25 May to 7 June 2026

Roundup of major energy and electricity news and developments

by Chris Yelland, managing director, EE Business Intelligence

1. Wheeling, finance and corporate demand drives new clean energy in South Africa.

South Africa's renewable energy sector has recorded a series of significant milestones, highlighting the continued evolution towards innovative financing, wheeling and customer-focused energy solutions. A major development was the R5.8-billion funding package structured by Nedbank Corporate & Investment Banking in support of Anthem Renewable Energy's portfolio. The transaction indicates continued investor confidence in South Africa's renewable energy market despite broader economic and policy uncertainties. Project execution also continues. Enel Green Power announced commercial operation of the 140 MW Impofu North wind farm in the Eastern Cape, adding to the growing pipeline of renewable energy capacity being connected to the national grid. The project forms part of the larger Impofu wind cluster and contributes to South Africa's ongoing diversification of electricity supply. The wheeling market is also maturing. Etana Energy and Growthpoint Properties launched Cape Town's first pooled renewable energy wheeling arrangement, enabling multiple commercial buildings to access renewable electricity sourced from a hydroelectric facility through a shared procurement model. The initiative demonstrates how wheeling structures are becoming increasingly accessible to customers that lack the scale to secure dedicated power purchase agreements (PPAs). Meanwhile, the University of Cape Town has entered into a wheeling arrangement to supplement its rooftop solar programme, illustrating how large campuses are increasingly combining onsite generation with remotely sourced renewable energy to meet sustainability and energy-security objectives. At the residential level, new data indicates that almost 7% of South African households now rely on some form of solar power, reflecting continued growth in distributed generation despite a slowdown from the record installation rates seen during the height of load-shedding. Together, these developments point to a renewable energy market that is becoming more diverse, sophisticated and deeply embedded across South Africa's economy.

2. Regional renewable energy pipeline gathers pace across Southern Africa.

Renewable energy developments across Southern Africa continue with new project announcements in Zambia and Mauritius highlighting the region's growing commitment to expanding clean-energy capacity, improving energy security and attracting private-sector investment. Mauritius has launched a tender for 220 MW of solar photovoltaic capacity across 13 sites supported by battery energy storage (BES) systems. This represents the largest renewable energy procurement initiative undertaken by the island nation. The programme, made up of ten sites of 10 MW each and three sites of 40 MW each, forms part of Mauritius' strategy to reduce dependence on imported fossil fuels, strengthen energy security and increase the share of renewables in its electricity mix. The procurement is supported by the World Bank and International Solar Alliance and is part of a wider pipeline of 405 MW aimed at achieving the Mauritian target of 60% renewable energy by 2030. In Zambia, the government has signed an implementation agreement for the 16 MW Northrise Solar Project in Ndola. The project is expected to contribute to the country's efforts to diversify its electricity supply following recent drought-related disruptions to hydropower generation. Zambia remains heavily dependent on hydroelectricity, and policymakers are increasingly pursuing solar, wind and battery storage projects to improve resilience against climate-related risks and support growing electricity demand. While modest in scale, the Northrise project reflects a broader trend across the region toward distributed and medium-sized renewable energy developments capable of being delivered relatively quickly and financed through partnerships between governments, developers and development finance institutions. The latest announcements add to a growing pipeline of renewable energy projects across Southern Africa, where governments are seeking to address rising electricity demand, improve system reliability and attract investment into modern energy infrastructure.

3. Debt-for-energy deal aims to strengthen Zambia's finances and electricity supply.

Zambia has launched a landmark initiative to repurchase up to US $1.36-billion of its sovereign Eurobond that matures in 2053, in a move that combines debt management with long-term investment in electricity infrastructure. The Southern African nation announced on 30 May 2026 that it had launched a tender offer to buy back its US$1.36-billion Fixed Rate Step-Up Amortising Notes using a US $600-million loan from the African Development Bank (AfDB) on favourable terms, supplemented by its own resources. The transaction follows Zambia's successful sovereign debt restructuring completed in 2024 and is intended to reduce future debt-servicing costs while improving the country's financial position. What makes the transaction particularly noteworthy is its link to a 15-year national Grid Resilience Programme, a condition of AfDB support. The programme will invest in Zambia's electricity distribution network to improve reliability, reduce constraints on economic growth and strengthen access to affordable electricity. The initiative will be coordinated by GreenCo Power Services, part of the Africa GreenCo Group, through a newly established entity governed jointly by private-sector and government representatives. The deal has been described as Africa's first large-scale debt-for-energy conversion and could serve as a template for other countries in Africa seeking to align debt management with infrastructure development. If at least 75% of bondholders participate, Zambia can activate a clean-up provision negotiated during its debt restructuring, allowing it to redeem the remaining bonds and simplify its debt portfolio. Beyond improving fiscal sustainability, the transaction is expected to create budgetary space for economic development and social spending while supporting a more resilient electricity system in a country heavily dependent on hydropower and increasingly vulnerable to climate-related droughts. For Africa GreenCo, this may prove a watershed moment, elevating the company from a renewable energy trader to a regional electricity-market infrastructure institution.

4. Temporary reprieve for City Power Johannesburg as its electricity finances unravel.

The City of Johannesburg and its electricity utility, City Power, have faced intensifying financial pressure over the past two weeks, exposing the scale of the metro's electricity-sector crisis and the growing risks to infrastructure investment, service delivery and governance. A temporary reprieve was secured after Eskom suspended plans for widespread supply interruptions following an agreement with the City on a revised debt repayment framework. The arrangement, facilitated by Energy & Electricity Minister Kgosientsho Ramokgopa, includes measures to ringfence electricity revenue and improve payment discipline. Eskom had warned of supply interruptions over arrears estimated at more than R5-billion. At the same time, the city sought council approval for a proposed R38-billion concessional loan package from Germany's KfW development bank to address a large portion of Johannesburg's electricity infrastructure backlog. City officials argue that decades of underinvestment have left networks increasingly vulnerable to failures, theft, vandalism and capacity constraints, with substantial funding required to modernise substations, cables and distribution infrastructure. The developments come amid growing scrutiny of the city's financial management. Analysts and business groups have warned that chronic under-collection of revenue, escalating debtors, electricity losses, governance instability and deteriorating infrastructure are creating a cycle of financial distress that threatens the long-term sustainability of electricity services. The crisis has also become increasingly political. Business organisations have renewed calls for greater private-sector participation in municipal infrastructure delivery and management, while opposition parties have cited the Eskom debt dispute as evidence of deeper governance failures. Although speculation emerged that Johannesburg could be placed under administration, Gauteng authorities have rejected such suggestions. For now, the immediate threat of power interruptions to the City has receded. However, the underlying challenges of debt, revenue collection, infrastructure investment and institutional reform remain unresolved.

5. Treasury's rescue plan falters as Eskom tightens pressure amid tariff increases.

South Africa's municipal electricity debt crisis worsens, with National Treasury terminating debt-relief support for dozens of municipalities that failed to meet the conditions of a debt-restructuring programme aimed at restoring financial discipline and protecting Eskom's revenue base. Of the 71 municipalities originally admitted to the programme in 2023, only a handful remain fully compliant. Treasury has now confirmed that 61 municipalities have breached key conditions, resulting in the withdrawal of debt-relief benefits. The development raises fresh concerns over the sustainability of municipal electricity distribution and Eskom's growing exposure to unpaid debt, which is now estimated to exceed R130-billion. At the same time, pressure is mounting on indebted municipalities to conclude Distribution Agency Agreements (DAAs) with Eskom by September 2026. Under these agreements, Eskom assumes responsibility for functions such as electricity billing, revenue collection, network maintenance and customer management, while municipalities retain ownership of the assets. Pilot arrangements are already underway, with indications that Eskom's role could ultimately expand to as many as 30 municipalities. Supporters argue that DAAs offer a practical mechanism to improve revenue collection, reduce losses and stabilise failing distribution businesses. Critics, however, view the agreements as a de facto transfer of municipal powers to Eskom, raising concerns over Eskom's own capacity constraints, local government autonomy, accountability and the future structure of the electricity distribution industry. The debate comes as NERSA has completed approval of electricity tariffs for all 176 licensed electricity distributors ahead of the 1 July 2026 municipal tariff implementation date. While the new tariffs provide distributors with additional revenue, analysts warn that tariff increases alone will not resolve deep-rooted governance, operational and financial failures within many municipalities. The collapse of the debt-relief programme and growing controversy over DAAs indicate the urgent need for structural reform of South Africa's municipal electricity distribution sector.

6. First major project announced alongside launch of Eskom Green on 9 June 2026.

Eskom Holdings SOC will officially launch Eskom Green on 9 June 2026, marking a significant milestone in the utility's efforts to reposition itself for South Africa's evolving electricity landscape and growing demand for low-carbon energy solutions. The new subsidiary has been established to accelerate the development of utility-scale renewable energy projects, support customer decarbonisation initiatives and expand Eskom's participation in the country's energy transition. The launch comes as the utility seeks to diversify beyond its traditional coal-based generation fleet while leveraging its land holdings, grid connections and technical capabilities. Alongside the launch, Eskom Green announced its first major project on 27 May 2026: the 75 MW Lethabo Solar PV facility adjacent to the Lethabo coal-fired power station in the Free State. Construction has already commenced on the approximately R1.2-billion project, which is expected to be completed by late 2027. The project will utilise existing transmission infrastructure and forms part of Eskom's strategy to repurpose and optimise coal-fired power station sites. Eskom has indicated that Lethabo is only the first step in a much larger renewable energy pipeline. The utility has identified several coal-fired power station sites suitable for solar, wind and battery energy storage developments, potentially creating multiple gigawatts of new clean-energy capacity over time. The launch reflects a notable strategic shift for Eskom. While independent power producers (IPPs) have dominated renewable energy investment over the past decade, Eskom Green positions the utility as a direct participant in future renewable generation developments. It also aligns with broader efforts to modernise Eskom's business model as electricity markets become increasingly competitive and decentralised. For South Africa's electricity sector, Eskom Green represents both a symbolic and practical acknowledgement that renewable energy will form a central pillar of the country's future power system.

7. South Africa's oil and gas sector sees strategic moves despite transition pressures.

South Africa's oil and gas sector has seen some significant developments over the past two weeks, highlighting growing momentum behind liquefied natural gas (LNG) infrastructure while underscoring the challenges facing the country's broader energy transition. A 25-year agreement was signed between Transnet National Ports Authority (TNPA) and Ukwanda LNG for the development of a R22-billion LNG import terminal at the Port of Ngqura in the Eastern Cape. The project is expected to establish one of South Africa's largest LNG import facilities and forms part of wider efforts to create a domestic gas economy as coal-fired generation is set to progressively reduce. Momentum also continued in Richards Bay, where Eskom signed a cooperation agreement with Zululand Energy Terminal (ZET) to explore LNG supply arrangements for Eskom's proposed 3000 MW gas-to-power project. The initiative is intended to provide flexible dispatchable generation capacity to support a power system increasingly supplied by variable wind and solar resources. However, major questions remain around fuel pricing, infrastructure timelines, financing and the long-term role of gas within South Africa's decarbonisation pathway. Meanwhile, attention has turned to the future of South Africa's liquid-fuels sector. Reports highlight the strategic importance of the Astron Energy refinery in Cape Town, now one of the country's few remaining operational crude oil refineries, with a processing capacity of about 100,000 barrels per day. The closure or conversion of several other refineries has heightened concerns about fuel import dependence and energy security. At the same time, analysts continue to assess the implications of the energy transition for Sasol, whose coal-to-liquids business faces increasing carbon-related pressures, policy uncertainty and investor scrutiny. Together, these developments illustrate South Africa's complex balancing act between energy security, economic competitiveness and decarbonisation as the country reshapes its future energy mix.

8. NERSA approves smelter tariff lifeline as industrial policy debate intensifies.

South Africa's long-running debate over special electricity tariffs for energy-intensive industries continues after NERSA's approval on 30 May 2026 of a new negotiated pricing agreement (NPA) for the ferrochrome smelting sector. The agreement provides qualifying ferrochrome smelters with an electricity at a tariff of approximately R0.62/kWh, very substantially below standard industrial tariffs. Eskom and industry participants argue that the arrangement is necessary to preserve jobs, sustain exports and prevent the permanent closure of strategically important smelting capacity. The immediate impact was evident when Glencore-Merafe announced the suspension of planned retrenchments at its Boshoek and Wonderkop smelters following confirmation of the tariff approval. Industry representatives contend that ferrochrome producers have become increasingly uncompetitive against rivals in countries benefiting from lower electricity costs, state support and newer production facilities. Eskom has defended the agreement as a commercially rational arrangement that improves utilisation of surplus generating capacity during periods of lower demand while contributing to revenue recovery. The utility has also argued that maintaining industrial demand helps spread fixed system costs across a larger sales base. However, the approval has triggered renewed criticism from transparency advocates, energy analysts and some industrial consumers. Critics argue that the discounted tariff is a small fraction of the true cost of supply, and question whether preferential pricing is appropriate at a time when households, municipalities and other businesses continue to face rising electricity tariffs. Concerns have also been raised about the implications for competition, market reform and South Africa's broader decarbonisation objectives. While preserving industrial employment and export earnings remains a priority, questions persist over how long negotiated tariff concessions can coexist with electricity market reform, cost-reflective pricing principles and the country's evolving energy-transition agenda.

9. eThekwini solar PV and battery pilot signals growing interest in Virtual Power Plants.

Interest in Virtual Power Plants (VPPs) is growing in South Africa as utilities, municipalities and private-sector participants explore new ways to integrate distributed energy resources, improve grid resilience and unlock value from flexible electricity demand. A significant recent development is eThekwini Municipality's launch in association with technology provider Plentify of South Africa's first residential battery Virtual Power Plant pilot. The initiative invites households equipped with solar photovoltaic systems and battery storage to participate in a programme that will aggregate and coordinate residential energy resources to support the local electricity network. The project reflects a broader global trend in which VPPs combine thousands of distributed assets – including rooftop solar systems, battery energy storage, electric vehicles, smart appliances and demand-response resources – and operate them as a single flexible power resource. Rather than building new conventional generation capacity, VPPs seek to optimise existing electricity networks and customer-owned assets through advanced digital platforms and real-time control systems. The concept is attracting growing attention in South Africa as electricity markets evolve and distributed energy resources proliferate. Nearly 7% of South African households are now estimated to use some form of solar power, while commercial, industrial and mining customers continue to invest heavily in solar PV and battery systems. These assets represent a substantial untapped resource that could potentially provide balancing services, peak-demand reduction and reserve capacity to the power system. The emergence of the South African Wholesale Electricity Market (SAWEM), expanding battery deployments and advances in smart metering, communications and control technologies are expected to create additional opportunities for VPP participation in electricity trading and ancillary services markets. While regulatory, technical and commercial frameworks are still evolving, VPPs are increasingly being viewed as a potentially important component of South Africa's future electricity system, complementing both utility-scale generation and distributed energy resources.