Electricity traders are emerging as a central mechanism through which privately developed generation projects reach financial close in South Africa with new data suggesting that aggregated trading structures are increasingly reshaping project bankability.
The findings are part of the Policy to power: Ten actions to deliver green, accessible and secure electricity report released by the South African Electricity Traders Association (SAETA) together with research firm Krutham on February 17.
According to the report, 2,6 GW of independent power producer projects linked to licensed traders have reached financial close, representing 56% of all privately contracted power projects concluded over the past three years. Most of these projects reached financial close within the past year, pointing to accelerating activity in trader-led procurement structures.
“Our report shows that traders are already active. This is not a future state,” said Matthew le Cordeur, Research Manager for Infrastructure and Just Energy Transition at Krutham.
Data collected from eight of South Africa’s 21 licensed traders indicates a marked shift from single private offtaker arrangements in 2023 towards aggregated trading models by 2025. The report also highlights a pipeline of roughly 18 GW of registered private generation projects, underscoring growing investment momentum amid ongoing electricity market reforms.
SAETA Chair and PowerX Energy representative Khaya Mbatha said traders are increasingly acting as an intermediary across the electricity value chain, purchasing power from generators and supplying it to multiple buyers.
“This creates a market with traders already demonstrating value in the current bilateral trading environment,” Mbatha added. “Traders are expected to play a larger role as wholesale market reforms are implemented.”
The report attributes improved bankability to the ability of traders to pool demand from multiple customers while absorbing pricing and volume risks that single buyers often struggle to manage. By diversifying offtake risk, trader-led procurement structures can lower financing uncertainty and reduce reliance on state-backed guarantees, enabling greater participation by private capital.
Head of Trading and Co-Founder of NOA Group Andrew Taylor said the evolution of trading models reflects broader reform progress but warned that implementation remains the decisive challenge.
“The challenge today is no longer policy intent. The challenge is now one of delivery,” Taylor said.
Industry stakeholders noted that the findings suggest electricity traders are evolving into a core pillar of South Africa’s future electricity market as wholesale market reforms continue to take shape.
