The South African Photovoltaic Industry Association (SAPVIA) has welcomed finance minister Enoch Godongwana’s announcement of a R2 billion credit guarantee vehicle specifically for electricity transmission expansion.
The association says it is a pivotal step in translating energy policy into financial reality.
Godongwana made the announcement yesterday during the Mid-Term Budget Policy Statement in Cape Town, as the country embarks on structural reforms, particularly on energy and logistics.
According to the minister, the R2 billion fund will support electricity transmission expansion, directly contributing to government’s energy security efforts, while also driving decarbonisation.
“This heralds a new era in PPPs [public-private partnerships], where private investment in high-voltage transmission lines is enabled,” he said.
“This is real progress in our move away from merely fixing the power utility, to securing power to the grid from a range of sources.”
SAPVIA says ahead of the speech, it had called on the minister to provide concrete fiscal and strategic pathways for financing the large-scale solar PV build-out, specifically requiring “confirmation of financial commitments and innovative funding vehicles” for critical transmission infrastructure.
Sim Khuluse, technical and policy manager of SAPVIA, says the minister heeded this call. “The minister’s announcement is a game-changer and a direct answer to the industry’s most critical request.
“The commitment of R2 billion to a credit guarantee vehicle for transmission expansion is precisely the kind of innovative, blended finance mechanism we called for. It enables a new era of public-private partnerships, which de-risk private investment without state guarantees, directly targeting the single largest bottleneck to connecting new capacity.”
The association views this measure as essential to support the ambition of the Integrated Resource Plan, noting that the structural reforms in energy are now key to lifting the nation’s growth rate.
Furthermore, the industry body says the minister’s acknowledgment of more than 2 220MW of solar, wind and battery projects in development reinforces the momentum in the private generation sector.
Said Godongwana: “Through Operation Vulindlela, now in phase two since it started in 2021, we are building tangible momentum across energy, logistics, water, and now critically, in local government, spatial integration and digital transformation.
“Not long ago, our country was on the brink of an energy crisis. Unreliable electricity supply threatened to derail our economy and the transformation of our society. I am pleased to say that we have avoided this scenario and instead have begun a march towards reliable supply of energy.”
The minister pointed out that load-shedding has been significantly reduced.
“Through focused and targeted interventions led by Operation Vulindlela, we are transforming the sector. We are building a competitive wholesale market that gives investors certainty. The National Transmission Company has now applied for its market operator licence. We are investing in new capacity and alternative sources. More than 2 220MW of solar, wind and battery projects are in development, with 720MW at advanced stages.”
He added that Eskom has added 800MW from Kusile Unit Six and is showing signs of operational and financial improvements.
“This is a blueprint for action. By establishing a clear funding pathway for the grid, the minister has provided the stability and financial clarity required for private capital to flow at the speed and scale needed to secure South Africa’s energy future,” Khuluse concludes.
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