South Africa’s Energy Future Depends on Investor Certainty, Says Renewable Energy Expert
South Africa’s Energy Future Depends on Investor Certainty, Says Renewable Energy Expert
As pressure mounts on the country’s transmission and distribution systems amid growing renewable energy investment, Oosthuizen believes public-private partnerships (PPPs) could play a decisive role in unlocking urgently needed grid infrastructure, if structured correctly.
“Investors do not require ownership, they require certainty,” Oosthuizen said in remarks addressing the future of wheeling infrastructure and private-sector participation in South Africa’s electricity market.
According to Oosthuizen, the most realistic model for South Africa involves the state retaining ownership of strategic grid assets while allowing private investors to finance, build, and operate infrastructure under long-term concession agreements.
He argues that the country already has significant local and international investor appetite for energy infrastructure projects, particularly from pension funds and infrastructure-focused capital pools seeking long-duration, stable-return assets. However, that appetite remains conditional.
“The short answer is yes,” he said regarding investor interest. “But appetite depends on revenue predictability, regulatory stability, and protection against retrospective policy changes.” South Africa’s wheeling market, which allows electricity generated by private producers to be transmitted across existing networks to customers in different locations, has expanded rapidly in recent years as businesses seek alternatives to unreliable supply and escalating power costs.
Oosthuizen warns that several structural and regulatory gaps continue to undermine momentum.
Among the key concerns are:
- The absence of standardised wheeling agreements
- Unclear rules governing private investment in grid infrastructure
- Inconsistent municipal approaches to wheeling
- Unpredictable approval timelines from regulators.
He also identified the fragmentation between Eskom and municipal electricity distributors as one of the biggest obstacles to scaling wheeling projects nationally. “The structural disconnect between Eskom’s transmission network and municipal distribution systems remains a major barrier to wheeling at scale,” Oosthuizen said.
While some critics argue that PPP frameworks in South Africa are too slow to respond to the urgency of the energy crisis, Oosthuizen believes practical solutions already exist. He points to hybrid PPP models, phased implementation strategies, and standardised project documentation as mechanisms that could significantly accelerate infrastructure rollout.
He also stressed that Development Finance Institutions (DFIs) should focus on reducing risk rather than replacing private investment. “The role of public capital is to unlock private capital, not replace it,” he said, advocating for tools such as first-loss capital structures, construction guarantees, and political risk cover to improve project bankability.
Oosthuizen warned that poorly structured projects continue to repeat common mistakes, including overreliance on volumetric revenue models, unrealistic development timelines, and assumptions that policy frameworks will eventually align with commercial agreements.
Despite these challenges, he remains optimistic that South Africa has both the expertise and capital needed to modernise its electricity infrastructure. “I believe there is a significant pool of skills and knowledge within both the private and public sector that would enable us to move forward and build the grid together,” he said.
As South Africa accelerates its energy transition and grapples with the demands of a rapidly changing power market, the success of future grid expansion may ultimately hinge on one issue above all others: trust that the rules of the game will remain stable long enough for investors to commit billions to the country’s energy future.