Enerthia Energy works across four offerings — Energy Consultancy, Business Development, Product and Service Endorsement, and Funding. This week we look at what is driving a record year of financial close, and why electricity traders in South Africa now sit inside most of the commercial and industrial deals that reach it.
- About 5,252 MW could reach financial close in 2026 if the full pipeline closes, ahead of the 3,562 MW record set in 2024.
- Five of the six commercial and industrial projects that closed by April used a licensed trader — about 80% of that capacity.
- Every project that closed was funded with debt from South African banks and development finance institutions.
- The trader route and a direct PPA are both bankable; the right one depends on how much load you can commit, and for how long.
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Is 2026 really a record year for financial close?
It is on course to be, if the pipeline holds. A research note from the Power Futures Lab at the UCT Graduate School of Business found that eight projects totalling 1,932 MW had reached financial close by 30 April 2026, with another 26 projects totalling 3,320 MW expected to close by year-end.
If all of them do, 2026 would see 34 closures and about 5,252 MW — the highest single-year volume in South Africa’s history, ahead of the 3,562 MW across 35 closures in 2024. The authors, Dr Olakunle Alao and Dr Wikus Kruger, are careful to call that ambitious. Financial close is the moment the debt and equity are signed and construction can begin, so it is the best early signal of what will be built.
Why are electricity traders in South Africa in most C&I deals?
Because they solve the buyer’s biggest problem: committing to one generator for twenty years. Six commercial and industrial projects totalling 1,519 MW had closed by April. Five of them, 1,219 MW or about 80% of the confirmed capacity, were intermediated by a licensed trader. The one direct deal was a 300 MW solar plant with 660 MWh of battery storage, contracted bilaterally with Sasol and Air Liquide.
This is not a one-year pattern. A February 2026 report from the South African Electricity Traders Association and Krutham found that 2.6 GW of trader-linked projects had reached financial close, 56% of all privately contracted power projects over the past three years. South Africa now has 21 licensed traders. We looked at the buyer side of this market in how corporate power buying is growing in South Africa.
Trader route or direct PPA: which should a buyer choose?
Choose the trader route when your load is modest or uncertain, and a direct PPA when your load is large, steady and long-term. On the trader route, the trader contracts the generator, wheels the power across the grid and sells it to many buyers. You get a shorter, simpler contract and do not carry a twenty-year commitment alone.
On a direct PPA you contract the generator yourself. Lenders like it when the buyer is strong, and the price can be sharper, but you carry more of the commitment. Many buyers will end up with a mix: a direct agreement for the base load and a trader for the rest.
What do lenders look for before they fund a C&I project?
Lenders look for four things, whichever route you take. A creditworthy offtaker, or a trader with a book of creditworthy buyers. A contract long and firm enough to repay the debt. A grid connection and wheeling arrangement that are actually in place. And a load sized on what the site really uses, not on a hopeful forecast.
The good news is that local capital is there. Every project that closed secured its debt from South African commercial banks and development finance institutions, and the domestic market is now underwriting projects as large as 475 MW without foreign commercial debt. For how the capital stack comes together, see our earlier briefing on what it takes to reach financial close on a renewable project.
Before you sign, ask four questions. How much of my load can I commit, and for how long? Do I want one counterparty, or a trader who spreads the risk? Is the grid route to my site confirmed? And which structure gets the project to financial close fastest? Getting those answers right is what turns a good intention into funding for renewable energy projects in South Africa.
Funding for renewable energy projects in South Africa
We fund renewable energy projects of up to R10 billion across debt and equity structures and recommend the model that fits — read about our funding for renewable energy projects in South Africa.