City of Ekurhuleni moves to unlock private energy investment through IPP programme
CoE has unveiled a new energy initiative expected to attract R16bn in private investment to improve electricity security and support economic growth across the metro.
The City of Ekurhuleni has taken a significant step towards reshaping South Africa’s energy landscape through a new initiative aimed at attracting private investment into electricity generation and improving energy security.
Ekurhuleni Mayor Nkosindiphile Xhakaza announced an engagement with 75 appointed independent power producers (IPPs) and stakeholders held at Birchwood Hotel & OR Tambo Conference Centre on May 14.
The engagement focused on the city’s newly approved Escrow Account, which will provide a legal and financial framework to unlock large-scale private-sector investment in municipal energy infrastructure.
Addressing stakeholders, Xhakaza said the city has deliberately positioned itself as an active participant and leader in the transformation of the country’s energy sector.
“The Escrow development creates a secure and bankable payment structure that gives confidence to financial institutions, investors and project developers to fund long-term electricity generation projects within our metro,” said Xhakaza.
He explained that, for the first time, IPPs will have a sustainable framework to access project finance and begin implementing electricity generation facilities that will supply power directly into the city’s network.
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The city’s IPP pipeline is expected to unlock an estimated R16b investment package, allowing the metro’s electricity supply to be 30% independent of Eskom.
Currently, the city manages an electricity bulk purchase portfolio of nearly R20b annually, with Eskom remaining its sole supplier of bulk electricity.
According to Xhakaza, diversifying energy sources is necessary to improve resilience, enhance pricing competitiveness and reduce long-term procurement risks.
The introduction of IPP is expected to support industrial productivity, infrastructure reliability and economic growth across the metro.
“Reliable energy supply remains one of the most important drivers of industrial productivity, investment attraction and economic expansion.
“Ekurhuleni is the industrial heartland of South Africa, and our ability to sustain manufacturing output, logistics operations, commercial development and township economic growth depends heavily on energy availability and infrastructure reliability,” Xhakaza said.
The mayor added that the initiative would also strengthen the city’s financial position by improving revenue collection certainty and increasing electricity sales linked to broader economic activity.
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Council’s approval of the Escrow Account further responds to Eskom’s requirement for security deposits on large power-user connections. Under the new framework, qualifying large power users will bear the financial burden of these deposits, rather than the municipality.
Xhakaza said the programme forms part of the city’s broader vision of transforming Ekurhuleni into an energy-secure, investment-ready and economically competitive metro.
“As we declared earlier this year, 2026 is the year to fix local government and transform the economy in the City of Ekurhuleni.
“We are fixing the frontlines of service delivery, rebuilding governance systems and restoring investor confidence in the capability of local government to lead development,” Xhakaza emphasised.
The City of Ekurhuleni said collaboration between government, business, financial institutions and energy partners will be key to the successful implementation of the programme.
According to Xhakaza, this implementation will improve service delivery, as electricity might be cheaper, and will bring about temporary and 600 permanent job opportunities for the youth, counteracting the ever-increasing unemployment statistics.
