South Africa Seeks R440 Billion Investment to Expand Power Grid

Ramokgopa urged financial stakeholders to devise cost-effective borrowing solutions for Africa’s energy development, climate resilience, and clean energy transition.

South Africa requires over R440 billion in the next decade to upgrade and expand its transmission infrastructure, according to Minister of Electricity and Energy, Dr. Kgosientsho Ramokgopa. Speaking at the Africa Energy Indaba in Cape Town, the Minister outlined the country’s urgent need to modernize and extend the grid by 14,000 kilometers, emphasizing the necessity of innovative financing mechanisms beyond the government’s budget and Eskom’s constrained balance sheet.

Financing the Future of Energy

Ramokgopa urged financial stakeholders to devise cost-effective borrowing solutions for Africa’s energy development, climate resilience, and clean energy transition. He projected that electricity trade volumes in Africa would increase by 300% by 2040, coinciding with a population surge from 1.5 billion to 2 billion people. To support this transformation, Africa will require an estimated R2.6 trillion in energy sector investments by 2040, a financial challenge that cannot be met through domestic resources alone.

“This is why we must design bespoke financing instruments to achieve our ambitions,” the Minister stated.

Towards a Unified African Power Market

Highlighting the African Union's Agenda 2063, Ramokgopa expressed strong support for a single electricity market across the continent. He stressed that universal energy access by 2063 is attainable through regional integration and substantial investment in interconnectivity.

“With adequate investment in interconnectivity, we can make a continental electricity market a reality,” he said.

South Africa’s Role in the G20 Energy Agenda

As South Africa assumes the G20 Presidency—the first for an African nation—Ramokgopa outlined key energy priorities, including:

• Strengthening energy security and ensuring affordable access.
• Achieving a just, affordable, and inclusive energy transition.
• Enhancing African connectivity and energy pooling.

These priorities align with the African Union’s advocacy for a sustainable and equitable energy framework. The Minister noted that 43% of Africa’s population still lacks electricity, emphasizing that access must be prioritized before focusing on energy transitions.

“We must ensure that all people have access to electricity, regardless of the fuel source, while also fulfilling our commitments to reduce greenhouse gas emissions. Even though Africa contributes less than 2.5% of global CO2 emissions, gas will remain part of the continent’s energy mix in the foreseeable future,” Ramokgopa stated.

The Just Transition Strategy

The South African government will use its G20 Presidency to advocate for a flexible and context-driven energy transition model. Ramokgopa emphasized that the transition must consider each country’s unique economic and developmental realities.

“There is no one-size-fits-all transition. The scale and pace of each country's transition must align with its specific circumstances and financial capacity,” he explained.

The Integrated Resource Plan (IRP), which will soon be released to the public, will provide further clarity on South Africa’s energy transition strategy. The government is also engaging with the National Economic Development and Labour Council (Nedlac) to refine its approach to balancing sustainability with economic growth.

G20 Presidency and Global Policy Influence

South Africa’s G20 Presidency, which began on December 1, 2024, is themed “Solidarity, Equality, Sustainability.” The year-long discussions will culminate in the G20 Leaders’ Summit in November 2025. The G20, comprising 19 countries along with the European Union and the African Union, represents 85% of global GDP and 75% of international trade. South Africa’s leadership in this global forum provides a crucial opportunity to advocate for Africa’s energy and economic priorities.

With the world’s attention on sustainable energy solutions, South Africa is positioning itself as a leader in the global transition towards a more resilient and interconnected energy future.