eThekwini has become the first South African metro to receive ministerial approval to procure new electricity generation capacity directly from independent power producers (IPPs).
Electricity and Energy Minister Kgosientsho Ramokgopa has authorised the city to proceed with its IPP programme, which will add 400 MW to the local grid, 100 MW from solar PV and 300 MW from gas-to-power.
The Section 34 determination, approved by the National Energy Regulator of South Africa following public participation earlier this year, allows the municipality to move to the request for proposals (RFP) stage. According to the city, the programme is expected to reduce eThekwini’s reliance on the national grid by 18%, mitigating up to Stage 3 load shedding once operational.
The council began developing its energy strategy in 2021, issuing a technology-agnostic request for information for 400 MW in July that year. The business case received KwaZulu-Natal provincial and National Treasury approval in 2022. “Our energy strategy is embedded in our Integrated Development Plan (IDP), which is a legislated planning and performance management instrument. The inclusion of our energy mix in the IDP ensures that our power procurement is directly tied to broader development outcomes, job creation, economic growth, climate change and spatial transformation,” eThekwini Municipality Mayor Cyril Xaba says.
Procurement will be phased. The RFP for solar PV is planned for December 2025 with construction targeted for completion by September 2027. The gas-to-power RFP will follow in 2026.
Preliminary modelling indicates that the programme could save the municipality approximately R5 billion over the duration of the power purchase agreements or about R250 million annually. The city estimates the projects will attract R8.5 billion in private investment, create around 2 200 jobs during construction and operation, and avoid 250 000 tonnes of CO₂-equivalent emissions each year.
