Cape Town seals first agreements to buy power at below Eskom rates

Cape Town seals first agreements to buy power at below Eskom rates

31 August 2026

Cape Town Mayor Geordin Hill-Lewis says the City has concluded its first power purchase agreements as it buys up to a total of 200MW from independent producers at cheaper rates than Eskom. Cape Town is the first South African city to reduce Eskom reliance by buying power on the open market as the metro works to secure more affordable power sources for Capetonians.

The City today marked the conclusion of two power purchase agreements worth 70MW, with more to follow in the coming months under a competitive tendering process for up to 200MW. The 20-year Power Purchase Agreements (PPAs) are with solar plants that will be connected to the City’s grid in Atlantis (30MW from JEMPEC), and Philippi (40MW from Make A Difference LLC).

eskom3

‘Families cannot be expected to absorb endless Eskom price increases forever – that’s why we are working to end reliance on expensive Eskom power to make electricity more affordable for Capetonians. We are pleased to have sealed the first two power purchase agreements with solar plants here in Cape Town – a first for any South African city - with plans to buy up to 700MW of independent power over time,’ said Mayor Hill-Lewis.

eskom

The two agreements are cheaper than Eskom, with the City saving 19 – 21% on power purchases compared to current Eskom rates. Importantly, price increases on these agreements will be linked to the Consumer Price Index (CPI), rather than unpredictable Eskom hikes over the next 20 years. A total of R8bn in power is expected to be procured between the two agreements, which require all of this to be below-Eskom-rates over the full 20 years.

 

eskom4

Alderman Xanthea Limberg, Mayoral Committee Member for Energy, said the agreements will also avoid nearly two million tonnes of carbon emissions, earning the City carbon credits, which can be traded on the open market to generate funds for more infrastructure investment. Cape Town has already generated R36m in carbon credits via municipal waste-to-energy initiatives that reduce gas emissions at landfill sites.

 

eskom2

With these initial power purchases, we are laying the foundations for a more sustainable and scalable generation programme. This is all made possible by the diligent creation of an entirely new procurement framework for independent power to ensure robust, bankable, successful execution and long-term power delivery to the City,’ said Alderman Limberg.

Cape Town leading on energy security

Besides these power agreements, Cape Town is also South Africa’s first city to achieve various other pioneering energy security milestones over the current municipal term, including:

  • Enabling Capetonians to earn cash for power, with residents and businesses earning R67 million from selling 150 gigawatt hours of their excess solar power back to the City in exchange for municipal bill credits and cash since June 2024.
  • Introducing energy trading that is ‘wheeled’ across the City’s grid, with over 1 700 megawatt hours of power traded between power producers and consumers since 2024.
  • Completion of the City’s first own-built solar and battery energy storage plant in Atlantis totalling 7MW PV plus 10MWh battery storage, alongside plans for further utility scaled own-built renewable projects and refurbishments of existing plants.
  • A large-scale energy procurement programme that seeks to buy electricity from Energy Traders and Independent Power Producers, including technologies such as waste-to-energy, further promoting carbon neutrality and a circular economy.
  • Successfully mitigating 24% of load-shedding during the extended Eskom generation crisis period – the only city to do so.

    

Caption

  1. Seated: Photo 1

From left: Tshilidzi Ramunenyiwa (IPP: Jempec); Isaac Mmushi (IPP: Jempec); Jeffrey Mulabisana (Chief Executive Officer, IPP: Jempec); Aderman Xanthea Limberg, Mayco Member for Energy; Cape Town Mayor Geordin Hill-Lewis; Luyolo Ngcuka (IPP: Jempec); Walt Teter (Managing Director, IPP: MAD); Wayne Morris (Director, IPP: MAD); Ian Funeka (Director, IPP: MAD)

  1. Standing: Photo 2

Cape Town Mayor Geordin Hill-Lewis, with Alderman Xanthea Limberg, together with his City Energy Team as well as representatives from Jempec and MAD commemorates the milestone of Cape Town appointing its first Independent Power Producers to buy power at below Eskom rates over time.

  1. Photo 3: From left, Jeffrey Mulabisana (Chief Executive Officer, IPP: Jempec) and Cape Town Mayor Geordin Hill-Lewis.
  2. Photo 4: From left, Walt Teter (Managing Director, IPP: MAD) and Cape Town Mayor Geordin Hill-Lewis.

End

 


Back to All