South Africa’s energy transition is at a crossroads, and the path forward is clear: without significant investment in transmission infrastructure, the country’s ambitious renewable energy plans will remain stranded, quite literally. The stark reality is that the current grid, designed for a centralized, coal-based system, is ill-equipped to handle a decentralized, renewables-led future. This isn’t just a South African problem; it’s a global challenge, but the solutions require local action.
The numbers tell a compelling story. Over the past decade, only about 4,300 km of new transmission lines were built, while an estimated 14,000 km are needed in the next ten years. Most of the country’s prime wind and solar resources are located far from major load centers, and the ageing coal fleet is becoming increasingly unreliable. New generation capacity alone won’t solve these issues; without transmission, additional megawatts are effectively useless.
The implications for markets are profound. Stranded assets and delayed projects mean capital remains on the sidelines, and the economy continues to face the risk of load-shedding. This uncertainty stifles investment and slows economic growth. Conversely, a robust transmission network can unlock private capital, enable competition and wheeling, and lower long-run costs for businesses and consumers.
Financing such a massive undertaking—estimated at R440 billion over the next decade—won’t come from the fiscus alone. It demands a financing model that mobilizes private capital at pace and scale. Long-dated infrastructure debt, such as project finance loans, will play a crucial role. These instruments allow for large capital outlays to be repaid over extended periods, easing the burden on the economy and consumers.
Policy must also perform. Transparent, standardized, and predictable procurement processes will attract serious bidders and lower the cost of capital. Faster land access, time-bound permitting, and clear curtailment rules will make the risk financeable at scale. Over time, system costs will fall due to higher transparency, competitive public procurement programs, and better utilization of high-capacity corridors, resulting in cheaper delivered energy.
South Africa is not starting from scratch. The unbundling of the National Transmission Company of South Africa (NTCSA) clarifies roles, and private developers are already funding transmission infrastructure under self-build arrangements. The capital base is here: domestic lenders, development financiers, institutional investors, and infrastructure debt funds with deep experience in project-financed assets.
The opportunity is vast. A well-structured transmission investment program could unlock a multi-gigawatt pipeline of private generation, stabilize prices for industry, create high-quality jobs, and anchor South Africa’s Just Energy Transition in real assets that deliver inclusive growth. The call to action is straightforward: prioritize the grid, launch public procurement programs for transmission infrastructure on bankable terms, realign tariffs to be cost-reflective, and mobilize long-term financing.
In the end, transmission is not a supporting actor; it is the critical path. Build the grid, and everything else will follow. The choice is clear: prioritize transmission infrastructure or risk stalling the energy transition and economic growth. The time to act is now.