Our innovative funding approach is supporting independent sustainable energy trading while giving South Africa more reliable electricity.
Electricity generation in South Africa is unreliable due to ageing coal plants and lack of power generation infrastructure, and rising demand is putting pressure on an already fragile system. However, recent regulatory changes mean that privately-owned companies can sell electricity directly to commercial customers. The process is called ‘wheeling’. It means the electricity is physically transmitted through the national grid (managed by the state-owned utility, Eskom), but the energy itself is bought and sold through separate contracts.
In 2024, we announced a partnership with GuarantCo, part of the Private Infrastructure Development Group, to provide $50 million each of guaranteed finance to Etana Energy, a South African energy trading company. Etana will use the funding to buy clean energy from independent power producers (IPPs), giving them the confidence to launch new renewable energy projects with the reassurance that their electricity will be sold to businesses needing a reliable or sustainable energy supply. The guarantee facility will help add around 500MW of competitively priced renewable energy (wind and solar) to South Africa’s grid over the next few years.
The $100 million is expected to unlock an estimated $500 million of new renewable energy projects. It will ease pressure on the national grid and boost South Africa’s green energy transition, underlining the UK’s support for South Africa’s Just Energy Transition Partnership.
