Eskom Signs New Land Leases to Unlock R40bn Investment in Renewables

J Mkhwanazi

We welcome the recent agreements Eskom concluded with four independent power producers for the commercial lease and use of land at its Majuba and Tutuka power stations in Mpumalanga. This is the first batch of lease agreements Eskom has signed with private companies to develop renewable power projects on land around its power stations.

The successful bidders HDF Energy SA, Red Rocket SA, Sola Group and Mainstream Renewable Power Developments SA are expected to invest about R40bn to develop this "first tranche" of private renewable energy projects on Eskom-owned land. These investments will take place in Mpumalanga, adjacent to existing coal-fired power stations and will put together an energy mix for South Africa that is sensible and will create jobs by generating clean energy in Mpumalanga.

Eskom owns about 36,000 hectares in the province and this first round of bidding made available several parcels of land amounting to about 6,000 hectares. The four investors will lease 6,184 hectares for 25 - 30 years each and contribute at least 2,000 MW to the national electricity grid.

The companies are given access to the land on a "use it or lose it" basis, and should they fail to reach certain development goals within a three-year period, the land will be taken back by Eskom.

Such developments should be appreciated and applauded if they serve to move us forward as a country.