CFM appointed to manage USD-1.3bn Southern Africa grids fund

Blended finance fund manager Climate Fund Managers (CFM) has been appointed to manage a USD-1.3-billion (EUR 1.2bn) target financing facility aimed at improving interconnection and cross-border energy transmission in the Southern Africa region.

CFM will run the Regional Transmission Infrastructure Financing Facility (RTIFF) of the Southern African Power Pool (SAPP), a cooperation of 12 Southern African countries represented by their national power utilities and some private utilities organised through the Southern African Development Community (SADC), which groups 16 states.

Launching with USD 20 million in commitments from SAPP, RTIFF targets a first close of USD 500 million in 2025 and a final close of USD 1.3 billion within 24 months. The facility will seek to raise funds from public and private sector investors, locally and internationally, and will have a fund life of up to 20-25 years. RTIFF will give priority to projects that link presently unconnected SAPP members, alleviate congestion bottlenecks in regional electricity trading, aid inter-continental power trading via transmission corridors and support renewables adoption.

According to Stephen Dihwa, Coordination Centre Executive Director of SAPP, interconnection across SAPP via strategic transmission corridors can save the SADC region an estimated USD 37 billion-42 billion in net present value (NPV) by 2040.

“We have identified eight high-priority transmission projects for RTIFF that will bring economic benefits of USD 4.3 billion in NPV,” Dihwa added.

“The lack of investment in grid infrastructure is one of the reasons for ongoing blackouts in many parts of Southern Africa. With roughly 180 million people living in the region exposed to ongoing power disruptions, universal access to reliable electricity will improve people’s health, safety, financial inclusion, and economic activities,” commented Amit Mohan, Head of Private Credit at CFM.

(USD 1 = EUR 0.922)

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