RETRADE-SA MPA Phase 2: Technical Assistance to the Southern African Power Pool

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Access to affordable, reliable, and clean energy is a critical enabler of sustainable and inclusive development. However, persistent global geopolitical shocks and inflationary pressures have continued to impede progress toward achieving Sustainable Development Goal 7 (SDG7). These challenges are particularly pronounced in Africa, where many countries face difficulties in ensuring reliable electricity services and expanding access to modern energy.RETRADE SAPP (P512662)—the second phase of the Regional Energy Transmission, Trade and Decarbonization Project in Southern Africa (RETRADE-SA) Multi-phase Programmatic Approach (MPA) program—aims to address these challenges by providing long-term technical assistance to the Southern African Power Pool (SAPP). It builds on the achievements of the SAPP-AREP program (P126661), through which the World Bank supported SAPP and its member utilities in preparing regional energy infrastructure and improving the enabling environment for cross-border electricity trade. Implemented by the SAPP Coordination Centre (SAPP CC) through its Project Advisory Unit (PAU), the Project will support SAPP in strengthening institutional and member country capacities to prepare regional energy projects and enhance regional electricity trade. It will also collaborate closely with the Southern African Development Community (SADC) Secretariat, the Regional Electricity Regulators Association of Southern Africa (RERA), and the SADC Centre for Renewable Energy and Energy Efficiency (SACREEE).The total estimated cost of the Project is US$38 million. The Project is structured around three components: 1) Support to the SAPP Coordination Centre and Regional Energy Institutions; 2) Regional Project Preparation and Implementation; and 3) Strengthening the Enabling Environment for Regional Energy Integration. Component 1 directly supports regional institutions, including the PAU, by equipping them with technical expertise, laying the foundation for the implementation of Components 2 and 3. Component 2 contributes to Program Area 1 of the RETRADE-SA MPA program (Strengthening Regional Infrastructure Connectivity) by supporting upstream preparation and mobilization of financing for regional energy projects, while Component 3 aligns with Program Area 2 of the MPA program (Support to Regional Soft Infrastructure Interventions).Component 1: Support to the SAPP Coordination Centre and Regional Energy Institutions. This component will finance (1) the SAPP CC to support the operation of the PAU, and (2) the deployment of experts to regional energy institutions.> Sub-component 1.1: Support to the SAPP CC, including PAU. PAU's mandate includes supporting early-stage projects through the conduct or facilitation of studies and preparatory activities—covering technical, economic, financial, environmental, social, and legal aspects. For more advanced projects, the PAU provides assistance in finalizing outstanding studies, completing negotiations, and packaging projects for financing to ensure bankability. Reporting directly to SAPP CC, the PAU comprises a team of senior and mid-career consultants with expertise across all key areas required for the preparation of complex energy projects. This sub-component will cover PAU’s consultant fees, travel costs, and other eligible operational expenditures.> Sub-component 1.2: Support to Regional Energy Institutions. While SAPP plays a central role in facilitating regional electricity trade, its efforts must be complemented by other regional energy institutions to enable substantial and sustainable growth. Hence, this sub-component will finance the engagement of experts to strengthen the capacity of key SADC institutions: SADC Secretariat—responsible for strategic planning and coordination of SADC programs, RERA—which promotes regulatory harmonization), and SACREEE—which advances renewable energy and energy efficiency to enhance access and security). These experts will provide targeted technical support to enhance regional coordination in the energy sector.Component 2: Regional Project Preparation and Implementation. This component will support SAPP in advancing the preparation and progressing toward the implementation of regional energy projects that are critical to enabling greater regional electricity trade. It will finance (1) preparatory activities for regional energy infrastructure projects, and (2) efforts to mobilize private sector participation, including operationalization of the Regional Transmission Infrastructure Financing Facility (RTIFF). > Sub-component 2.1: Project Preparation Funds. Funding will support a range of project preparation activities for regional energy infrastructure. These include technical, economic, and financial feasibility studies; environmental and social assessments; legal documentation; preparation of procurement packages, and financial transaction advisory services, particularly in support of power purchase agreement (PPA) negotiations. It also supports stakeholder engagement activities, such as consultations, roadshows, and promotional events. No funds will be used to finance civil works.> Sub-component 2.2: Private Sector Mobilization. To address financing gap, and in light of constrained public resources, this sub-component will support efforts to mobilize private sector investment in regional transmission infrastructure. Specifically, it will assist SAPP in operationalizing the RTIFF, a blended finance platform designed to leverage public capital to mitigate risk and attract private investment in regional transmission infrastructure. This sub-component will finance activities directly related to SAPP’s role in RTIFF’s operationalization but will not fund any activities carried out by consultants appointed independently of this Project. To further address the gap between feasibility and bankability, the sub-component will finance the hiring of a consulting firm to assist PAU in leading the financial structuring of regional energy projects. Finally, the sub-component will support SAPP in assisting member countries to address legal and regulatory bottlenecks and create enabling environments for private sector participation in the transmission sector at the national level.Component 3: Strengthening the Enabling Environment for Regional Energy Integration. This component will finance activities identified by SAPP as essential for advancing regional energy project development and strengthening cross-border power trade, ensuring that regional energy projects are grounded in (1) robust market frameworks, (2) supportive sector foundations, and (3) effective regional coordination—within the SADC region and with EAPP.> Sub-component 3.1: Regional Electricity Market Development. To enhance regional power trade, support is needed both to broaden participation in existing market products and to introduce new ones. Market design, operationalization support, and institutional capacity building will be undertaken for three proposed new market segments: electricity financial instruments, ancillary services, and green energy trading. Furthermore, with the commissioning of the Zambia–Tanzania interconnector, SAPP and EAPP will be physically interconnected. Accordingly, the sub-component will support the development of tools for market coupling between SAPP and EAPP, enabling synchronized power exchange. Targeted training will also be provided to strengthen SAPP’s market monitoring and surveillance functions, which are essential for maintaining transparency and integrity. In addition, capacity building will be extended to (potential) market participants to help them understand and utilize market instruments, ensuring institutional readiness as market structures evolve.> Sub-component 3.2: Energy Sector Planning, Strategic Frameworks, and Technical Tools. Achieving the objective of increasing and expanding the regional electricity market requires robust upstream support for energy sector plannin