NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Remeredzai Joseph Kuhudzai

Last year, the threshold for companies in South Africa to produce their own electricity without a license was increased from 1 MW to 100 MW. The new threshold was introduced to catalyze private sector investment into the electricity sector. This move will go a long way in supporting energy users’ power demand and reducing customers carbon footprint.

The private sector is already taking advantage of the new legislation. Since the legislation was passed in August 2021, the first two registered 100 MW energy projects have reached financial close. SOLA Group and African Rainbow Energy reached financial close on 200 MW solar PV projects for Tronox Mineral Sands. The financial close of the projects happened less than 6 months after the power purchase agreements were signed in March 2022. SOLA’s in-house engineering, finance, and project development capabilities have helped to accelerate the conclusion of the deal. The SOLA Group is a vertically integrated Independent Power Producer and one of the leaders in the supply of clean energy solutions to private companies in Africa.

Photo courtesy of Lukas Bato.