Eskom bets big on renewables with new ‘green' subsidiary

Daily Maverick

28-04-2025

Eskom, with its generation capacity historically dominated by coal technology, is making clear its intentions to enter and compete in the renewable energy sector with a planned new entity.
In a presentation to Parliament's portfolio committee on energy and electricity, Eskom shared more details about its strategy to be a player in the renewable energy sector.
The utility's executive was briefing members on their strategic corporate plan for 2025-2030, their shareholder compact for 2025-2026 and budget for 2025-2026.
Eskom board chairperson Mteto Nyati explained that one of the utility's four strategic objectives was to 'facilitate a competitive future energy industry'. As part of this, Eskom aims to significantly increase its renewable energy portfolio, committing to around 5.90GW of clean energy projects by 2030. A part of this objective includes the accelerated establishment of Eskom Green Co, the company's renewable energy business.
Eskom Green will be one of the four unbundled entities that will fall under the Eskom holding company. The other companies are National Transmission Company of South Africa, which is already a legal entity, National Electricity Distribution Company of South Africa and Eskom Generation, which are due to be legally separated next.
'We have embraced, as Eskom, the renewables agenda,' said Nyati. 'In the past, our strategy involved only us managing the current fleet and not participating in new generation capacity.
'That has changed. We are going to be participating in renewables in a big way, and we have already started to operationalise a business unit that makes us to be a relevant player within the space.'
Almost two weeks ago, Eskom issued an invitation to tender for 'firms with a proven track record in establishing renewable energy businesses' to help it start this process. It said the objective of Eskom Green Co would be to 'operate independently of the main Eskom entity to allow for greater governance agility, competitive market positioning and enhanced Public-Private Partnerships (PPPs)'.
Eskom, in a statement, said it had an 'executable initial pipeline' of at least 2GW of low and zero-carbon energy projects by 2026 and had developed a pipeline of more than 20GW of low and zero-carbon energy projects to diversify its energy mix. It plans to 'realise' roughly 5.9GW of renewable energy projects by the end of this decade.
At Friday's meeting, DA MP Kevin Mileham asked for more information about the proposed new entity.
'Why are we breaking out a new entity when it's clearly part of generation? It's a division of generation. It's not a new entity. I mean, nuclear is not an entity by itself. Coal is not an entity by itself. Why is Green Co or Eskom Green a new entity? Why is it going to have its own board of directors? Why is it going to have its own finance team? Why is it going to have its own legal team and HR team, and things like that?
'Aren't we just duplicating already existing personnel capacity infrastructure and therefore increasing our costs?'
In response, Eskom CEO Dan Marokane explained that the unbundling was an operationally motivated decision.
'I want to address the issue that deals with the structure of Eskom going forward, as to why are we having a separate green entity, why is it not within generation?'
'These are all aspects that are operational, that deal with how we bring into reality the strategic intent that we have. Our strategic intent is to unbundle to set up separate entities that will be efficient in their part of the value chain,' said Marokane.
The new green generation part of Eskom's business, he explained, 'is an entity that is required to enable us to unbundle the generation business in a manner that does not make us run the risk of losing all the licences. These are operational matters about structuring and how to set up these transactions in a manner that allows the realisation of the objectives.
'The renewables business is going to be a different business in terms of thinking. It will involve partnerships so that Eskom's balance sheet is not the only one that is exposed. We can't afford to go to the previous levels of debt. So we'll do business as a transaction with others, with their money, on our land, with our people, using our skills and choosing to de-risk those projects because it will be in a competitive world.
'So how it's structured needs to enable that kind of a setup in line with the mandates that we're seeking to have.' DM