The African Development Bank (AfDB) has approved $503.75 million in financing for South Africa’s Infrastructure Governance Reform Program, aimed at accelerating private sector investment in critical infrastructure, particularly electricity transmission and freight rail.
The funding, coordinated by South Africa’s National Treasury in collaboration with development partners, is expected to strengthen infrastructure governance, improve market competition and create opportunities for private investors to participate in the country’s electricity and transport sectors. In the power sector, the programme supports ongoing reforms designed to open South Africa’s electricity market to competition and reduce Eskom’s dominance as the country’s primary electricity buyer and supplier. A key development is the establishment of a licensed market operator within the National Transmission Company South Africa (NTCSA), following approval by the National Energy Regulator of South Africa (NERSA).
The new market structure will introduce greater transparency and competition in electricity trading, supported by a Market Surveillance and Competition Unit responsible for monitoring market activities. The reforms will also introduce grid capacity allocation rules to guide how independent power producers and other generators access the national transmission network.
READ: JA Solar secures exclusive module supply deal for 120MW solar project
Energy goal
South Africa is targeting a 10% share of electricity transactions through wholesale market trading by December 2027, marking an important step towards establishing a more competitive electricity industry and attracting additional investment in power generation and transmission infrastructure. Beyond electricity, the programme extends to freight rail and port infrastructure, where the government is pursuing greater private sector participation to improve operational efficiency and expand logistics capacity.
In the rail sector, Transnet Rail Infrastructure Manager oversees access to 21,232 kilometres of railway infrastructure, including the allocation of train paths to private operators. In August 2025, the company awarded at least 11 train slots across six corridors, allowing private freight operators to access parts of the national rail network.
The reforms also cover the Port of Durban, where a 25-year concession agreement for the Durban Container Terminal Pier 2 was signed with International Container Terminal Services in December 2025. The terminal handles approximately 46% of South Africa’s container traffic, making it a strategic component of the country’s international trade and logistics network. The latest financing builds on AfDB’s previous support for South Africa’s infrastructure and economic reforms. The Bank provided $300 million in 2023 through its Energy Governance and Climate Resilience Support Program, which supported Eskom’s financial stabilisation and the establishment of NTCSA.
A further $475 million was approved in 2025 under the Infrastructure Governance and Green Growth Program. With the latest commitment, AfDB’s financial support for South Africa’s reform agenda since 2023 has exceeded $1.2 billion. The financing underscores the Bank’s continued support for infrastructure restructuring, improved electricity market competitiveness and increased private sector investment across South Africa’s strategic economic sectors.
