South Africa’s Eskom explores World Bank backing for multibillion-dollar nuclear build

South Africa’s state-owned power utility Eskom Holdings SOC Ltd. is in early discussions with the World Bank over possible funding support for a multibillion-dollar nuclear power program that could move into formal market engagement within the next 12 months. The utility, which operates Africa’s only commercial nuclear plant near Cape Town, is preparing a request for information for as much as 5,200 megawatts of new nuclear capacity.

The plan reflects South Africa’s effort to secure steady baseload electricity at a time when the grid remains heavily dependent on coal and continues to face supply constraints. Under the proposal, Eskom is considering 4,800 megawatts from conventional pressurised water reactors and about 400 megawatts from small modular reactors. At least half of the modular capacity is expected to support a broader shift away from aging coal infrastructure.

Early-stage talks with global lenders

Speaking at an energy conference in Cape Town, Eskom generation head Bheki Nxumalo said the utility is still in the early stages of identifying potential financiers and structuring options. “We are in exploratory discussions with most of the potential funders … (over) different ways of funding this,” he said. “We are looking for anyone with ideas, there are different options.”

Nxumalo added that Eskom cannot fund new nuclear projects on its own and will need partners ranging from development finance institutions to commercial lenders. The African Development Bank is among the institutions being considered, alongside possible public-private partnerships and vendor financing models similar to arrangements used in other large nuclear projects globally. He noted that Eskom plans to approach the market for both conventional and modular nuclear technologies within the next year, although internal preparation work is still under way.

The World Bank has recently indicated a more flexible approach toward nuclear energy financing, saying it would consider supporting countries that include it in their long-term energy planning. The institution has said its engagement is guided by national development priorities and existing policy frameworks covering a range of power generation technologies.

Eskom gains multi-year tariff relief

Eskom, owned by the South African government, manages electricity generation, transmission and distribution and participates in regional power trade within the Southern African Development Community. Under CEO Dan Marokane, utility has focused on operational improvements and cost control across its infrastructure network. Eskom oversees procurement spending of R100 billion ($5.92 billion) and capital expenditure of R60 billion ($3.55 billion). 

Separately, the utility has gained financial relief after regulatory and legal developments. The National Energy Regulator of South Africa has allowed Eskom to raise electricity tariffs by up to 8.3 percent annually through 2028 after a court ruling found errors in allowable revenue calculations. The Supreme Court of Appeal ruled the regulator misapplied its methodology in determining Eskom’s 2023 revenue allowance, particularly in depreciation and asset returns. Requiring recalculation that increases revenues.