- The Southern African Power Pool (SAPP), in partnership with the Southern African Development Community (SADC), has announced the appointment of climate-centric blended finance fund manager Climate Fund Managers (CFM) to manage its Regional Transmission Infrastructure Financing Facility (RTIFF), a USD 1.3 billion target facility focused on improving strategic interconnection and cross-border energy transmission in the Southern Africa region.
Energy transmission infrastructure projects are notoriously high-risk and capital-intensive, making them challenging to fund independently through sovereign capital alone. RTIFF’s blended finance model overcomes this by utilizing public capital to balance risk and enable private capital to enter. The facility will improve energy transmission within and between the 16 SADC member states and with other power pools, generating long-term energy supply security, economic growth, and climate resilience through the inclusion of sustainable energy sources.
The facility, which launches with USD 20 million in commitments from SAPP, targets a first close of USD 500 million in 2025 to be raised from public and private sector investors locally and internationally and a final close of USD 1.3 billion within 24 months. The facility will have a fund life of up to 20-25 years.
RTIFF will prioritize projects that focus on connecting currently unconnected SAPP members, help relieve congestion bottlenecks to regional electricity trading, promote inter-continental power trading through transmission corridors, and support the adoption of new generation renewable energy space in the region.
SAPP is a cooperation of 12 Southern African countries represented by their national power utilities and some private utilities under the auspices of the SADC. SAPP members Angola, Botswana, Democratic Republic of the Congo, Eswatini, Lesotho, Mozambique, Malawi, Namibia, South Africa, Tanzania, Zambia, and Zimbabwe have created a common power grid between their countries. The SAPP operates a competitive electricity market in the SADC region. RTIFF will provide power companies and project developers working to tackle transmission issues with access to patient capital and development expertise to establish strategic interconnections that allow for increased electricity trade.
RTIFF’s fund architecture will follow the structure of CFM’s flagship emerging market blended finance facilities Climate Investor One, focused on renewable energy generation and transmission, and Climate Investor Two, focused on water, sanitation, and ocean infrastructure. It will comprise a USD 100 million target “Development Fund” to provide concessional capital and development expertise including support on viability studies, legal and financial structuring, planning and ESG compliance and a USD 1.2 billion target “Construction Fund” that will make direct investments through the provision of construction finance and value-add expertise for project builds.
Author: Bryan Groenendaal
