Eskom to lease land for Renewable Energy Projects

Eskom CEO Andrè de Ruyter says we hope to sign the land lease agreements with the successful bidders by August

In a bid to reduce power cuts, South Africa’s power utility, Eskom Holdings on Thursday said that it selected 18 companies to lease land for the development of renewable energy projects.

Eskom in December announced plans to lease portions of its land in Mpumalanga to potential renewable energy projects to help bolster generation capacity. The land is close to transmission lines, which ensures grid access for the projects. Eskom launched the tender process in April.

The initiative leverages off regulatory changes, allowing licence exemptions for generation facilities of up to 100 MW.

In a statement, Eskom said that none of the contracts had been signed, as the companies need to obtain environmental impact assessment clearance.

"The companies cannot be named, as no contracts have been signed as yet. Eskom will make an announcement of the successful companies once all the processes have been finalised," the statement read.

The bids will cover 4 000 hectares of land, out of a total 36 000 hectares that are available.

"The current projects will bring online a total of 1 800MW generation capacity, once connected," the statement read.

"We hope to sign the land lease agreements with the successful bidders by August," said Eskom CEO Andrè de Ruyter.

"This shows what can be achieved with reduced red tape and the impact of the liberalisation of the energy sector. This additional capacity will be added to the grid without any cost to the taxpayer."

Eskom is set to earn some income from the leasing of land. The projects will also enter into sale agreements for the electricity with third parties.

Eskom is currently implementing Stage 2 load shedding due to breakdowns of generation units which are constraining the grid.