Eskom Holdings, South Africa’s state-owned power utility, has launched Eskom Green, a dedicated renewable energy business aimed at scaling up utility-level clean power projects and supporting large industrial customers as the country shifts toward lower-carbon electricity.

The new business unit is designed to speed up renewable development through more flexible structures, faster decision-making and partnerships with private capital. The move follows comparative research on more than 20 global utilities, which found that renewable projects typically require different delivery models from traditional vertically integrated power systems.

“Eskom Green is a utility-scale renewable energy business that rapidly expands the options available to South Africa’s industries to decarbonise while remaining competitive in export markets,” said Rivoningo Mnisi, Eskom group executive for renewables. “It increases the supply of renewable energy to help customers reduce the carbon footprint of their electricity use.”

Eskom Group Chief Executive Dan Marokane said the initiative reflects a shift in how the utility applies its engineering and operating experience. “This is not only about compliance. It is about delivering practical solutions at scale for customers,” he said.

Eskom Green currently sits within Eskom Holdings as part of the utility’s broader restructuring plan. It is expected to become a wholly owned subsidiary with its own board, subject to regulatory and shareholder approvals.

Customer model built around industrial demand

The new business will initially focus on mining and manufacturing customers through bilateral power purchase agreements and allocations under the Integrated Resource Plan framework.

Customers will contract directly with Eskom Green for renewable supply, which will be backed by a mix of solar, wind, battery storage and pumped hydro. Where needed, the system will include firming solutions to support continuous supply.

Pricing will be structured to improve transparency. Wholesale electricity costs will be passed through at cost, while network and wheeling charges will appear separately as regulated fees, without mark-ups. Eskom said this approach is intended to give customers clearer visibility on what they pay for energy versus grid access.

Contracts are expected to follow a take-or-pay model, where customers commit to agreed volumes and prices regardless of actual usage. Eskom said this structure will help anchor financing for project-specific vehicles used to raise capital.

Eskom Green targets 6GW pipeline by 2030

Eskom Green will play a central role in delivering South Africa’s renewable build targets under the 2025 Integrated Resource Plan, which sets out 5.6GW by 2030, 21GW by 2035 and 32GW by 2040.

The utility said about 6GW of carbon-free capacity is expected to be available by 2030 from its current pipeline of renewable and storage projects. Seventeen priority projects have been identified across existing coal station sites, including early-stage solar development at Lethabo in the Free State and future work planned at Komati.

Eskom said co-locating renewable projects with existing infrastructure is expected to lower costs and speed up delivery while improving grid stability.

Funding for initial projects will come from Eskom’s approved capital expenditure programme and on-balance-sheet financing, in line with existing National Treasury conditions. Future phases are expected to rely more heavily on project finance structures and public-private partnerships.

Beyond 2030, Eskom Green plans to expand its pipeline to as much as 32GW of renewable and storage capacity by 2040, supported through dedicated special purpose vehicles and external investment.

Eskom operations and structure

Eskom, established in 1923 and owned by the South African government, continues to manage generation, transmission and distribution while participating in regional power trade.

Under Chief Executive Dan Marokane, the utility has focused on stabilising operations, improving cost controls, and expanding its long-term generation mix.

Recent developments include early-stage discussions with the World Bank on potential support for a multibillion-dollar nuclear power program and a long-term liquefied natural gas agreement linked to a planned 3,000-megawatt gas-to-power project in Richards Bay.