Amit Mohan, the head of Private Credit at Climate Fund Managers (left), and Stephen Dihwa, the Co-ordination Centre executive director of the Southern African Power Pool at the launch of the southern African RTIFF fund in Cape Town. Photo: Supplied
The Southern African Power Pool (SAPP) yesterday said that it had appointed finance fund manager Climate Fund Managers (CFM) to manage a new $1.3 billion (R24.6bn) fund to facilitate cross-border energy transmission in southern Africa.
This comes as several countries in Africa face load shedding, including South Africa.
SAPP, in partnership with the Southern African Development Community (SADC), said in a joint statement that the Regional Transmission Infrastructure Financing Facility (RTIFF) would have a fund life of up to 20–25 years.
The facility, which launches with $20 million in commitments from SAPP, targets a first close of $500m in 2025 to be raised from public and private sector investors locally and internationally and a final close of $1.3bn within 24 months.
SAPP is a co-operation of 12 southern African countries represented by their national power utilities and some private utilities under the SADC, which co-ordinates the planning, generation, transmission and marketing of electricity in southern Africa on behalf of member state utilities.
The RTIFF aims to improve energy transmission within and between 16 SADC member states and with other power pools, generating long-term energy supply security, economic growth, and climate resilience through the inclusion of sustainable energy sources.
“RTIFF will prioritise projects that focus on connecting currently unconnected SAPP members, help relieve congestion bottlenecks to regional electricity trading, promote inter-continental power trading through transmission corridors, and support the adoption of new generation renewable energy space in the region,” the statement said.
RTIFF will provide power companies and project developers working to tackle transmission issues with access to patient capital and development expertise to establish strategic interconnections that allow for increased electricity trade, it said.
Victor Mapani, the chairperson of the SAPP executive committee, said: “The provision of sustainable power can be distilled into three activities: generation, transmission and distribution.
“While generation receives the lion’s share of attention, the importance of delivering that power to where it is needed is equally critical. Access to capital is the number one barrier facing developers of energy transmission infrastructure. RTIFF dismantles this by enabling the private sector to work alongside public sector utilities to roll out new transmission lines at scale. We are delighted to have appointed CFM with their strong track record in the African energy sector to establish and manage this innovative facility and to help our member states finally secure a sustainable, resilient energy supply.”
Engineer Stephen Dihwa, Co-ordination Centre executive director of SAPP, said: “RTIFF aims to mobilise the substantial investment capital required to invest in new cross-border transmission infrastructure as well as relevant in-country transmission infrastructure required for regional electricity trading to enable SAPP members to increase and improve trading volumes, alleviate congestion on the existing network, incorporate new and green regional power generation resources, improve reliability and create adequate redundancy in the system.
“Interconnection across SAPP via strategic transmission corridors can save the SADC region an estimated US$37–42bn in net present value (NPV) by 2040. We have identified eight high-priority transmission projects for RTIFF that will bring economic benefits of $4.3bn in NPV.”
Amit Mohan, the head of Private Credit at CFM, said: “The lack of investment in grid infrastructure is one of the reasons for ongoing blackouts in many parts of southern Africa. With roughly 180 million people living in the region exposed to ongoing power disruptions, universal access to reliable electricity will improve people’s health, safety, financial inclusion, and economic activities. If we don’t invest in grids today, we will face gridlock tomorrow.”
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