Electricity Transmission Infrastructure Regulations Now In Effect In South Africa: What's New And What's Next

On Friday, 31 October 2025, the Minister of Electricity and Energy ("the Minister") published the finalised Electricity Transmission Infrastructure Regulations ("Regulations") under the powers vested in him by section 35(4) of the Electricity Regulation Act, 2006 ("the Act"). The Regulations came into effect on the same date.

These Regulations follow the draft Regulations that were published for public comment nearly seven months earlier, on 3 April 2025 ("draft Regulations"). (Our blog on the draft Regulations is available here.)

As discussed below, the Minister and his team acknowledged several of the concerns raised by stakeholders during the notice-and-comment period. As a result, the Regulations differ materially from the draft Regulations.

The Regulations, together with the mechanisms they prescribe, are set out below.

Regulation 2 – Who the Regulations applies to:

Regulation 2 sets out the specific role players to whom the Regulations apply. These include buyers, users, procurers, transmission service providers, the Minister, the Minister of Finance, the Department of Electricity and Energy, and the National Energy Regulator ("NERSA").

Importantly, Regulation 2 also clarifies that the Regulations do not apply to circumstances outside the scope of a determination. Key examples here are the establishment of new electricity transmission infrastructure, the procurement of transmission capacity by the TSO SOC, or the performance of the TSO SOC's functions under section 34B of the Act.

This marks a clear departure from the draft Regulations, which had proposed a much broader application. Under the draft, the Regulations would have extended to determinations and related matters such as implementation, consultation requirements, and the procurement of transmission capacity from transmission service providers.

Objectives of the Regulations

The objectives introduced in the draft Regulations remain unchanged. Regulation 3 confirms that the purpose of the Regulations is to:

• Expeditethe establishment of new electricity transmission infrastructure involving private parties;
• Enhancethe reliability and security of the national transmission power system;
• Facilitatethe connection of electricity generation into the transmission power system; and
• Ensureconsistency and predictability in the implementation of section 34(1)(b) of the Act, which governs the Minister's authority to publish determinations for the procurement of transmission infrastructure.

Deviations from the IRP or TDP

Section 34(1)(b) of the Act empowers the Minister to make determinations on new electricity transmission infrastructure. Ordinarily, the Minister must do so in line with the framework established by the Integrated Resource Plan ("IRP") or the Transmission Development Plan ("TDP").

Regulation 4 introduces an exception to this rule. Under this provision, the Minister may deviate from these policies where such deviation is necessitated by an "emergency" or "the national interest." Even in these circumstances, the Minister remains subject to section 34(8) of the Act and must follow the prescribed notice-and-comment procedure.

Importantly, a determination made under the Regulations that relates to transmission capacity identified in the TDP will be regarded as consistent with the TDP, even if it shortens the anticipated timeframe for establishing that capacity.

The revisions to draft Regulation 4 bring the published provision into closer alignment with the wording of sections 34(6) and 34(7) of the Act.

Consultation Procedure

Regulation 5 outlines the information that the Minister must provide to NERSA and the Minister of Finance as part of the mandatory consultation process preceding a determination. The prescribed information includes:

• The terms of the proposed determination;
• Any feasibility study conducted under Regulation 7;
• Any other activity the Minister intends to undertake to give effect to the determination;
• Reasons for any deviation from the IRP or TDP (if applicable);
• The proposed date for publication of the determination; and
• An indicative timeframe for establishing the selected transmission capacity (where possible).

Once this information has been received, NERSA and the Minister of Finance have 30 days to submit written comments to the Minister (unless otherwise agreed). The Minister must then consider these comments and finalise the determination as soon as reasonably possible.

Determinations

Regulation 6 sets out the requirements for determinations made by the Minister under section 34(3) of the Act. These requirements include specifying the transmission capacity needed, as well as identifying the buyers, users, and procurers (where applicable) for that capacity. The Minister must also outline the responsibilities of the procurer, which cover the preparation, management, and implementation of procurement activities, including the negotiation of transmission service agreements.

The Regulations further provide that a determination is binding on the identified buyers, users, and procurers. They are obliged to comply with its terms and take all necessary steps to implement it without delay. In addition, buyers and users are bound by the outcome of the procurement process conducted in accordance with a determination. This includes the obligation to conclude transmission service agreements with the appointed transmission service provider.

The final Regulations refer only to determinations made under section 34(3). Provisions relating to determinations under section 34(4) have been incorporated into Regulation 5(1)(a).

It is worth noting that the draft Regulations proposed to empower the Minister to amend or revoke a determination at any time, subject to compliance with Regulation 5 and the vested rights of third parties. This provision has been removed from the final Regulations.

Feasibility Studies

Regulation 7 sets out who may conduct feasibility studies and how these studies must be carried out. The Minister may designate an official or unit from the Department of Electricity and Energy, or appoint a service provider, to conduct a feasibility study on the rationale for a proposed determination relating to transmission capacity. A procurer may also conduct such a study itself or appoint a service provider to do so in respect of transmission capacity that is the subject of a determination.

Feasibility studies may address one or more of the elements listed in Regulation 7(3), including:

• The technical and market requirements of the transmission capacity.
• The anticipated costs of the transmission capacity.
• The proposed allocation of key risks between the prospective buyer, user, and transmission service provider.
• The legal, financial, environmental, and land-use considerations, including the permits, consents, or authorisations required to establish the transmission capacity.

It is worth noting that under the draft Regulations, Regulation 7 included a provision requiring the Minister and the procurer to have regard to any relevant feasibility study undertaken pursuant to Regulation 7 when making or implementing a determination. This requirement is notably absent from the final Regulations. While Regulation 5(1)(a)(i) partially addresses the issue—by requiring the Minister to submit any feasibility study to NERSA and the Minister of Finance during the consultation process before making a determination—there is no longer any provision obliging the Minister or the procurer to consider feasibility studies when implementing a determination.

Cross-Border Transmission Capacity

Regulation 8 provides for the establishment of cross-border transmission capacity pursuant to a determination, provided that the Minister is satisfied that adequate agreements, memoranda of understanding, or other arrangements are—or will be—in place between the Government and the relevant foreign government, utility, or international organisation. These arrangements must be sufficient to enable the establishment of such transmission capacity.

Compared to the draft Regulation 8, the final Regulations introduce an additional sub-regulation requiring the Minister to take into account applicable regional electricity frameworks when making a determination to establish cross-border transmission capacity.

Transmission Services Agreements

Regulation 9 sets out the minimum content requirements and obligations for transmission services agreements. Before a buyer enters into such an agreement, the procurer must ensure that it:

• Delivers a net benefit to the buyer and user, or to the Government.
• Transfers appropriate technical, operational, and financial risks to the transmission service provider.
• Includes effective mechanisms for implementation, management, enforcement, and monitoring.
• Provides for adequate due diligence by the buyer or user regarding the transmission service provider's competence and capacity to meet its obligations.

In addition, buyers are required to cooperate in good faith with the procurer and transmission service providers. This cooperation must ensure that the respective rights and obligations of the buyer, the user (where applicable), and the transmission service provider are comprehensively addressed in the agreement, in a way that "maximises coordination and efficacy in the national interest."

Energy Infrastructure Projects

Draft Regulation 9, which set out requirements for determinations relating to "energy infrastructure projects" that combine new generation capacity, electricity transmission infrastructure, and other interconnected infrastructure as contemplated in section 34(12) of the Act, has been deleted in its entirety.

These provisions have not been incorporated elsewhere into the final Regulations, thereby removing the additional obligations on the Minister that had been proposed in the draft.

Cost Recovery

Regulation 10 sets out the cost recovery factors that NERSA must consider when determining licence conditions relating to prices, charges, rates, and transmission tariffs. NERSA must ensure that the buyer is able to recover, at a minimum, the full amount of costs incurred in the following categories:

• Development and preparation costs related to transmission capacity that is the subject of a determination.
• Annuity payments or other compensation paid by the buyer under a transmission services agreement.
• Reimbursement to the transmission service provider for costs incurred in acquiring servitudes and similar rights.
• Any other payments made by the buyer under a transmission services agreement, provided the buyer or user acted in accordance with its contractual rights and obligations.
• Costs efficiently incurred in administering, managing, and reporting on a transmission services agreement.
• Costs arising from the termination of a transmission services agreement.
• Other costs efficiently incurred for the purpose of giving effect to a determination.

Before entering into a transmission services agreement, the buyer may request confirmation from NERSA on which categories of costs will be recoverable. NERSA must respond to the request within 30 days.

Exemptions

The provisions regulating exemptions from compliance with the Regulations have been strengthened under the Regulations.

Regulation 11 provides that any person may apply to the Minister for an exemption. An exemption application must include:

• The details of the person to whom the exemption will apply.
• The specific provisions of the Regulations for which exemption is sought, together with the reasons.
• The measures the applicant will implement to mitigate any risks that may arise from non-compliance.

The Minister may grant an exemption from compliance with any provision of the Regulations for a specified period and in relation to specific transmission capacity or a specific determination. Such an exemption must be published by notice in the Gazette, following a notice-and-comment process, and must be justifiable considering the circumstances. The Minister may also impose any terms and conditions he considers appropriate.

Importantly, the Minister retains the power to amend or revoke an exemption—after consulting with the affected parties—if its continued operation is likely to compromise the security of energy supply in the country.

The Regulations further clarify that no person may be exempted from complying with any provision of the Act itself.

The future of transmission transformation

The commencement of the Regulations marks a key a step in the South African government's efforts to upgrade the country's transmission infrastructure.

On Monday 3 November 2025, the Department of Electricity and Energy and National Treasury released a media statement updating stakeholders on the implementation of South Africa's Independent Transmission Projects ("ITP") Programme, a first-of-its-kind initiative aimed at attracting large-scale private investment in transmission infrastructure.

According to the media statement, the announcement of Pre-Qualified Bidders for Phase I of the ITP Programme is expected to be made by 15 December 2025, followed by the simultaneous release of a draft Request for Proposal ("RFP"). After the feedback period, the final RFP is scheduled to be released by no later than quarter three of 2026.

The Government has emphasised that they are committed to delivering a "credible, transparent, and globally benchmarked" procurement process and ensuring that the ITP Programme is a catalyst for investment and economic renewal in South Africa, with the Regulations playing a critical role in the transformation of the national grid.

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