AEF outcomes: Powering South Africa's energy transition
Image: Freepik
Last month, Cape Town hosted the Africa Energy Forum (AEF) for the first time in its 27-year history – a significant milestone for South Africa's growing role in shaping the continent's energy future.
As the global investment meeting for Africa's power, energy, infrastructure and industrial sectors, AEF brought together heads of state, ministers, policymakers, utilities, development finance institutions (DFIs) and private sector stakeholders. While the forum celebrated just how rapidly South Africa's energy market is maturing, it also highlighted the critical work that is still required to unlock its full potential.
The industry's maturity is reflected in the growing number of trading licences being issued, as the sector shifts towards a competitive wholesale trading environment. South Africa's public procurement programme continues to serve as a blueprint for success, underpinned by a transparent and consistent auction process. While technology advancements enable more competitive pricing and improved system reliability, new risk management mechanisms – such as insurance products and credit guarantee vehicles – are enhancing project viability and attracting larger funding volumes.
Further progress, however, will depend on the availability of adaptable financial structures. There is a growing need for instruments that can support projects with multiple offtakers or staggered power purchase agreement tenors, while maintaining appropriate risk allocation. DFIs remain essential in this space, not only by providing security packages for senior lenders, but by enabling project preparation in the early stages.
Despite growing investor confidence, structural challenges persist. Grid infrastructure remains a core constraint for Independent Power Producers (IPPs). Until this is addressed, it will continue to limit how quickly new projects can be delivered. In the near term, implementing a curtailment framework would allow developers to proceed with projects in grid-constrained areas, with output managed while the necessary transmission infrastructure is rolled out.
Permit delays are another concern. Although Environmental Authorisations are guided by a national legislative process, local capacity constraints can result in inconsistent turnaround times, creating significant delays in some jurisdictions. As demand increases, the availability of experienced construction partners will be a key factor in the sector's ability to execute projects at scale.
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Nevertheless, the outlook remains positive for South Africa. In the next five years, we'd like to see a vibrant market with a day-ahead trading environment and several IPPs, including Mulilo, managing portfolios of 5 GW or more. We also hope to see an increased number of renewable energy professionals and expanded human resource capacity to support the sector. Continued collaboration between government and the private sector, through platforms such as the Energy Council of South Africa, will be central to achieving this.
AEF 2025 confirmed what many in the sector already knew: South Africa has the potential to lead Africa's energy transition. With the right partnerships, policies and investment, the sector can go beyond energy security at home; it can deliver scalable, bankable solutions for the continent.
Stuart MacWilliam, Chief Development Officer at Mulilo
Image: Supplied
Stuart MacWilliam, Chief Development Officer at Mulilo.
*** The views expressed here do not necessarily represent those of Independent Media or IOL.
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