Eskom has started construction of a 75 MW solar PV project alongside its Lethabo coal-fired power station in the Free State, which is expected to generate some 147 GWh yearly once at full production.

The State-owned company said in a statement that the R1.2-billion project formed part of a “construction‑ready pipeline” of at least 2 GW of renewable energy and pumped storage projects to be progressed during 2026.

“Funding for these projects has been provisioned within Eskom’s approved capital expenditure programme and will be financed through on‑balance sheet funding, in line with National Treasury debt relief conditions, without reliance on additional project finance borrowing,” Eskom said in a statement.

The State-owned utility is trading under a R232-billion debt-relief package extended to it by the National Treasury, the terms of which have hitherto restricted Eskom from undertaking new generation projects.

Eskom group executive for renewables Rivoningo Mnisi also described the sod turning as a significant milestone for Eskom Green, which is being set up as a standalone Eskom subsidiary to diversify the group’s generation mix away from coal and support South Africa’s Just Energy Transition.

Another 17 high‑priority projects had been identified for implementation across Eskom’s existing coal‑fired power station footprint, with construction expected to commence between now and 2028.

The projects, Eskom said, were expected to deliver approximately 6 GW of new capacity by 2030 and could be located at Arnot, Duvha, Majuba, Tutuka, Komati, Kendal, Kusile, Hendrina, Camden and Grootvlei.

“By leveraging existing power station infrastructure, this [Lethabo] project demonstrates the practical integration of renewable-energy technology within our existing coal-fired power station fleet infrastructure and signals Eskom’s continued commitment to strengthening security of supply while transitioning toward a lower-carbon future,” Mnisi said. 

However, Eskom Green also planned to expand into new geographic and technological opportunities and planned to pursue partnerships, co-development opportunities and strategic acquisitions. 

The proposed funding framework, Eskom said, would ensure limited recourse to its balance sheet using project finance principles for the renewable-energy projects through dedicated project special purpose vehicles. 

“This will lead to the advancement of Eskom’s pipeline of more than 32 GW of cost-competitive renewable-energy and storage projects by 2040 to diversify its energy mix as part of the emissions reduction strategy and enable customers to decarbonise over the life of their operations.”

Eskom had not partnered on the Lethabo project, however, and it did not immediately respond to questions about whether the project had secured a budget quote for the grid capacity it would use.

In light of South Africa’s current grid constraints concern has been raised about the prospect of grid capacity linked to existing power stations being immediately transferred to Eskom for its own renewables projects.

Critics have suggested that this could amount to anti-competitive behaviour, and could run counter to Eskom and the National Transmission Company South Africa’s commitment to fair, transparent, and open grid access.

During a recent presentation, Eskom Green GM for business development Khutso Sekgota said the entity welcomed the shift to a rules-based competitive electricity supply industry and insisted that it would receive no preferential treatment in relation to compliance with grid access rules, market codes and competition laws.