South Africa is courting private investment for an ambitious plan to add 14 500km of new lines and enhanced transformer capacity over the next decade, at an estimated total cost of 25-billion, as it looks to emerge from a decade of crippling power cuts that have battered the economy.
The proposed credit guarantee vehicle aims to help overcome transmission infrastructure bottlenecks that have held back some 20GW of renewable energy from connecting to the national electricity network, according to Standard Bank.
Many of the renewable projects are situated in the sun-baked Northern Cape or windswept Western and Eastern Cape regions, far from existing transmission corridors linking most of South Africa to the coal-powered generation plants in the north.
Operating as a standalone entity, the credit guarantee vehicle would issue guarantees instead of South Africas treasury and would cover payment defaults, for instance, should something go awry during the roll-out.
The banks Multilateral Investment Guarantee Agency is also considering reinsurance and political risk cover.