Six Chinese firms to set up Gauteng factories for transmission infrastructure, Ramokgopa says
Six Chinese firms to build Gauteng transmission factories as South Africa moves to strengthen its electricity grid, expand local manufacturing and attract billions of rand in energy investment.
The commitments were announced by Electricity and Energy Minister Kgosientsho Ramokgopa during the SA-China Energy Investment Conference in Beijing, where South Africa sought to deepen cooperation with Chinese companies and financiers in the energy sector.
The planned factories are expected to manufacture critical equipment required for the country’s massive transmission expansion programme. The initiative comes as South Africa prepares for one of the biggest upgrades to its electricity infrastructure in decades.
The manufacturing drive is also linked to Pretoria’s broader strategy of attracting foreign investment while ensuring that more of the economic benefits generated by the energy transition remain in South Africa.
Chinese firms Gauteng factories to boost local production
The decision by six Chinese companies to establish or expand manufacturing operations in Gauteng is expected to strengthen South Africa’s ability to produce essential electricity infrastructure locally.
The planned facilities will focus on equipment including transformers, transmission wires, pylons, inverters and smart meters.
These components will be increasingly important as Eskom and other electricity infrastructure developers work to connect new generation projects to the national grid.
South Africa’s electricity transition has created a growing demand for transmission infrastructure. Renewable-energy projects are often located far from major centres of electricity consumption, meaning significant investment in power lines and substations is required before new generation capacity can be fully integrated into the grid.
The Chinese investment could therefore help address one of the major bottlenecks facing South Africa’s energy transition.
For years, the country’s electricity infrastructure has struggled to keep pace with demand. While generation capacity remains a major priority, transmission has increasingly emerged as an equally important challenge.
Kgosientsho Ramokgopa outlines energy investment opportunity
Ramokgopa has positioned South Africa’s energy expansion programme as an opportunity not only to generate electricity but also to rebuild the country’s industrial base.
The minister has argued that foreign companies should not simply supply equipment to South Africa from overseas. Instead, the government wants international investors to establish production capacity locally.
The arrival of the six Chinese firms is therefore significant because it could create a domestic manufacturing ecosystem around electricity infrastructure.
Local factories could create employment opportunities while supporting South African suppliers, engineering companies, logistics businesses and other service providers.
The government also expects greater local production to reduce the country’s dependence on imported electricity equipment.
South Africa transmission infrastructure faces major expansion
South Africa’s Transmission Development Plan calls for a substantial increase in the country’s electricity transmission network.
The programme targets approximately 14,500 kilometres of new transmission lines over the coming years.
The scale of the planned expansion highlights the gap between the country’s current construction capacity and what will be required to support the future electricity system.
South Africa currently adds only a fraction of the transmission infrastructure needed to meet the government’s long-term targets.
This creates a serious challenge because renewable-energy projects cannot contribute fully to the electricity system if there is insufficient grid capacity to connect them.
Solar and wind projects are particularly affected because many of the country’s strongest renewable-energy resources are located in areas where the existing transmission network is limited.
The establishment of manufacturing facilities in Gauteng could help provide some of the equipment needed to accelerate construction.
Eskom grid expansion becomes a national priority
Eskom remains central to the country’s electricity infrastructure despite ongoing reforms designed to create a more competitive electricity market.
The utility’s transmission division is responsible for operating and expanding the national transmission network, making its infrastructure requirements critical to the future of South Africa’s energy system.
The planned Eskom grid expansion will need to accommodate additional renewable generation, battery storage, gas, nuclear and other sources of electricity.
The government has therefore increasingly focused on transmission investment as a prerequisite for unlocking private-sector generation projects.
Without sufficient transmission capacity, new power stations can face delays in connecting to the national grid.
The manufacturing commitments could help address this problem by increasing the availability of transformers, conductors, pylons and other equipment required for major grid projects.
$122 billion energy investment plan
The manufacturing commitments form part of a much larger energy investment programme estimated at about $122 billion, or roughly R2.2 trillion.
The broader programme is intended to support the addition of approximately 105 gigawatts of new electricity-generation capacity by 2039.
The planned generation mix includes solar power, wind energy, battery storage, nuclear power and gas.
The government hopes the investment will provide sufficient electricity to support economic growth while reducing the risk of future power shortages.
However, generation alone will not solve South Africa’s electricity infrastructure challenges.
The electricity produced by new power stations must be transported to businesses, mines, factories, households and other consumers.
That is why the expansion of transmission infrastructure is being treated as a critical component of the country’s long-term energy strategy.
The six Chinese firms could consequently play a role in supporting both the physical expansion of the grid and the government’s industrialisation objectives.
Local content and job creation remain priorities
While the government is welcoming Chinese investment, officials have stressed that international companies should complement rather than replace South African businesses.
The Department of Trade, Industry and Competition is pursuing stronger local-content requirements for infrastructure projects.
One of the objectives is to increase the use of locally produced materials, including structural steel used in transmission infrastructure.
The government also wants energy infrastructure projects to generate employment and develop domestic industrial capabilities.
Future procurement processes are expected to continue using competitive tendering, while requirements around local content and job creation could influence the competitiveness of bids.
This approach is designed to ensure that foreign investment translates into broader economic benefits rather than simply increasing imports.
Chinese investment and South Africa’s industrial strategy
China is a major global producer of renewable-energy equipment, batteries, transmission technology and electrical components.
For South Africa, attracting Chinese manufacturers could provide access to technology, capital and manufacturing expertise while supporting the country’s own industrialisation ambitions.
The strategy could also position Gauteng as an important manufacturing base for electricity infrastructure.
If local factories reach sufficient scale, South Africa could potentially supply equipment to other African countries undertaking their own energy-transmission programmes.
This would support Pretoria’s ambition to position the country as a regional clean-energy manufacturing and technology hub.
What the investment means for South Africa
The announcement of the six Chinese firms comes at a crucial moment for South Africa’s energy sector.
The country is attempting to move beyond the electricity crisis that resulted in years of load shedding while simultaneously transforming its energy system to accommodate a larger share of renewable generation.
Achieving those objectives requires substantial investment in generation, transmission, distribution, storage and manufacturing.
The planned Chinese factories could contribute to several of these objectives at the same time.
They could increase the supply of critical equipment, support local employment, reduce import dependence and potentially develop export opportunities, for electricity consumers the ultimate objective is improved energy security.
For businesses, reliable electricity and stronger infrastructure could support investment and economic expansion.
For government, successful implementation would demonstrate that energy investment can also become a driver of industrial development.
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A major test for South Africa’s energy transition
The six Chinese firms to build Gauteng transmission factories represent more than an investment in individual manufacturing facilities.
They form part of a much wider attempt to connect South Africa’s energy transition with industrialisation, job creation and economic development.
The success of the programme will depend on how quickly new factories can be established, whether financing arrangements materialise, and whether the necessary transmission projects are delivered on schedule.
South Africa will also need to maintain transparent procurement processes and ensure that local businesses benefit from the investment.
If these objectives are achieved, the initiative could strengthen the country’s electricity infrastructure while creating a new manufacturing base around the energy sector.
The government’s $122 billion energy investment programme is ambitious, but the planned manufacturing commitments indicate that Pretoria is seeking to address both sides of the challenge: producing more electricity and building the infrastructure required to deliver it.
For South Africa, the expansion of transmission capacity could ultimately become one of the most important foundations for ending the country’s long-running electricity constraints and supporting the next phase of economic growth.
References
- News24 – Six Chinese firms to set up Gauteng factories for transmission infrastructure, Ramokgopa says
News24 reports that six Chinese companies have committed to establishing factories in Gauteng to manufacture transmission infrastructure, including wires, transformers and pylons.
Read the News24 report - SABC News – Ramokgopa unveils 14 000 km power line plan to drive energy security
SABC News reports on Ramokgopa’s plans to expand South Africa’s transmission network by about 14,000km as part of a R440 billion infrastructure programme.
Read the SABC News report - IOL – Ramokgopa confirms State control of R440 billion transmission grid
IOL covers the government’s R440 billion transmission expansion programme and the planned development of nearly 14,500km of new transmission lines.
Read the IOL report
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