South Africa Power-Line Rollout Set to Spur Bond Market Revival

A multibillion-dollar plan to expand South Africa’s electricity transmission network could throw a lifeline to the country’s corporate bond market as it struggles to recover from a post-pandemic slump.

Bloomberg reports that the National Transmission Company South Africa, a state-owned company that will operate separately from parent Eskom Holdings, said this week that it plans to spend 112 billion rand equivalent to $6.4 billion on transmission capacity over the next five years.

Rand Merchant Bank said while the Company hasn’t decided on funding models, at least some of the money would have to come from capital markets.

A flood of new issuance for transmission lines — and other infrastructure spending by state-owned companies — could help revive the corporate bond market, where new issuance remains below the record levels seen before Covid-19 plunged the economy into contraction.