A credit guarantee vehicle to mobilise private sector capital by derisking projects will be launched in 2026, Finance Minister Enoch Godongwana announced in his delayed Budget speech.

He confirmed that the initial focus would be on independent transmission projects (ITPs), which would be used to help accelerate the expansion of the grid, which had emerged as a constraint to connecting new electricity generators.

“Once the vehicle has demonstrated its efficacy, it will be broadened to include other sectors,” he added.

The National Treasury and the World Bank have, for some time, been working on a credit-guarantee framework to facilitate ITP investments without increasing the level of contingent liabilities on the national accounts.

During a recent debate on President Cyril Ramaphosa’s State of the Nation Address, Electricity and Energy Minister Dr Kgosientsho Ramokgopa said an instrument had been designed to facilitate ITPs.

He said ITPs made sense in light of the prevailing weaknesses of the State's and Eskom’s balance sheets and the need to accelerate grid investment.

“We need to modernise and grow the transmission grid by over 14 000 km in the next ten years [and] we need about R450-billion,” Ramokgopa said.

Godongwana also confirmed that the ITP programme would be launched later this year.

“A request for information for a multi-line transmission package will also be issued by the Independent Power Producer Office in July this year, followed by a request for proposals in November.

“These will enable the private sector to play a key role in the expansion of the transmission network,” the Minister said.

Engineering News has reported previously that regulations for ITPs are being prepared for release for public comment, alongside a Ministerial determination that will be required to trigger the inaugural procurement programme.

The ITPs would be aligned with the project portfolio in the National Transmission Company South Africa's Transmission Development Plan, which envisages the construction of 14 500 km of new powerlines and 133 000 MVA of additional transformers by 2034.