The government of South Africa has launched a request for information (RFI) to gauge the interest and readiness of the private sector to take part in the pilot tender for the independent transmission projects (ITP) programme, which is planned in 2025.

The RFI seeks to gather insights on the market's interest, capabilities and potential solutions for accelerating transmission infrastructure development in the country, with the latest development plan (TDP 2024) indicating the need to establish about 14,000km of lines and related infrastructure over the next 10 years. The deadline for responses to the RFI is 28 February.

The RFI will assist in the design of an effective procurement framework, inform the development of regulatory instruments and guide the preparation of tender documents. It is open to all parties including private developers, financiers, development finance institutions (DFIs) and contractors.

Responses to the RFI will play a critical role in shaping the final structure of the tender and the successful implementation of the ITP programme. The RFI is being executed by the Independent Power Producers Office (IPPO) on behalf of the Ministry of Electricity and Energy and in collaboration with the National Treasury.  

Through the ITP, the government is looking to collaborate with the private sector for the expansion and strengthening of the South African transmission network in light of the significant capital investment, capacity and expertise required to deliver TDP 2024.

Under the programme, the private sector will be required to develop, design, finance, build, operate and/or maintain designated transmission facilities for the duration of a concession period and subsequently transfer ownership to the National Transmission Company South Africa (NTCSA).

The pilot tender will cover specified transmission facilities and the lessons learned and outcomes will provide guidance on future procurement and the contracting model to be utilised for the government’s broader ITP ambitions.

The RFP can be viewed here.

The NTCSA officially commenced trading in July as a separate and wholly owned subsidiary of state power utility Eskom Holdings. It now owns and operates South Africa’s transmission system.

In late November, the NTCSA announced it had signed long-term agreements with 28 local companies to provide services for the construction of substations in the country. In August, the company signed long-term agreements with 19 local firms to become suppliers to overhead transmission line construction projects in order to accelerate infrastructure rollout.

Previously, in April, state power utility Eskom’s transmission unit signed on 14 owner's engineer (OE) companies, paving the way for a competitive bidding process for multiple tenders on the TDP.

TDP 2024 was presented in late October and covers the period 2025-34. The plan predicts that capacity will increase from 66GW in 2024 to 106.5GW in 2034. This represents an uptick of 0.4GW from the previous TDP, which was published in 2022 and predicted growth in capacity of 106.2GW.

Based on the network requirements, between 2025 and 2029, about 5,044km of power lines and 87 transformers are required to be built (these include projects in the development and execution phases). The capital expenditure for capacity expansions in this period is estimated at Rand 80.7 billion and refurbishments at Rand 17.8 billion.

TDP 2024 can be viewed here.

In late December, the Ministry of Electricity and Energy announced it had appointed eight bidders with a combined contracted capacity of 1,760MW under the seventh bid submission window of its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

The bid window was launched in December 2023, targeting 5,000MW of capacity, comprising 1,800MW of solar photovoltaic (PV) and 3,200MW of onshore wind. A total of 48 bids were received, totalling over 10,218MW, including 40 PV and eight onshore wind projects in mid-August 2024. Of these, 30 PV and four onshore wind schemes were evaluated as compliant with the requirements of the request for proposals (RfP).

The eight bidders involve a team of Egyptian/UAE developer Infinity Power and the local Pele Green Energy with six bids, a joint venture of the local Mulilo, Reatile Renewables and Perpetua Energy and a consortium of Norway’s Scatec and the Greenstreet and Redstreet special purpose vehicle (SPV).

The ministry added that it is considering the appointment of additional bidders for both
onshore wind and PV, subject to value for money negotiations and the reallocation of capacity under the bid window.

In addition, the ministry announced it had selected eight preferred bidders with a total investment of Rand 12.8 billion under the second bid window of its Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP). The developers include Mulilo with five bids, the UAE’s AMEA Power with two bids and France’s EDF with one bid.

A total of 31 bids were received in late August 2024 for the bid window, which looks to procure a total capacity of 615MW/2,460MWh across eight sites in the North West, Gauteng and Free State supply areas.

According to the ministry, the second BESIPPPP bid window was found to be highly competitive, with a marked increase in the number of bids compared to the first bid window, resulting in a 35% decrease in the average evaluation price.

The first BESIPPPP bid window aims to procure up to 513MW of capacity at five sites in the Northern Cape and North West provinces, with three bidders appointed to undertake projects, namely a team of Mulilo, EDF, Pele Energy Group and Gibb-Crede; a consortium of Scatec and Perpetua; and African Green Ventures.

Top photo: South Africa transmission lines (© John Hogg/World Bank | Flickr)