Eskom’s R440 billion project hits a roadblock

South Africa delayed by six months a request for proposals from private companies to build transmission lines, further slowing the expansion of the country’s electricity infrastructure.

The Independent Transmission Projects (ITP) Program, designed to open the development of national infrastructure to the private sector, will seek proposals for the first phase in the second quarter of 2027.

This was announced by South Africa’s National Treasury and the Department of Electricity in a statement on Thursday, 1 October. The original target was the end of September this year.

Africa’s biggest economy is transitioning to cleaner energy sources and implementing reforms to attract private-sector participation and investment, following a century-long monopoly by state-owned Eskom.

While it has made progress, many steps have lagged in this unprecedented process. 

The first phase of the ITP program to build 1,164 km of new transmission lines has drawn interest from international developers, including a company owned by Indian billionaire Gautam Adani and Chinese firms. 

But that’s only the start of upgrading the grid to accommodate more renewable energy as South Africa gradually retires the coal-fired power stations that still generate most of its electricity.

Eskom plans to install 14,000 km of line over the next decade. Crews have already fallen behind, building less than two-thirds of their target of 423 km in the year through March 2026.

At the same time, a government auction system for procuring renewable power from private developers has slowed due to a lack of available grid connections.

Gas-powered generation projects are also behind schedule and tied up in legal processes, causing Eskom to consider running coal stations – with 8 GW of capacity outlined for retirement by 2030 – for longer than intended.

Even the configuration of the Independent Power Producers’ (IPP) office is in flux, Minister of Electricity and Energy Kgosientsho Ramokgopa told lawmakers on Thursday.

The IPP office runs the government auctions to procure clean energy and now includes the ITP program.

“When we rethink the institutionalisation of the IPP office, it must be under the new context of both generation and transmission,” he said.

“We have put the brakes on that so we can decide whether we want both generation and transmission under one umbrella or must they be decoupled.”