It is expected to unlock private capital and complement public financing for infrastructure, while minimizing contingent liabilities, to be operationalized by July 2026.
Speaking at the Request for Quotations (RFQ) for independent transmission projects this week, David Masondo, the Deputy Minister of Energy, “this vehicle will also support the efficient deployment of development partner funding under the Just Energy Transition Partnership (JETP) and the achievement of the country’s decarbonisation commitments.
While the Credit Guarantee Vehicle will focus on the initial phase on enabling investments in transmission infrastructure, it will be expanded into other areas such as logistics and water over time. The vehicle will be incorporated as a private company in South Africa, regulated by the Prudential Authority. It will operate as a standalone entity with an independent balance sheet and will target a minimum credit rating of AAA.”
The projects are part of the National Transmission Company of South Africa’s plan to build more than 14,000 km of new lines in the next 10 years.
South Africa’s infrastructure need is estimated at around R3.5 to R4 trillion by 2025, or around R400 billion per annum.
“We are targeting an initial capital raise of US$500 million for the vehicle, spread across a range of development partners. National Treasury has committed to providing first loss capital of 20%, which will be an initial US$100 million increasing to US$500 million (R9 billion) if needed” said Masondo.
Dan Marokane, Eskom’s Group Chief Executive, said he welcomes the achievement of the next stage of ensuring new electricity generation capacity can connect to the transmission grid.
“A significant milestone has been reached today to realise the delivery of new transmission infrastructure that will deliver greater competition and facilitate the transition from high carbon to low carbon sources of energy to drive economic growth to the benefit of all citizens, thanks to the leadership of the Minister of Electricity and the Director General of the National Treasury.”
Picture: NTT Training