The Departments of Electricity and Energy (DEE) and National Treasury have announced an adjustment to the procurement timeline for South Africa’s Independent Transmission Projects (ITP) programme.
The adjustment introduces another round of Pre-Qualified Bidders (PQBs) engagement before the issuance of the Final Request for Proposals (RFP).
“Following the first round of engagement with the seven ITP PQBs, government has decided to undertake a further targeted round of PQB consultation before the issuance of the Final Request for Proposals (RFP).
“A second draft RFP package will be issued to the seven PQBs before the end of 2026. The package will reflect the significant work undertaken since the first draft RFP and will provide bidders and their lenders with a further opportunity to identify any remaining material bankability issues,” the two departments said in a statement.
The “focused, time-bound consultation” is not aimed at reopening the transaction for general comment.
Rather, it is designed to provide the bidders with a "substantially complete and coherent transaction package so that issues that could materially affect bid submission, financing or financial close can be identified and addressed before the documents are finalised”.
“The second draft package is also expected to be accompanied by a draft non-binding term sheet for the Credit Guarantee Vehicle [CGV], providing PQBs and their lenders with greater visibility of the proposed credit enhancement framework.
“This will enable the CGV terms to be considered alongside the wider transaction architecture during the final targeted PQB consultation.
“Following this consultation, feedback will be assessed and accepted changes incorporated into the transaction documents before the package proceeds through the required governance and approval processes,” the statement read.
The final RFP is targeted for release in quarter 2 of the 2027 calendar year.
Credit guarantee vehicle
The statement noted that National Treasury, working with the World Bank Group and other partners, has made “significant progress during 2026 in establishing and operationalising the CGV as an important component of the credit enhancement architecture being developed for Phase I”.
“The core Joint Development Agreement between National Treasury and FSD Africa was signed on 2 July 2026 to support the operationalisation of the CGV. The governance arrangements for the CGV have been established, including a project team, Steering Committee, Caretaker Board and Advisory Board. The CGV was registered and incorporated on 12 August 2026, with its statutory directors, auditor and corporate secretariat appointed.
“Work with prospective capital investors is also progressing. Investor due diligence is taking place from 28 September to 2 October 2026, providing prospective investors with the information required to progress their investment proposals.
“Importantly for the ITP procurement, a draft non-binding CGV term sheet has been developed and will be aligned with the wider ITP transaction architecture, including the regulatory cost recovery framework, risk allocation and ring-fencing arrangements,” the statement announced.
Further supporting the preparation and establishment of the CGV, the National Treasury and Development Bank of Southern Africa have concluded a Memorandum of Agreement in which the bank will host the Project Implementation Unit for the CGV.
“The MOA established the governance framework and allocation of responsibilities between National Treasury and DBSA.
“Following operationalisation of the CGV, further due diligence will be undertaken during the first quarter of 2027, with the current work programme targeting a binding CGV term sheet by the end of the first quarter of 2027,” Thursday’s statement read.
Expanding national grid capacity
The two departments noted that South Africa requires a significant expansion of the transmission network to “connect the new generation required under IRP 2025”.
This proposed expansion requires increased public investment alongside private capital and delivery capacity, with transmission investment a key “enabler of new generation, industrial development and economic growth”.
Phase I of the ITP Programme spans approximately 1164 kilometres of new transmission infrastructure and is the “first step in establishing private participation as an additional delivery mechanism”.
“Government intends to build on Phase I through a programmatic pipeline of ITPs, creating a more predictable and repeatable framework for investors, lenders and the transmission supply chain.
“A sustained pipeline will also support localisation and industrialisation by providing greater visibility of future demand for equipment, construction capability, skills and services.
“The ITP Programme therefore reinforces Government’s commitment to mobilising private investment alongside public investment to accelerate the expansion of South Africa’s transmission infrastructure,” the statement said. - SAnews.gov.za
