Eskom Launches Tender for New Renewable Energy Subsidiary

2025-04-14

Eskom Launches Tender for New Renewable Energy Subsidiary

Eskom has issued an Invitation To Tender (ITT) seeking experienced firms to help establish a separate renewable energy business unit, marking a significant step in the utility's diversification strategy.

Tender Details and Requirements

The tender, which closes on May 7, 2025, at 10:00 SAST, calls for organizations with proven experience in establishing renewable energy companies. Successful applicants will provide 12 months of support to Eskom in accelerating its renewable energy deployment.

Selection criteria include:

• Demonstrated track record in establishing renewable energy companies
• Experience with Public-Private Partnerships (PPPs) and Special Purpose Vehicles (SPVs)
• IPP business model and financial structuring expertise
• Technical capability and sector knowledge

The tender documentation is available on Eskom's website.

Structure and Strategic Goals

According to Eskom, the new renewable energy subsidiary will operate independently from the main utility. This separation aims to provide greater governance agility, competitive market positioning, and enhanced capacity for Public-Private Partnerships (PPPs).

Dan Marokane, Eskom's Group Chief Executive, emphasized that this initiative forms part of the utility's broader turnaround strategy: "We are not just focused on ending loadshedding. At the same time, we are pivoting Eskom into a sustainable and competitive company while ensuring security of supply."

Marokane added that bringing in external expertise would help Eskom establish the business more efficiently through knowledge transfer, enabling faster execution of strategic initiatives in a competitive market.

Renewable Energy Pipeline

The utility has disclosed an initial pipeline of at least 2GW of clean energy projects targeted for completion by 2026. More significantly, Eskom claims to have developed a pipeline exceeding 20GW of clean energy projects to diversify its energy mix.

These projects will complement Eskom's existing generation capacity, which remains predominantly coal-based.

Outlook

This tender represents a concrete step in Eskom's long-discussed transition toward cleaner energy. While the utility maintains its commitment to a balanced energy mix including existing coal and nuclear assets, this move signals increased momentum toward diversification.

The establishment of a dedicated renewable subsidiary comes as South Africa works to address its energy security challenges after the prolonged loadshedding crisis of 2022-2024. The country's Integrated Resource Plan has emphasized the need for rapid renewable expansion alongside stable baseload capacity.

Eskom has committed to providing updates on the development of this renewable energy business throughout 2025. The success of this initiative will depend on both Eskom's implementation capacity and the quality of partnerships established through this tender process.

Key Terms Explained

Public-Private Partnerships (PPPs): Collaborative arrangements between government entities like Eskom and private sector companies to deliver infrastructure projects or services, typically involving shared financing, risks, and rewards.

Special Purpose Vehicles (SPVs): Legal entities created specifically for a particular purpose, in this case likely to develop and operate individual renewable energy projects with defined ownership and financial structures.

IPP (Independent Power Producer): Privately-owned electricity generating facilities that sell power to the grid. South Africa's REIPPP program has brought numerous IPPs into the energy market since 2011.

BESS (Battery Energy Storage Systems): Large-scale battery installations that store electricity when generation exceeds demand and release it when needed, helping to stabilize the grid, especially with intermittent renewable sources.

Gigawatt (GW): A unit of power equal to one billion watts. For context, 1GW of generation capacity can typically power around 650,000-700,000 South African homes.