Building on global best practices

When looking at how to approach the ITP from a lending perspective, Leitich said that the Build-Operate-Transfer (BOT) and Build-Own-Operate-Transfer (BOOT) frameworks, which have been successful in Brazil and Peru, could work in South Africa if they are adapted to meet the country’s needs.

“Both structures could work, depending on whether the risks, like the tariff revenue structure, are addressed in both of them. We’d also need to look at what the CGV looks like, as well as the risk allocation and transmission service agreement.”

Lena Mangondo - Head of Legal Department at the Independent Power Producer Procurement Programme Office - also emphasised the need to adapt these frameworks to a South African Context. “One thing we’ve learned is you can’t take what’s happened elsewhere in the world and adopt a cookie-cutter approach. It doesn’t work,” Mangondo said.

“When we started the REIPPPP, there was a ‘refit’ that was the buzzword globally at that point. We really took time to understand REIPPPP and what the challenges and opportunities were. We then looked at how we could design a program that was specific to South Africa, that took into account our own South African context and that we could achieve tangible outcomes. That is again the approach we’re taking with the ITP process.”

Challenges and the path forward

Despite the promising framework, significant challenges remain. These include securing rights of way for transmission routes, addressing supply chain bottlenecks for critical components, and ensuring appropriate tariff structures that balance investor returns with affordability for consumers. Ensuring a robust pipeline of projects will also be a crucial hurdle that will need to be overcome.

“We need a robust pipeline of projects that go beyond phase one. What you don’t want to do is implement phase one of the programme, and then have a start and stop. It needs to be a continuous programme that is sustainable, and then you can have economies of scale in the market and adopt a programmatic approach,” said Mpho Mokwele, Group Executive Transacting at the Development Bank of Southern Africa.

Shaakira Karolia - Adviser to the Ministry of Electricity & Energy said that accountability and transparency would play a big role in ensuring the success of the ITP.

“Transparency, credibility and predictability will play a critical role in ensuring the programme works. That’s very important. So is giving the market confidence in the program going forward and ensuring the requisite evolution of our regulatory framework. I mentioned Brazil as an example, and how they evolved over 10 years or more. So it’s important that, as we roll out this program that we also consider those lessons,” she said.

With the public consultation period now closed, the Department of Electricity and Energy has begun reviewing all the submissions received with a Pre-Qualification Tender (RFQ) expected by the end of July 2025.

Leitich said that it was important for those looking to get involved in the project to go through all the ITP documents and ask for support early.

“Start looking at the documents early and start having conversations to address any concerns that they might have, so that they are dealt with and their needs are met for them to participate in the programme,” she said.