South Africa’s pension funds collectively manage approximately R5.8 trillion in assets, representing one of the largest domestic pools of long term capital available for infrastructure investment. Trustees carry a dual responsibility: to deliver secure, long term returns for members and to allocate capital in ways that contribute to the country’s sustainable growth.
The Independent Transmission Projects Procurement Programme (ITPPP) offers trustees a rare alignment of those responsibilities. For the first time, transmission – the backbone of the electricity system – is being opened to private capital through a carefully structured public–private partnership model. This shift creates a regulated asset class that combines stable, inflation linked cash flows with measurable development impact.
For decades, Eskom alone owned and operated South Africa’s grid. Pension funds could invest in renewable generation through the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP), but transmission lines – the arteries of the system – remained out of reach. The ITPPP marks the first real opportunity for trustees to invest directly in this essential infrastructure.
A proven model, evolved
The ITPPP is not a complete experiment. Its design draws directly on the proven success of the REIPPPP, which since 2011 has:
- Mobilised more than R200 billion in private investment,
- Delivered over 6 GW of renewable capacity, and
- Established a transparent, competitive procurement framework that has consistently attracted global and local investors.
That programme demonstrated that well-structured partnerships between government, private sector and institutional investors can deliver financial stability and social impact. The ITPPP extends this framework from generation to transmission, where bottlenecks are now the binding constraint on South Africa’s energy future.
The programme will also serve as the delivery vehicle for the National Transmission Company South Africa’s Transmission development plan. This requires approximately 14,000 km of new transmission lines and 132,000 MVA of transformer capacity. When implemented, the plan could expand electricity access to nearly 97% of households, connecting around 1.6 million families and improving both affordability and reliability of supply.
Beyond household connections, the expanded grid will unlock stalled renewable projects, mobilise billions in new investment and strengthen South Africa’s economic competitiveness.
The first Request for Qualifications was released on 30 July 2025, launching a two-phase process. Consortia must meet rigorous legal, financial, and technical thresholds, including at least 49% South African Entity Shareholding (SAEP), before advancing to the Request for Proposals stage, expected in Q1 2026.
The opportunity for pension funds
Transmission infrastructure offers two categories of benefit to pension funds:
1. Financial returns
- Predictable, contracted revenues underpinned by regulatory oversight, driving capital preservation.
- Inflation-linked returns that match long-dated pension liabilities.
- Diversification away from listed equities, bonds and other traditional asset classes.
2. Developmental impact
- Expansion of the grid to nearly universal access, with 1.6 million additional households connected.
- Thousands of jobs created in construction, operations and maintenance.
- Structured local ownership requirements ensuring that South African capital pools and communities benefit directly.
- Greater energy access will support industrialisation and the development of new industries, including green hydrogen, data centres and electric vehicle manufacturing.
- Positions South Africa as investable in a global capital market increasingly shaped by environmental, social, and governance (ESG) considerations.
Managing risks with discipline
Trustees are right to ask the hard questions:
- Will procurement and construction timelines be met?
- Will competitive pricing from Development Finance Institutions (DFIs) potentially crowd out local pension funds, private debt and equity financiers’ participation?
- Are bankability issues, such as revenue model uncertainty, absence of direct sovereign guarantees, grid access rules, and many others going to be adequately addressed?
- Are liquidity risks appropriately matched to fund liability profiles?
These risks are real, but they are not reasons for inaction. Expected participation by DFIs, local financiers and institutional asset managers – combined with stringent qualification criteria and the governance framework of the National Transmission Company South Africa – are designed to mitigate them. The precedent of the REIPPPP also provides evidence that transparent procurement can attract credible players and deliver bankable projects.
Transmission lines may not capture headlines like wind farms or solar plants, but they are the hidden infrastructure that makes the energy transition possible. For trustees, the ITPPP is not just an investment opportunity – it is a fiduciary responsibility.