The vehicle, which will be hosted by the state-owned Development Bank of Southern Africa, will target an initial capitalization of $500 million and is expected to mobilize $10 billion in investment over the next decade.
The facility “will support massive investments in transmission infrastructure,” Enoch Godongwana, South Africa’s finance minister, said in a joint statement with the World Bank on Friday. “We expect development partners to confirm their capital participation. We are targeting the CGV to be operational this year.”
Article content
Top Stories
Top Stories
Get the latest headlines, breaking news and columns.
[email protected]
Sign Up
By signing up you consent to receive the above newsletter from Postmedia Network Inc.
Interested in more newsletters? Browse here.
Article content
Growth in Africa’s largest economy has been handicapped by its inadequate infrastructure, including a limited grid that’s hindered the country from taking advantage of some of the world’s best renewable energy potential.
Article content
The fund’s creation marks a step forward in the drive to lift investment, most notably in transmission lines. These are needed to increase energy security and boost the construction of green energy plants in sunny and windy parts of the country.
Article content
President Cyril Ramaphosa said last month that a transmission company independent of state power utility Eskom Holdings SOC Ltd. will be created. Global energy companies including Engie SA, Adani Power Ltd. and China’s State Grid International Development Ltd. have expressed interest in investing.
Article content
Article content
The plan is to roll out 14,000 kilometers (8,699 miles) of new power lines at a cost of about 440 billion rand ($26.3 billion). The existing grid is strongest in the east where coal-fired power plants produce about three quarters of the country’s electricity.
Article content
The vehicle will use “market-based credit guarantees” to lessen the risk of investments and cut reliance on sovereign guarantees, the World Bank and South Africa’s National Treasury said in the statement.
Article content
The fund will also foster investment in transport and water, the DBSA said in a separate statement.
Article content
“The mechanism is designed to be sustainable and scalable, starting with transmission infrastructure and expanding to other sectors as the model proves successful,” it said.
Source: Embassy of the Republic of Türkiye in Mozambique /Press Release
