Eskom has secured the government approvals it needs to establish Eskom Green as a wholly owned subsidiary able to raise its own funding, in a key milestone in the utility’s long-running unbundling programme.
The approvals, granted in terms of section 54(2) of the Public Finance Management Act read with the conditions of the Eskom Debt Relief Act, clear the way for the state-owned power utility to house its renewable energy business in a separate company – and, crucially, to fund it without leaning on Eskom’s constrained balance sheet or the national fiscus.
Eskom said on Thursday that the final steps to implement the subsidiary are now under way. When it launched Eskom Green last month, the utility said the unit would be separated into a wholly owned subsidiary with an independent board, subject to governance, regulatory and shareholder approvals – the hurdle that has now been cleared.
Eskom Green is targeting the delivery of up to 32GW of utility-scale renewable energy by 2040. That’s about a third of the 102GW that the 2025 Integrated Resource Plan says South Africa needs by 2042 – a point group CEO Dan Marokane was at pains to emphasise, saying the target “still leaves over two-thirds of the renewable energy generation opportunities open to the private sector”.
The remark speaks to criticism from independent power producers, who have questioned whether a state-owned generator should compete in renewables while a sister Eskom company operates the national grid. Eskom said the new subsidiary “does not assume any policymaking, regulatory or market-operation functions” and that its establishment is intended to complement, not duplicate or conflict with, the mandates of other public institutions in the energy sector.
‘Important milestone’
Board chairman Mteto Nyati has previously argued that without a renewables business, there would be no Eskom in 40 years’ time.
“This is an important milestone in the further implementation of Eskom’s strategy in the areas of unbundling, delivering utility-scale renewable energy capacity and reducing carbon emissions and other air pollutants,” said Marokane.
Central to the structure is a project finance model in which individual projects are housed in special purpose vehicles, with debt, liabilities and risks ring-fenced at project level. Eskom Green’s exposure to any project will be limited to its committed equity, with limited recourse to the Eskom holding company’s balance sheet – an approach designed to satisfy the conditions attached to national treasury’s R254-billion debt relief package, which restricts Eskom’s ability to take on new borrowings.
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“Eskom Green can now crowd in external capital and expertise and enables private sector investors to be able to partner and invest with Eskom Green and utilise our experience and skills to deliver very compelling and competitive utility-scale renewable energy supply offerings to customers,” said Rivoningo Mnisi, group executive for Eskom renewables.
The company said Eskom Green will initiate a market process to establish a panel of strategic partners to support project delivery. Its mandate also includes repowering and repurposing coal-fired power station sites as they are decommissioned, to support economic activity and jobs in affected regions – an area where Eskom’s track record, notably at the now-closed Komati plant in Mpumalanga, has drawn criticism for slow progress. Mnisi has previously told TechCentral that a solar and battery hybrid at Komati is next in the pipeline after the Lethabo solar project, which broke ground in May.
Eskom launched the Eskom Green brand last month; Thursday’s approvals allow the entity to be formally incorporated and capitalised. The utility did not say how much initial capital the subsidiary will receive or when its first projects will reach financial close. — © 2026 NewsCentral Media
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