Eskom today launched Eskom Green, a dedicated renewable energy business designed to accelerate utility-scale renewable energy projects and support large power users in achieving decarbonization objectives. The new entity responds to research on over 20 global utilities, which indicates renewable project development requires agile decision-making and diverse capital sources differing from Eskom's legacy generation model. South Africa's Integrated Resource Plan (IRP) 2025 targets 5.6GW of renewables by 2030, yet only 50% of projects awarded since the IRP 2019 have been built, highlighting the need for stronger coordination to meet emissions-reduction targets while maintaining energy security.
Eskom Green Introduces Transparent Pricing and Take-or-Pay Contracts
Eskom Green positions itself as the customer's primary energy provider, contracting for core renewable energy requirements and delivering through its own renewable generation supplemented by storage and firming arrangements for round-the-clock supply. The pricing structure passes the wholesale tariff through to the customer at cost, with network, wheeling, and other regulated wholesale charges presented as distinct line items separate from the energy price. Group Executive for Eskom Renewables Rivoningo Mnisi stated that the business "rapidly accelerates the options available to South Africa's industries to decarbonise and transition industrial and productive capacity to maintain export competitiveness."
The foundation phase targets large industrial demand in mining and manufacturing through Section 34 IRP allocations and direct bilateral Power Purchase Agreements (PPAs). Under a take-or-pay structure, customers commit to a fixed volume and pay the agreed price whether or not energy is consumed, providing Eskom Green the firm revenue base that anchors Special Purpose Vehicles (SPVs) for project financing. The technology pipeline is weighted to solar PV with supporting Battery Energy Storage System (BESS), pumped storage, and wind to deliver the 2GW operational target. The second phase of the offering will serve the Eskom Distribution market, the South African Wholesale Electricity Market (SAWEM), the Southern African Power Pool (SAPP), and municipalities.
Eskom Green Targets 6GW Renewable Capacity by 2030
Eskom Green identified 17 high-priority projects for implementation across existing coal-fired power station footprints, leveraging established infrastructure to deliver approximately 6GW of additional capacity by 2030. This includes at least 2GW of renewable energy and pumped storage projects expected to advance from 2026, anchored by the 75MW Lethabo solar PV project in the Free State. The approach of co-locating renewable and conventional generation will extend to additional sites, with the next project planned for the Komati Power Station.
Eskom Group Chief Executive Dan Marokane stated that the announcement "is not simply about carbon content compliance but delivering leading-edge solutions at scale to enable our customers in implementing their decarbonisation strategies." In line with the IRP 2025, Eskom Green's contribution is essential to delivering overall renewable build targets of 5.6GW by 2030, 21GW by 2035, and 32GW by 2040. Beyond the confirmed 6GW, Eskom Green will advance a pipeline of up to 32GW of renewable energy and storage projects by 2040, funded through dedicated project SPVs.
Eskom Green to Operate as Wholly Owned Subsidiary Pending Approvals
Eskom Green is part of Eskom Holdings today and, as part of the organization's unbundling strategy, will be separated to become a wholly owned subsidiary with an independent board, subject to necessary governance, regulatory, and shareholder approvals. The ring-fenced subsidiary structure provides a fit-for-purpose institutional mechanism enabling dedicated focus on renewable energy development, improved bankability through ring-fenced financial and governance structures, access to private and concessional capital through project-level SPVs, greater flexibility to partner with private sector participants, and faster decision-making within defined governance frameworks. This approach is consistent with international best practice where state-owned utilities have established dedicated renewable platforms.
Funding for initial phases has been provisioned within Eskom's approved capital expenditure programme and is expected to be supported through on-balance sheet funding, in compliance with National Treasury debt relief conditions and without reliance on additional project finance borrowing. The project pipeline will be implemented in a phased manner to support system reliability while enabling a managed transition and local economic participation. Subsequent stages are expected to incorporate public-private partnerships (PPPs), co-development structures, and hybrid solutions integrating solar PV and BESS. The utilization of project finance principles for the 32GW pipeline ensures limited recourse to the Eskom balance sheet while leveraging Eskom's existing footprint and system knowledge.
FAQ
What is Eskom Green and when was it launched?
Eskom Green is a dedicated renewable energy business launched today by Eskom to accelerate utility-scale renewable energy projects and support large power users in achieving decarbonization objectives. The entity was designed in response to global benchmarking research on over 20 utilities and will become a wholly owned subsidiary with an independent board, subject to necessary governance, regulatory, and shareholder approvals.
How much renewable energy capacity will Eskom Green deliver by 2030?
Eskom Green identified 17 high-priority projects across existing coal-fired power station footprints to deliver approximately 6GW of additional capacity by 2030, including at least 2GW of renewable energy and pumped storage projects expected to advance from 2026. The first project is the 75MW Lethabo solar PV project in the Free State, with the next project planned for the Komati Power Station.
What pricing structure does Eskom Green use for customer contracts?
Eskom Green passes the wholesale tariff through to customers at cost, with network, wheeling, and other regulated wholesale charges presented as distinct line items separate from the energy price. Customers enter take-or-pay contracts, committing to a fixed volume and paying the agreed price whether or not energy is consumed, providing the firm revenue base that anchors Special Purpose Vehicles (SPVs) for project financing.
