Published on 29 Oct 2025

India and China eye South Africa’s US$25bn power grid expansion

South Africa plans to add 14,000km of power lines

An ambitious programme to build thousands of kilometres of new power lines in South Africa has caught the attention of Indian billionaire Gautam Adani and Chinese state-backed companies. They are among a slew of foreign investors who are vying for a piece of the country’s US$25bn powerline upgrade programme, which has been described as the largest infrastructure undertaking since the end of apartheid in 1994.

The government has launched the Independent Transmission Projects (ITP) programme to bring in private capital to accelerate grid expansion. The scheme aims to add 14,000km of new power lines.

The initial prequalification stage of the government’s tender process drew responses from 17 companies and consortia. Bidders include Adani Power’s Middle East unit, India’s DRA Infracon, and two Chinese state-owned firms – State Grid International Development and China Southern Power Grid International – alongside other local and international players.

Successful developers will earn regulated, long-term payments from the NTCSA for building and operating the new lines, with costs ultimately recovered through electricity tariffs. The first phase will involve a tender to construct 1,164km of transmission lines designed to integrate more than 3,000 MW of new generation capacity. Later phases will expand the rollout to more than ten times that scale.

South Africa’s power grid was built to serve a centralised system of coal-fired plants concentrated in its north-eastern provinces. As the country transitions towards cleaner energy sources such as wind, solar and gas, its transmission network has become a critical bottleneck. The best renewable resources are located in the wind-swept Eastern Cape and the sun-rich Northern Cape, far from the main demand centres in Gauteng and other industrial hubs.

For decades, Eskom, the state-owned utility, was a one-stop shop for generating, transmitting and distributing electricity. Years of underinvestment, corruption and rising debt have left the company unable to expand or maintain the grid at the pace required. South Africa currently builds about 300km of new transmission lines a year, but this would need to rise to 1,400km annually for the next decade to close the gap.

To address the issue, Eskom’s transmission division has now been unbundled into a standalone entity, the National Transmission Company of South Africa (NTCSA), which officially began operating in July 2024. The NTCSA owns and operates all the country’s power lines, maintains grid stability and plans future expansions.

South Africa’s total installed generation capacity stands at about 54,000 MW, though the amount of power actually available is far lower because of the poor performance of Eskom’s ageing coal plants. Coal remains the dominant source, providing roughly 58% of electricity.

The newly approved Integrated Resource Plan outlines the addition of about 105,000MW of new generation capacity to the grid by 2039 as part of the country’s transition to cleaner energy. The plan includes 34,000MW of onshore wind, 25,000MW of utility-scale solar and 16,000MW of distributed generation, mainly behind-the-meter solar installations. It also calls for 8,500MW of storage, mainly through battery systems, 16,000MW of gas-to-power capacity, and 5,200MW of new nuclear generation.

References

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