The Independent Power Producer Office will release the first request for information (RFI) under the Independent Transmission Programme (ITP) in July. The RFI, focusing on a multi-line transmission package, will be followed by a request for proposals in November.
Finance Minister Enoch Godongwana announced this in his 2025 budget speech to Parliament in Cape Town on Wednesday, March 12.
Advancing public-private partnerships
The initiative paves the way for private-sector involvement in expanding the transmission network, Godongwana said. He reaffirmed government’s commitment to reforms to facilitate greater private-sector participation, capital budgeting reform and alternative infrastructure financing to accelerate infrastructure delivery.
The revised public-private sector (PPP) regulations, set to take effect on June 1 this year, are expected to simplify procedures, enhance capacity for managing such partnerships, establish clear guidelines for managing unsolicited bids and strengthen fiscal risk governance.
The regulations will also enable national departments to establish sector-specific PPP units. “These units will drive private-sector participation, creating opportunities to optimise the balance sheets of financially distressed state-owned companies,” Godongwana said.
R219 billion earmarked for energy infrastructure
“Allocations towards capital payments are the fastest growth area of spending by economic classification,” Godongwana said, adding that public infrastructure spending will exceed R1 trillion over the next three years. Of this, R219,2 billion is earmarked for energy infrastructure.
The Budget Facility for Infrastructure has also been restructured to run multiple bid windows instead of one annual window. “Earlier this week, we published a call for proposals under the new system. The first window, now open, will close mid-April. The next window will open soon thereafter,” he said.
Financing decisions to determine the appropriate fiscal mechanism to support projects have also been decoupled from evaluation and budget processes to attract private finance and improve allocative efficiency in fiscal support.
To further leverage infrastructure investments, a credit guarantee vehicle to derisk projects and attract private capital will be introduced in 2026. “Its initial focus will be on independent transmission to bridge the energy transmission deficit. Once proven effective, it will be expanded to other sectors,” Godongwana said.
To diversify infrastructure funding sources, government will issue its first infrastructure bond in the 2025/26 financial year alongside other innovative financing instruments. “Financial institutions, including pension funds, banks, development banks and international financial institutions, have already expressed interest in participating,” he said.
Eskom debt relief package
Turning to fiscal matters, Godongwana said government debt is projected to stabilise at 76,2% of GDP in the 2025/26 financial year with the consolidated budget deficit narrowing to 3,5% by 2027/28. Debt service costs for the current financial year will amount to R389,6 billion. “Government’s fiscal approach has successfully stabilised debt service costs as a percentage of revenue in the 2024/25 financial year by maintaining a primary budget surplus,” he said.
The Eskom debt relief initiative had contributed to fiscal improvements, Godongwana said. “Eskom is now in a stronger financial position than in 2023 when debt relief arrangements were originally announced.” As a result, National Treasury has opted to simplify the final phase of Eskom’s debt relief package. The last R70 billion debt takeover has been revised to R40 billion in the 2025/26 financial year and a R10 billion takeover in the 2028/29 financial year, resulting in government saving about R20 billion.
Structural reforms and Operation Vulindlela
Through Operation Vulindlela, a joint initiative between Treasury and the Presidency launched in 2020, government is expediting structural reforms. One of the objectives is to stabilise electricity supply.
“Since its inception, Operation Vulindlela has made real progress in achieving its objectives. Energy-sector reforms facilitated a project pipeline of 22 500 MW with more than 10 000 MW already registered with the National Energy Regulator of South Africa – one of the final regulatory steps. These projects will be instrumental in alleviating power shortages,” he said. The second phase of Operation Vulindlela is expected to advance energy-sector reforms and strengthen local government.
