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Eskom Green launched with 2 GW private-partnership pipeline and R10-billion allocation
Eskom Green, the renewables subsidiary of South African State-owned utility Eskom, has been officially launched and intends to implement an initial 2 GW pipeline of advanced utility-scale renewable energy projects in partnership with private investors, mostly on land adjacent to the group's coal-fired power stations.
Eskom group executive for renewables Rivoningo Mnisi told Engineering News that some R10-billion had been allocated to the entity over the coming five years. The subsidiary is simultaneously advancing several smaller projects, with a combined capacity of 500 MW, to be funded on Eskom's balance sheet using capital set aside in the group's corporate plan.
Among these is a 75 MW solar photovoltaic (PV) plant that recently entered construction beside the Lethabo power station, in the Free State.
Eskom is funding the R1.2-billion project and has appointed the Letsatsi joint venture as engineering, procurement and construction contractor. Mnisi described the Lethabo project — together with schemes earmarked for land adjacent to the Arnot, Duvha, Komati, Majuba and Tutuka stations, and at the Sere wind farm — as skills-transfer and skills-development projects. The next project expected to enter execution will be located at the decommissioned Komati site and could include battery storage.
Eskom has, since 2023, traded with taxpayer support through a R230-billion debt-relief package that has prevented it from investing in new generation. Mnisi said Eskom had received all necessary authorisations to proceed with the initial developments, including from the National Treasury, with funding provisioned within the group's approved capital expenditure programme on an on-balance-sheet basis, in compliance with debt-relief conditions and without additional project-finance borrowing.
For the 2 GW pipeline and further renewables and storage projects — including the 1.5 GW Tubatse pumped-storage scheme — a private sector participation model is envisaged. Private participation was included as a condition for Eskom Green's establishment as a standalone subsidiary of Eskom Holdings under Section 51G of the Public Finance Management Act (PFMA). The entity, which will have its own board, will pursue projects with private equity partners through special purpose vehicles (SPVs) applying project-finance principles, with limited recourse to Eskom's still-fragile balance sheet.
Eskom Green is preparing a request for qualifications to initiate the selection of private equity partners and has appointed PwC and the Development Bank of Southern Africa (DBSA) as advisers.
The SPVs would be required to secure offtakers, grid access and all regulatory and environmental approvals to reach financial close, with Eskom Green contributing the land.
Mnisi said the entity would be subject to the same grid-access rules as independent power producers (IPPs) competing for limited grid capacity, with strict separation maintained between Eskom Green and Eskom's Grid Access Unit. "We follow the same grid rules," he said. engineeringnews
Eskom Green is targeting 5.6 GW of renewables by 2030 across 17 projects, with an aspiration of 32 GW by 2040, and has indicated that battery energy storage systems could be integrated into several projects.
Mnisi said the entity would be flexible on equity levels, would seek concessionary funding under the Just Energy Transition Partnership (JETP), and expected initial SPVs to target bilateral power purchase agreements (PPAs) with large mining or industrial customers, while remaining open to other models, including partnerships with licensed electricity traders.
Among these is a 75 MW solar photovoltaic (PV) plant that recently entered construction beside the Lethabo power station, in the Free State.
Eskom is funding the R1.2-billion project and has appointed the Letsatsi joint venture as engineering, procurement and construction contractor. Mnisi described the Lethabo project — together with schemes earmarked for land adjacent to the Arnot, Duvha, Komati, Majuba and Tutuka stations, and at the Sere wind farm — as skills-transfer and skills-development projects. The next project expected to enter execution will be located at the decommissioned Komati site and could include battery storage.
Eskom has, since 2023, traded with taxpayer support through a R230-billion debt-relief package that has prevented it from investing in new generation. Mnisi said Eskom had received all necessary authorisations to proceed with the initial developments, including from the National Treasury, with funding provisioned within the group's approved capital expenditure programme on an on-balance-sheet basis, in compliance with debt-relief conditions and without additional project-finance borrowing.
For the 2 GW pipeline and further renewables and storage projects — including the 1.5 GW Tubatse pumped-storage scheme — a private sector participation model is envisaged. Private participation was included as a condition for Eskom Green's establishment as a standalone subsidiary of Eskom Holdings under Section 51G of the Public Finance Management Act (PFMA). The entity, which will have its own board, will pursue projects with private equity partners through special purpose vehicles (SPVs) applying project-finance principles, with limited recourse to Eskom's still-fragile balance sheet.
Eskom Green is preparing a request for qualifications to initiate the selection of private equity partners and has appointed PwC and the Development Bank of Southern Africa (DBSA) as advisers.
The SPVs would be required to secure offtakers, grid access and all regulatory and environmental approvals to reach financial close, with Eskom Green contributing the land.
Mnisi said the entity would be subject to the same grid-access rules as independent power producers (IPPs) competing for limited grid capacity, with strict separation maintained between Eskom Green and Eskom's Grid Access Unit. "We follow the same grid rules," he said. engineeringnews
Eskom Green is targeting 5.6 GW of renewables by 2030 across 17 projects, with an aspiration of 32 GW by 2040, and has indicated that battery energy storage systems could be integrated into several projects.
Mnisi said the entity would be flexible on equity levels, would seek concessionary funding under the Just Energy Transition Partnership (JETP), and expected initial SPVs to target bilateral power purchase agreements (PPAs) with large mining or industrial customers, while remaining open to other models, including partnerships with licensed electricity traders.