- The Regional Transmission Infrastructure Financing Facility will start with $20m in commitments from the Southern African Power Pool.
- Estimates show that the Angola-Namibia interconnector will cost $356 million.
The Southern African Power Pool (SAPP) and investment advisers Climate Fund Managers have launched a new $1.3 billion target fund to build high-voltage transmission lines linking countries in the region.
SAPP will start the Regional Transmission Infrastructure Financing Facility (RTIFF) with a $20 million commitment. It aims for a first close of $500 million in 2025 to overcome a key obstacle constraining growth in an evolving energy sector.
A joint statement revealed that they will raise finance from public and private sector investors locally and internationally.
Despite abundant energy sources in Africa, a lack of connections between countries has hampered integration and trade among SAPP’s 12 members, including regional economic heavyweight South Africa and top copper exporter Zambia.
In a statement, the chairperson of the SAPP executive committee, Victor Mapani, said RTIFF dismantles this by enabling the private sector to work alongside public sector utilities to roll out new transmission lines at scale.
Furthermore, SAPP expects the facility, with a fund life of between 20 and 25 years, to reach a final close of $1.3 billion within two years. A renewable energy push, including wind, solar and hydro, has highlighted the shortage of connections across the region where projects, often in remote areas, are unable to connect to national grids.
SAPP aims to connect Angola, Malawi and Tanzania to the platform, a competitive electricity market with daily trades and has identified eight priority transmission projects.
“Since Malawi is already being connected to Mozambique and Tanzania is being connected to Zambia, the next key project is the connection of Angola to Namibia,” the executive director of SAPP, Stephen Dihwa, told Reuters.
He added that estimates show that the Angola-Namibia interconnector will cost $356 million. This is about a tenth of the total investment for transmission lines by 2040 to enhance regional integration.
South Africa’s debt-ridden power utility Eskom, which requires around 350 billion rand ($18.41 billion) over the next decade to upgrade its transmission network, is wooing the private sector for investment to overcome the country’s worst electricity shortages.