The eThekwini Municipality Mayor Cyril Xaba says the approval for the development of a new electricity generation capacity, marked a critical milestone in the city’s energy roadmap, aimed at diversifying energy sources, reducing reliance on the national grid, and improving energy security.
The municipality has become the first metro in South Africa to receive ministerial approval to procure new electricity generation capacity directly from Independent Power Producers (IPPs), in what Xaba calls a “precedent-setting moment” for municipal-led energy transition.
Electricity and Energy Minister Kgosientsho Ramokgopa has authorised the city to move ahead with its Municipal Independent Power Producer Procurement Programme (MPPPP), which will add 400 megawatts (MW) to the local grid — 100MW from solar PV and 300MW from gas-to-power.
“We are not only celebrating the decision by the Minister of Electricity and Energy to authorise the city to develop new electricity generation capacity, but we are also affirming our commitment to lead South Africa’s energy transition in a way that is secure, inclusive, and sustainable.
“We are excited that we are the first metro in the country to receive this determination from the Minister to procure new electricity generation capacity directly from Independent Power Producers (IPPs). This is a precedent-setting moment that reinforces the constitutional role of municipalities in ensuring they deliver quality services,” Xaba said.
Energy roadmap and milestones
In line with its energy strategic road map, the municipality launched its energy strategy in 2021, to respond to the national energy crisis.
As a result, the council resolved to initiate its own electricity procurement programme, through the Municipal Independent Power Producer Procurement Programme (MPPPP).
Xaba noted that the decision was driven not only by necessity, but by a forward-looking vision of building a decentralised, diversified, and resilient municipal energy system.
“By July 2021, we issued a technology-agnostic Request for Information (RFI) to the market, targeting 400 megawatts (MW) of renewable energy. This move allowed us to engage industry stakeholders, assess investment appetite, and lay the groundwork for meaningful public-private partnerships.
“A year later, our 400 MW business case received full endorsement from the KwaZulu-Natal Provincial Government. Subsequently, the National Treasury approved the project, positioning eThekwini as a national pioneer in municipal-led power procurement,” Xaba said.
The municipality convened the first Energy Transformation Summit in 2023, with key public and private stakeholders, reaffirming their commitment to a reliable, low-carbon, inclusive energy future.
A Section 34 Determination application was formally submitted and received the full attention of the Minister, and by October 2024, the Minister issued the draft Section 34 determination to National Energy Regulator of South Africa (NERSA), which launched public participation in March 2025.
Section 34 Determination outlines the procurement of new electricity generation capacity or transmission infrastructure to ensure a reliable electricity supply. NERSA then reviews the determination and provides its concurrence (or not) based on its regulatory mandate.
The final approval of the Ministerial Determination gives the city the green light to move to the next phase of the Request for Proposals (RFP).
According to the municipality, the programme will allow the eThekwini Municipality to procure 400 MW of new generation capacity (100 MW Solar PV and 300 MW Gas to Power (GTP), with a focus on dispatchable, reliable, and low-carbon energy technologies.
“Our energy strategy is embedded in our Integrated Development Plan (IDP), which is a legislated planning and performance management instrument. The inclusion of our energy mix in the IDP ensures that our power procurement is directly tied to broader development outcomes, job creation, economic growth, climate change and spatial transformation,” the mayor emphasised.
Xaba reassured the city’s ratepayers that the programme is financially sound, with preliminary modelling indicating that it would save the municipality approximately R5 billion over the duration of the Power Purchase Agreements (PPAs), translating to around R250 million in annual savings.
“These are savings we can redirect to the upgrading of infrastructure for basic services that will directly benefit our residents. Furthermore, this programme is catalytic as it is projected to unlock R8.5 billion in private investment and boost regional industrial activity.
“Most importantly, it will create an estimated 2 200 jobs during construction and operation phases. This initiative will also empower small businesses and promote inclusive enterprise and supplier development,” he said.
On energy security and environmental sustainability, Xaba said once fully operational, the new capacity will reduce eThekwini’s reliance on the national grid by 18%, significantly cushioning the city from up to Stage 3 load shedding.
“During this period our economy can stay productive, our hospitals, schools and police stations will continue operating without any disruption. The project supports both our Climate Action Plan and South Africa’s Nationally Determined Contributions (NDCs) under the Paris Agreement.
“It is expected to avoid 250 000 tonnes of CO₂ [carbon dioxide] -equivalent emissions annually, a significant step towards achieving a just transition and low-carbon emissions.”
Procurement rollout process
The mayor also highlighted that the procurement will be rolled out in phases, with the RFP for Solar PV planned to be issued in December this year, while the construction expected by September 2027.
“The Gas-to-Power RFP will follow in 2026 and the details of which will be communicated in due course. This staggered approach allows us to align with demand profiles, strengthen local capacity, and manage implementation risks responsibly,” the mayor explained. - SAnews.gov.za
