In a landmark decision aimed at improving energy security and service delivery, the eThekwini Municipality has been granted approval to generate its own electricity. The announcement was made by South Africa’s Minister of Electricity and Energy, Dr. Kgosientsho Ramokgopa, during a media briefing on the outcomes of the municipality’s application.
A Major Step Toward Energy Independence
Minister Ramokgopa hailed the approval as a “single biggest consequential intervention” in local government’s electricity sector, emphasizing that eThekwini is now the first—and currently only—municipality in South Africa to be granted such a determination under the Electricity Regulation Act.
“This is a template for other municipalities to follow,” Ramokgopa stated. “If they don’t move with the same urgency, they risk losing their best consumers to private generators, which could collapse their revenue streams.”
Financial and Infrastructure Benefits
The minister explained that the municipality would be able to leverage bilateral agreements with power off-takers to raise capital in debt markets, funding the initiative through special purpose vehicles. The additional revenue generated from this project is expected to be reinvested in critical social infrastructure, including roads and clinics.
“We are enhancing their balance sheet,” Ramokgopa said. “This will allow them to reallocate funds to improve service delivery while contributing to a just energy transition.”
Warning to Other Municipalities
Ramokgopa issued a stark warning to other municipalities, stating that private electricity providers are already securing contracts with high-value consumers. If local governments fail to act swiftly, they could be left with only non-paying customers, severely undermining their financial stability.
“The private sector is picking the cream of the market,” he cautioned. “Municipalities must embrace this new dispensation or face collapse in the next five years.”
Praise for eThekwini Leadership
The minister commended eThekwini’s leadership, particularly its mayor, for pioneering the initiative. “Well done, my friend,” Ramokgopa said. “This is a bold step that will set an example for the rest of the country.”
The approval marks a significant shift in South Africa’s energy landscape, empowering municipalities to take control of their electricity supply amid ongoing national grid challenges. Other cities are now expected to follow eThekwini’s lead in pursuing greater energy independence.
