State-owned electricity group Eskom, which is in the process of creating a renewable-energy subsidiary known as Eskom Green, has formally initiated a process to select partners for the financing and implementation of up to 6 GW of utility-scale renewable-energy and battery projects by 2030.

A request for qualification (RFQ) invitation has been released as part of a two-stage procurement process, with the second to involve a request for proposals (RFP) process involving the qualifying entities.

Released on October 2, the invitation has been issued by Eskom Holdings, but the State-owned enterprise indicates in the document that it intends transferring any transaction agreements to Eskom Green once it is incorporated.

Eskom Green, the RFQ states, is designed to operate as a commercially viable and investable renewable-energy platform, capable of mobilising private and public capital at scale through project-financed special purpose vehicles and strategic partnerships.

Through the RFQ process Eskom aims to identify entities for the establishment of a panel of pre-qualified co-development and co-investment partners for what Eskom terms the ‘Phase 1 Programme or the Projects’ with a combined capacity of up to 6 GW.

The projects themselves are not identified, but Eskom indicates that they have been drawn from a larger internal pipeline of solar PV, wind and/or battery storage projects with a combined capacity of 14 GW.

It adds that the associated sites, land rights, environmental authorisations and grid connection points are at varying stages of maturity.

Besides this pipeline, Eskom says it will also offer partners access to decades of power generation skills and expertise, efficient routes to market and offtake structuring, improved bankability, and access to private and concessional capital.

“In return, Eskom pursuant to the RFP process in due course, seeks a strategic partner who will bring proven development, financing and construction capability and who will support skills transfer and the building of Eskom's internal capability, once operational.”

Eskom says the Phase 1 Programme is aligned to the Integrated Resource Plan of 2025 which envisages 105 GW of new generation capacity by 2042, and Eskom’s ambition of achieving up to 32 GW of new renewables generation capacity by 2040.

Respondents to the RFQ are entitled to participate as a single entity or as a consortium, and Eskom states that it intends to introduce broad-based black economic empowerment participation at the RFP stage.

A non-compulsory clarification meeting has been scheduled for 11:00 on October 15, and the closing date for responses to the RFQ is 10:00 on November 16.

Procurement Framework?

The RFQ indicates that revenue under the Phase 1 Programme will be generated principally through long-term, bilateral private-market power purchase agreements with creditworthy counterparties.

However, it adds that revenue may also be derived from electricity sales under procurement programmes established pursuant to Ministerial determinations made in terms of Section 34 of the Electricity Regulation Act and associated offtake arrangements.

The RFQ was issued ahead of the release of a new Section 34 Determination by Electricity and Energy Minister Dr Kgosientsho Ramokgopa that will outline the additional generation to be procured between 2026 and 2037.

Under the Electricity Regulation Act, such gazetted determinations enable the procurement of new energy generation capacity.

In the renewables sector, the public procurement rounds that have arisen hitherto in response to such determinations have excluded Eskom and focused on opening the market to independent power producers.

However, on several occasions, Ramokgopa has argued that Eskom needs to play a role in the renewables sector, while Eskom chairperson Mteto Nyati has described the utility’s exclusion from the renewables market as a “wrong decision”.

Following his recent reappointment, Nyati indicated that, under the so-called Eskom 2.0 vision, the group would seek to secure its fair share of the renewables market.

Ahead of the announcement on the new Ministerial determination, the Department of Electricity and Energy indicated that it would include a diverse energy mix, incorporating wind, solar, battery energy storage, and gas-to-power technologies.

“The Minister will also outline the launch of a new multi-year procurement pipeline designed to provide the market with long-term visibility and stability.”