Welcome to Green Rising – The biggest advertisement for the energy transition in Africa is not found on a thermometer but in the form of a 102-year-old company in Johannesburg.

National utility Eskom is one of Africa’s oldest corporate entities, founded in 1923, and in an advanced state of decay.  

Last month, the South African dinosaur announced that power cuts are back once again – after a ten-month reprieve last year… confirming it as one of Africa’s most loathed firms.

(Oh, and guess what – at the same time Eskom proposed a 57% hike in electricity prices, though eventually it relented and settled for 12.7%.)

The root cause is insufficient – coal & diesel-fuelled – generating capacity and aging transmission infrastructure.

Necessary upgrades costing $12 billion are much delayed – because Eskom is struggling under a mountain of debts more than twice that size. 

Eskom has escaped mortality before. And the current crisis is so far less publicly painful than previous ones, which dominated international headlines. 

But the crux now is not customer frustration, though it’s growing. Customers are buying into off-grid solutions that mean they’ll never come. 

It’s not a row, it’s a break-up.

This has been visible in the residential market for a few years. Solar home systems are spreading faster than you can say “lekker, lekker, firecracker”. 

The same trend is now accelerating among commercial and industrial power users. The highest-paying customers are saying goodbye forever. 

Here is a small-print snapshot of just what’s happened in the past few weeks: 

• Richards Bay Minerals, a heavy mineral sands producer, has signed a 230 MW power purchase agreement (PPA) with independent power producer Red Rocket South Africa. This is RBM's third PPA bringing their total renewable energy capacity to 500 MW.

• Wood fibre products company Sappi Southern Africa and energy trader Enpower Trading have reached financial close on a five-year renewable energy PPA. The deal will see Sappi procure 175 GWh/year of energy from SolarAfrica Energy's 1 GW solar PV project.

• South Africa mining company Northam has finalised a 20-year PPA for a 140 MW Kareebosch Wind Farm. This is their second PPA, following the 80 MW solar agreement signed in October 2024. The independent power producer will wheel the power through Eskom's grid. 

• Digital infrastructure company Teraco has agreed to buy wind power from NOA, an integrated energy aggregator to power its data centres in South Africa. The deal is to complement its 120 MW solar plant under construction. The projects will be implemented in phases, with the first power delivery expected in 2026.

• South Africa Airports Company is seeking bids to install 9.5 MW of solar energy across airports in Johannesburg, Cape Town and Durban, paired with battery storage at sites in the Northern Cape, Kimberley & Western Cape. The company plans to reduce airport reliance on the grid.

There is more behind Eskom’s doom loop than tech change and slow investment. 

The recent history of Eskom is riddled with theft, sabotage, corruption, death threats and a general mafia culture across its ecosystem, including in the fuel supply. 

Middlemen are swapping coal for rocks, damaging critical systems, to steal fuel.

Between 2012 and 2018, Eskom reported $1 billion in “irregular expenditure”. 

Below is Dan Marokane, hired as CEO last year to clean house. 

Eskom’s most extraordinary contribution to public life is semantic. 

To this day, it euphemistically calls power cuts “load shedding”, in a further example of not facing up to responsibilities. 

The company frames its cascading failure as a preventive measure. Load-shedding normally means intentionally cutting off (abundant) electric current on certain lines to protect them in special circumstances. But for many South Africans, loads are shed daily.

In the meantime, investors are piling into off-grid solutions, usually powered by renewables. This includes a growing number of international investors. From the past few weeks: 

• South African lender Nedbank and Norway’s Norfund have acquired a minority stake in Pele Energy Group, injecting $31m to accelerate solar and battery projects. The deal follows a $135m structured loan, positioning Pele to target up to $162 million in additional funding by 2027.

• Dubai-based investment and advisory firm Averi Finance has acquired a 50% stake in Estonian renewable energy developer Salika SG, enabling it to control Salika SG's project portfolio, which includes planned developments of 3,000 MW of solar power and 850 MW of wind energy in South Africa.

• South Africa's National Energy Regulator has reported significant growth in the country's private energy sector. Renewables capacity nearly tripled in 2023. 

Eskom’s story is not unique. National utilities across the continent seem to be dying on their feet. 

• Kenya Power relies heavily on industrial customers for revenue (48%). But tariffs have increased by 35% over five years while offgrid solutions proliferated.

• The Ethiopia Electric Utility experienced a 61% drop in industrial collections for lack of modern metering, billing and payment systems.

• The World Bank outlined just how burdened by high debt levels and inefficiencies in capital expenditures African utilities are.

The economic impact of this dysfunction only strengthens the case for offgrid solutions. 

• Power cuts cost South Africa about $50 million per day.

• Over 50% of sub-Saharan African manufacturers own or share diesel generators.

• Power outages are estimated to cost African countries up to 2% of GDP.

No wonder renewables and mini-grids are surging. Africa's installed renewable energy capacity has doubled over the last decade. 

• In 2024, large-scale solar projects accounted for 72% of the newly installed capacity, a significant increase from 32.4% in 2023.

• South Africa added nearly half of the 5.5 GW of solar capacity installed in Africa in 2023.

• The continent hosts 60% of the world's best solar resources, yet only 1% of global solar capacity is installed here so far.

South Africans may be cursing Eskom. But the rest of us earthlings should be thankful for its dysfunction. 

To go deeper into Africa’s shifting energy landscape and the struggle facing its utilities, click here.

Number of the week 

…is the drop in Ghana's cocoa yields, attributed mainly to a rise in illegal gold mining. Farmers are abandoning cocoa cultivation for more lucrative gold mining, a shift driven by central bank purchases, geopolitical tensions, US debt concerns, inflation and a trend toward de-dollarisation. Environmental impact is severe, often rendering soil and water unusable for cocoa production.

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