South Africa just energy transition: can Eskom’s crisis become a trillion-rand opportunity?

Wednesday 3rd December 2025

by inAfrika Newsroom

South Africa just energy transition has moved from a climate slogan to a balance-sheet issue for every major business in the country. Eskom plans to cut coal capacity from around 39 GW to 18 GW and ramp up renewables to about 32 GW by 2040, while still carrying roughly R400 billion in debt and a legacy of load-shedding. At the same time, multilateral lenders have approved large reform loans for energy and freight, and government has signalled more than R1 trillion in infrastructure spend over three years. The stakes are clear: if South Africa just energy transition works, it can unlock a decade of investment; if it stalls, it will keep throttling growth.

Why South Africa’s energy pivot now drives the growth story

For years, the power debate focused on keeping the lights on. Now it centres on whether South Africa can rebuild its growth engine. Persistent power cuts, weak rail and congested ports have shaved points off GDP and hit mining, manufacturing and autos. Every serious macro forecast now treats energy reform as the main upside or downside risk.

Eskom’s transition plan sits at the heart of this pivot. The utility intends to retire older coal units, repower some stations with renewables or gas, and build new solar, wind and storage to reach roughly 32 GW of clean capacity by 2040, cutting coal’s share sharply over time. The Komati Just Energy Transition Project is the first test: a 990 MW coal plant is being decommissioned and repurposed as a renewable and battery hub with local economic projects attached.

Financing signals have also shifted. The World Bank’s US$1.5 billion policy loan backs structural reforms in energy and freight rather than a single project, while parallel support from the African Development Bank pushes combined programme funding close to US$3 billion. This does not fix Eskom’s balance sheet on its own, but it shows that global capital will still back South Africa just energy transition if it sees a credible path.

Where South Africa just energy transition creates bankable deals

The most visible opportunity lies in utility-scale generation. As the grid opens, independent power producers are lining up solar, wind and battery projects to sell into a restructured transmission system. For banks and institutional investors, these projects offer long-dated, often inflation-linked cashflows similar to earlier renewables rounds, but now with far higher stakes for national reliability.

Transmission and distribution upgrades are the second major frontier. New lines to connect renewable-rich provinces, grid reinforcement near metros and smarter distribution networks will require tens of billions of rand. These assets behave like classic infrastructure with regulated returns. The reform loans explicitly target transmission performance and private participation, making this one of the most important—and least understood—asset classes in the transition.

Coal-belt regions add a third layer of opportunity and risk. Komati is the template for turning legacy coal sites into clean-energy, agribusiness, manufacturing and training clusters. Similar packages are expected at other plants, blending social plans with new industries. These clusters can create structured pipelines of smaller, diversified projects in areas where banks already know clients, land and politics.

Finally, freight and logistics reform intersects directly with South Africa just energy transition. Transnet’s rail and port backlogs have forced exporters onto roads, raising costs and emissions. The same reform packages that support the power sector also target rail recovery and port modernisation. As key corridors stabilise, they will support new logistics parks, industrial real estate and export-focused manufacturing that depend on reliable, cleaner power.

What CEOs, policymakers and investors must align on

For corporate leaders, South Africa just energy transition is now a board-level agenda item. Power constraints shape expansion plans, input costs and ESG ratings. Large users need integrated strategies that blend on-site generation, wheeling deals, efficiency upgrades and participation in new IPP rounds. Waiting for Eskom alone to solve supply is no longer a realistic option.

Banks need to shift from seeing the transition as mainly a credit risk to recognising it as a diversified asset base. Eskom’s debt is a problem, but the broader ecosystem of IPPs, grid SPVs and repurposed sites offers multiple counterparties and revenue streams. Lenders should build specialised project-finance teams, refine risk models for renewables and grid assets, and design instruments that match 15–20-year asset lives. Blended finance from DFIs can de-risk early projects, but domestic institutions will ultimately carry most of the exposure.

Policymakers must keep reforms predictable and transparent. Grid access rules, tariff paths, procurement frameworks and social-transition plans all require clarity. Mixed signals raise the risk premium on every project. Clear timelines for coal decommissioning, regular auction schedules for renewables, and well-defined private roles in transmission and distribution will do more for investment than any new slogan.

If South Africa can align these pieces, South Africa just energy transition may turn a decade of load-shedding into a long-run competitiveness dividend: cheaper, cleaner power, stronger trade corridors and a deep pipeline of investable projects for pensions and banks. If it fails, the country risks locking in stagnation. The window for turning crisis into a trillion-rand opportunity is open—but it will not stay open indefinitely.