SOUTH AFRICA – Southern African Power Pool (SAPP) has chosen Climate Fund Managers (CFM) to oversee Southern African Development Community (SADC) US$1.3 billion transmission infrastructure initiative.
This initiative is aimed at enhancing strategic interconnection and cross-border energy transmission across the Southern Africa region.
Transmission infrastructure projects in the energy sector are notoriously high-risk and capital-intensive, posing challenges for funding through sovereign capital alone.
The RTIFF’s blended finance model aims to address this by leveraging public capital to mitigate risk and attract private investment.
The facility’s objective is to enhance energy transmission both within and between the 16 SADC member states, as well as with other power pools.
Through RTIFF, SADC aims to achieve long-term energy security, economic growth, and climate resilience by integrating sustainable energy sources.
Victor Mapani, Chairperson of the SAPP Executive Committee, emphasized the significance of RTIFF in overcoming the primary barrier facing energy transmission infrastructure developers: access to capital.
He highlighted how RTIFF facilitates collaboration between the private sector and public sector utilities to deploy new transmission lines at scale.
CFM, renowned for its expertise in the African energy sector, has been entrusted with establishing and managing this innovative facility.
This appointment underscores CFM’s capability to support member states in securing a sustainable and resilient energy supply.
The RTIFF, initially seeded with USD 20 million commitments from SAPP, aims for a first close of US$500 million by 2025, sourced from both public and private sector investors locally and internationally.
The ultimate goal is to achieve a final close of US$1.3 billion within 24 months, with a fund life of up to 20-25 years.
Engineer Stephen Dihwa, Coordination Centre Executive Director of SAPP, highlighted the potential economic benefits of RTIFF, estimating substantial savings and identifying priority transmission projects that promise significant economic returns.
RTIFF will prioritize projects focusing on connecting unconnected SAPP members, alleviating congestion bottlenecks, promoting inter-continental power trading, and facilitating the adoption of renewable energy resources.
Amit Mohan, Head of Private Credit at CFM, emphasized the urgency of investing in grid infrastructure to address ongoing power disruptions affecting millions in the region.
He stressed the importance of universal access to reliable electricity for improving health, safety, financial inclusion, and economic activities, particularly in the context of the energy transition towards green electrons.
CFM expressed pride in its association with SAPP and its role in managing RTIFF, recognizing the critical need to mobilize blended finance to accelerate grid infrastructure development in the region.
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