Grid expansion and integration of renewable energies

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The FC project includes the nationwide expansion and modernization of transmission and distribution infrastructure in the South African power grid. The project is part of the comprehensive network expansion program of the electricity supplier Eskom. The FC measures focus on the part of the planned network infrastructure that is needed to integrate electricity generated from renewable energies (RE) and to strengthen the interconnected network. The financing of this infrastructure will support the South African government in implementing its strategy for expanding RE and thus in achieving its ambitious climate goals. The module objective is to contribute to a climate- and environmentally-friendly, reliable and cost-efficient electricity supply by connecting renewable energies to the South African interconnected grid. The FC project thus makes a contribution to achieving the EZ program objective, which includes the German contribution to the dissemination and use of renewable energy sources and efficiency measures. The aim is to sustainably improve the country's energy security and make economic growth climate-friendly. By reducing grid losses and connecting private renewable energy generation, the FC project enables CO2 emissions to be reduced by up to 1.83 million tonnes per year compared to the business-as-usual scenario. The direct target group of the project are the private electricity producers (Independent Power Producers, IPPs) that are currently or will be connected to the electricity grid. In addition, the country's private and commercial electricity consumers benefit from the secure, climate- and environmentally-friendly supply. The grid expansion plan (2013 to 2022) of the state-owned South African energy supplier Eskom envisages an investment requirement of around USD 15 billion. Of this, USD 3 billion alone will be spent on integrating electricity from renewable energies into the interconnected grid. The FC contribution of up to USD 100 million will finance measures needed in the short term to strengthen the grid and connect renewable energies. The borrower and project sponsor is Eskom Holdings SOC Ltd. The Republic of South Africa is providing a full state guarantee for the transaction.