The National Transmission Company South Africa (NTCSA) and the Industrial Development Corporation (IDC) have signed a memorandum of understanding aimed at unlocking industrial financing to NTCSA-verified suppliers and contractors involved in the expansion of South Africa’s electricity transmission network.

In a joint statement, the two State-owned entities indicated that they would seek to use the funding to stimulate supplier development, localisation and industrialisation, with a particular focus on commodities such as transformers, insulators, hardware, transmission steel, conductors, and broader grid infrastructure construction.

“Through this partnership, the NTCSA will increase supplier development, localisation and demand visibility, while the IDC will, subject to its governance and due diligence processes, consider appropriate funding support for qualifying suppliers, including working capital and capital investment to expand production capacity,” the statement reads.

The Transmission Development Plan (TDP) envisages the construction of 14 500 km of new powerlines and 133 000 MVA of additional transformers by 2034 at a cost of about R440-billion.

The roll-out will unlock some 37 GW of generation capacity, including in provinces where the grid is a constraint to the integration of new wind and solar capacity, such as the Eastern, Northern and Western Cape.

The expansion will be implemented by the NTCSA itself, as well as private Independent Transmission Projects, or ITPs.

The pace of the TDP roll-out has been heavily criticised by private generators aiming to connect their projects to the grid, with the NTCSA confirming recently that only 270.8 km of transmission lines were constructed in its 2025/26 financial year against a target of 423 km.

It attributed the deficit largely to contractor financial constraints and underperformance on several projects.

Broader efforts to facilitate localisation, industrialisation and supplier development have also been criticised by domestic manufacturers and contractors, which believe bidding requirements have been tailored for international suppliers, especially those linked to the initial ITP procurement round.

The NTCSA has stated that a “step-change” in industry capacity is needed to deliver at the required yearly build-out rate, which is expected to peak at 2 183 km in the latter part of the TDP deployment period so as to offset the slow pace of construction in the early years of implementation.

The target for the current financial year is to construct 550 km of transmission lines and commission 7 000 MVA of transformer capacity, and the NTCSA has initiated an incubator programme to support the emergence of entities able to construct new lines and has also pre-qualified transformer and steel suppliers.

However, it has also warned of several capacity gaps, highlighting in particular steel fabrication pressures, a lack of manufacturing capacity to produce large transformers, and limited contractor capacity.

NTCSA CEO Monde Bala said the TDP would create substantial demand for manufactured inputs and components, and argued that the scale of the expansion required a strong, reliable local supply base.

“This agreement is designed to support verified suppliers identified by the NTCSA through its procurement processes and equip them with the technical expertise and potential financial backing from the IDC to build sustainable capacity for delivering on the TDP projects.

“It will also strengthen supplier development, localisation and industrialisation,” Bala added.

IDC CEO Mmakgoshi Lekhethe said the development financier stood ready to fund viable entities selected to be part of the grid network expansion programme over the coming 72 months.

Implementation would be driven through a joint steering committee to fast‑track agreed workstreams, track progress and address constraints.

“Further details on funding opportunities, including qualifying criteria and access processes, will be communicated as these are finalised in line with each organisation’s governance and mandate,” the joint statement added.