South Africa’s energy sector is experiencing significant transformation as municipalities increasingly explore pathways to energy security, economic resilience, and climate action, even as national attention focuses on load shedding and the challenges facing Eskom, the state-owned electricity utility responsible for roughly 90% of the country’s power generation. Local governments are emerging as key players in diversifying energy supply and integrating renewable sources to strengthen community resilience.
Through the UK PACT (Partnering for Accelerated Climate Transitions) programme, the United Kingdom is supporting South Africa’s just energy transition by partnering with municipalities to enhance their capacity to procure electricity from Independent Power Producers (IPPs). A UK PACT-funded project led by the University of Pretoria (UP), in collaboration with legal experts, local consultants, and the South African Local Government Association (SALGA), has developed tools, knowledge, and frameworks to enable municipalities to engage directly with IPPs in a legally sound, financially viable, and socially inclusive manner.
The project delivered a comprehensive set of knowledge products, including a Municipal IPP Project Preparation and Procurement Manual, Power Purchase Agreement (PPA) Guidelines, template documents, and training resources. Four training sessions reached 154 participants from 62 organizations, including more than 50 municipalities. Gender Equality, Disability, and Social Inclusion (GEDSI) principles were embedded throughout the project, ensuring inclusive participation and equitable outcomes. Innovative tools such as Multi-Criteria Decision Analysis (MCDA) were introduced, allowing municipalities to evaluate energy options based on financial, technical, and social trade-offs.
As a result, municipalities are now equipped to initiate and manage IPP procurement processes, negotiate and sign PPAs with confidence, and integrate local development objectives, including job creation and support for women-owned enterprises, into energy strategies. This initiative provides the first comprehensive, locally relevant guidelines for municipal IPP procurement in South Africa, addressing a critical gap in the sector and enabling municipalities to accelerate renewable energy adoption, improve energy reliability and affordability, and stimulate local economic growth.
The UP-led project forms part of a broader portfolio of UK PACT initiatives in South Africa, including a green hydrogen export feasibility study in the Eastern Cape, technical support to the Presidential Climate Commission on energy pricing and distribution reform, and collaboration with the Development Bank of Southern Africa to unlock financing for municipal solar PV projects. These initiatives collectively aim to build local capacity, support low-carbon development, and ensure that the benefits of climate action are widely shared.
The knowledge products are publicly available via the SALGA website, and discussions are underway to embed the tools within key institutions such as SALGA, the Department of Mineral Resources and Energy, and National Treasury. As more municipalities move toward energy independence, this project exemplifies how strategic partnerships, local leadership, and targeted technical support can drive practical, inclusive, and transformative climate action, reflecting UK PACT’s commitment to a just and sustainable energy transition.
