South Africa may soon receive a major financial boost from the World Bank Group, with $500 million under consideration to support the country’s participation in a new credit guarantee facility aimed at unlocking private investment in South Africa’s ambitious electricity transmission grid expansion plan.
To accelerate the transition to renewable energy sources, the proposed project involves constructing 14,500 kilometers of new transmission lines and increasing transformer capacity over the next ten years. The anticipated total cost of the scheme is $25 billion.
Treasury officials affirmed that the World Bank assistance might consist of a $100 million direct investment from the International Finance Corporation (IFC) and a loan from the International Bank for Reconstruction and Development (IBRD) to support South Africa’s junior capital contribution to the guarantee vehicle. 
The credit guarantee facility, which will operate independently of the National Treasury, is designed to provide payment assurances for private sector investors, covering potential defaults and reducing risk in the rollout of new transmission infrastructure.
An estimated 20 gigawatts of renewable energy projects have stagnated in South Africa as a result of a shortage of transmission infrastructure, according to Standard Bank. The Northern Cape, Western Cape, and Eastern Cape are home to a large number of these wind and solar projects. These areas are abundant in renewable resources but are remote from the grid corridors that now connect to coal-powered stations in the north.
Electricity Minister Dr. Kgosientsho Ramokgopa has repeatedly stressed the importance of unlocking transmission bottlenecks to achieve the country’s energy transition goals and reduce reliance on aging coal infrastructure.
This funding package, which would provide long-term solutions to load-shedding and boost investor confidence in green energy, could be a game-changer for South Africa’s energy infrastructure and renewable energy future if it is approved by the World Bank Group board later this year.
By taking this action, South Africa is demonstrating its dedication to updating its electrical grid, facilitating cleaner energy, and guaranteeing a steady supply of electricity for coming generations.
