South Africa 2026: the GNU power deal, Eskom unbundling, and the second draft of the Just Energy Transition: Deluair Consultancy

South Africa entered 2026 with the most consequential political and electricity sector reset since 1994. The May 29, 2024 election delivered the African National Congress 40.18 percent, the Democratic Alliance 21.81 percent, the new MK Party 14.58 percent, and the Economic Freedom Fighters 9.52 percent, ending 30 years of single party rule. The Government of National Unity, sworn in on June 14, 2024 with Cyril Ramaphosa at the helm and Enoch Godongwana retained at the National Treasury, inherited a power system that had just emerged from a record 332 days of loadshedding in 2023 and had not seen rotational cuts since March 26, 2024. The National Transmission Company of South Africa was ring fenced inside Eskom Holdings in July 2024 with a NERSA license in hand, and the Integrated Resource Plan 2023, gazetted January 2024, sets a procurement runway of 30 GW renewables, 6 GW gas, 2.5 GW small modular reactor and conventional nuclear, and 6 GW battery storage by 2030. The Just Energy Transition Partnership, capitalized at USD 11.6 billion in pledges, has disbursed or committed USD 8.5 billion by Q4 2024 of which only USD 1.7 billion is grant. The next 24 months decide whether the GNU can pass the Generation and Distribution unbundling, refinance the residual Eskom debt past the National Treasury guarantee envelope, and price a credible Komati style coal phase down at Hendrina, Camden, and Grootvlei without triggering a Mpumalanga political backlash that breaks the coalition.

The May 2024 verdict and the architecture of the GNU #

South Africa's May 29, 2024 election ended thirty years of single party rule. The ANC closed at 40.18 percent with 159 of 400 National Assembly seats, down from 57.50 percent and 230 seats in 2019, a 17 point collapse driven by the defection of roughly 2.4 million KwaZulu Natal and Mpumalanga voters to Jacob Zuma's MK Party, which polled 14.58 percent (IEC official results, June 2 2024). The DA held 21.81 percent and 87 seats, the EFF fell to 9.52 percent and 39 seats. The Statement of Intent of June 14, 2024 created the Government of National Unity, spanning eleven parties, holding 283 of 400 seats, and reserving electricity, finance, and trade portfolios for the ANC and DA jointly.

Ramaphosa's July 3, 2024 cabinet placed Kgosientsho Ramokgopa at Electricity and Energy, retained Enoch Godongwana at Treasury, and gave the DA Public Works, Agriculture, and Home Affairs. Coalition arithmetic is what matters: any decision requiring a parliamentary majority, including the ERA Amendment Act commencement, the Eskom Debt Relief top up, the IRP 2023 nuclear amendment, and the Climate Change Act regulations, depends on holding ANC and DA together. The parties disagree on cadre deployment, BEE thresholds, and the NHI Act, but converge on Eskom unbundling and grid expansion, which is why energy has been the GNU's most legislatively productive area.

Loadshedding ended in March 2024 and the data say it was supply, not demand #

Eskom recorded 332 days of loadshedding in 2023, the worst on record since cuts began in 2007 (Eskom System Status Bulletin, December 31 2023). Between March 26 and December 31, 2024 the grid logged zero days of stage one or higher loadshedding, a stretch that extended through Q1 2025 with only short stage two episodes in late June 2025. The CSIR Statistics of Power in South Africa 2024 report attributes recovery to four drivers aligned with the Energy Action Plan of July 25, 2022. EAF at the coal fleet rose from 54.7 percent in 2023 to 61.5 percent in 2024, with Kusile Units 1, 2, 3, and 5 back in service after the August 2022 flue gas duct collapse. Diesel burn at Ankerlig and Gourikwa fell from 1.2 billion liters in fiscal 2023 to 0.8 billion in fiscal 2024. Behind the meter solar PV reached 5.7 GW by December 2024, up from 2.8 GW at end 2022.

Demand did not collapse. Electricity sales fell 2.6 percent in 2024 and 8.4 percent over the 2018 peak (Stats SA P4141, March 2025), partly rooftop substitution and partly deindustrialization in ferroalloys and PGM smelting. Real GDP grew 0.7 percent in 2024 against 0.5 percent in 2023, with the SARB MPC statement of January 30 2025 attributing 0.5 percentage points to the loadshedding pause. The rand weakened to 19.50 per dollar in June 2023, recovered to 17.20 by Q1 2025 alongside Fitch's October 2024 revision to stable, and held at 18.20 to 18.80 through Q1 2026. Eskom's ZAR 16.0 billion net profit in fiscal 2024, against a ZAR 23.9 billion loss in fiscal 2023, reflects Treasury debt relief and diesel reduction, not structural turnaround.

Eskom unbundling: NTCSA is live, Generation and Distribution are next #

The legal milestone anchoring the GNU's power platform is NTCSA's operationalization. NTCSA received its NERSA transmission license on July 1, 2024 and took commercial operation with effect September 30, 2024 under a board chaired by Priscillah Mabelane. It owns 33,651 kilometers of high voltage backbone, the system operator function, and the buyer of last resort role under the Single Buyer Office, which from January 1, 2025 dispatches all IPP contracts on non discriminatory open access. The ERA Amendment Act was assented to on August 16, 2024 and Treasury committed in the November 2024 MTBPS to phased commencement, with Eskom Generation as a separate company by Q3 2026 and Distribution by Q2 2027.

The financial frame is the Eskom Debt Relief Act of 2023, authorizing ZAR 254 billion across fiscal 2024 to 2026 to take Eskom net debt from a peak of ZAR 423 billion to a target of ZAR 250 billion by March 2026. As of the February 2025 Budget Review, ZAR 184 billion has been transferred and Eskom is in compliance with conditionalities on capex, primary energy spend, executive remuneration, and the prohibition on coal price escalations above CPI. The remaining ZAR 70 billion is contingent on the Distribution unbundling milestone and the IRP 2023 schedule gazetted March 27, 2025. The structural risk is the municipal arrears stack: ZAR 95 billion owed to Eskom at March 2025, of which ZAR 78 billion sits in 25 distressed municipalities mostly in Free State, North West, and Mpumalanga. The write off framework Godongwana floated at Davos in January 2025 has not been gazetted, and is the single largest unhedged exposure on the Eskom balance sheet.

Eskom successor entity	Status as of April 2026	Asset base (ZAR billion, 2024)	Regulatory anchor
National Transmission Company SA (NTCSA)	Operational, NERSA licensed Jul 2024, board appointed	240	Electricity Regulation Act, transmission license
Eskom Generation	Functionally separated, legal separation pending	330	Generation license per station, IRP 2023
Eskom Distribution	Functionally separated, legal separation pending	180	Distribution license, municipal Service Level Agreements
Eskom Holdings (residual)	Service company, Treasury debt vehicle	Net debt ZAR 403 bn after relief	Eskom Debt Relief Act, 2023
Independent Transmission Projects (ITP) Office	Procurement office stood up Q3 2024	USD 21 bn pipeline through 2032	ERA Amendment Act, 2024

Eskom restructuring status, April 2026

REIPPPP, Battery Storage, and the IRP 2023 procurement runway #

REIPPPP has cleared 92 projects and 6,422 MW since 2011 across six bid windows (IPP Office, December 2024). Bid Window 7, the largest procurement to date, opened on March 28, 2024 with a 5,000 MW envelope split between solar PV and onshore wind, and closed on November 15, 2024. Preferred bidder announcement is expected in May 2026 after a procurement review prompted by Eskom's late 2024 contention that grid connection studies were inconsistent across the Northern Cape REDZ. BESIPPPP Window 2 opened on August 9, 2024 with 615 MW of four hour capacity at Ferrum, Mookodi, and Aggeneis substations, with preferred bidders announced March 2025 and target COD in Q4 2026.

Behind the auctions sits IRP 2023, gazetted January 4, 2024. It commits to 30 GW of variable renewables by 2030, 6 GW of gas including Richards Bay and Coega LNG, 2.5 GW combined of Koeberg life extension and SMR pilot, 6 GW of battery storage, and decommissioning of 22 GW of Eskom coal through 2035. Credibility rests on grid build out: NTCSA's Transmission Development Plan 2024 to 2033 envisages 14,218 kilometers of new 400 kV and 765 kV lines and 56 substations at ZAR 390 billion (USD 21 billion), of which only ZAR 87 billion is funded across the Eskom corporate plan and the MIGA partial risk envelope. The Independent Transmission Projects Office, stood up Q3 2024 under Treasury's Budget Facility for Infrastructure, is the vehicle for the residual ZAR 303 billion. The open questions are concession structure and offtake credit support, signaled for resolution by the October 2026 MTBPS.

JETP, Komati, and the political economy of the Mpumalanga coal closures #

The JETP announced at COP26 on November 2, 2021 has gone through three iterations. The original USD 8.5 billion IPG pledge from the EU, Germany, France, UK, and US was supplemented by Netherlands and Denmark in 2023 (USD 1.0 billion) and by Spain and Canada in 2024 (USD 1.1 billion), for a USD 11.6 billion envelope. The JETP Investment Plan specifies a USD 98 billion need across electricity (USD 47 billion), NEVs (USD 8 billion), green hydrogen (USD 21 billion), and just transition (USD 22 billion) over 2023 to 2027. The April 2025 update tracks USD 8.5 billion disbursed or committed through Q4 2024, of which roughly USD 1.7 billion is concessional grant. The Q2 2025 IPG refresh is expected to widen the technical assistance envelope, given Trump administration signals about US withdrawal.

The first major test was Komati Power Station, which closed its last coal unit on October 31, 2022 and is being converted to a 150 MW solar PV, 70 MW wind, and 150 MW four hour battery facility under World Bank Project P181244, with USD 497 million committed. The 2023 Auditor General report and the World Bank Inspection Panel raised material concerns about the just transition component, with Komati's 1,200 affected workers and 5,000 indirect losses only partially absorbed by reskilling. Hendrina, Camden, and Grootvlei begin closures 2027 to 2030 under IRP 2023, with combined nameplate of 4,810 MW and direct employment of approximately 5,800. The political constraint is precise: ANC and EFF, which formed a Mpumalanga cooperation pact in October 2024, oppose unmitigated closures, and the DA cannot offset an ANC defection on coal politics. Treasury and DFFE circulars in March 2025 propose decoupling closure dates from coal life extensions, with refurbishment to 2032 as the working compromise.

Funding line	Pledged (USD bn)	Disbursed or committed by Q4 2024 (USD bn)	Grant share
European Union, Germany, France, UK, US (IPG, COP26 baseline)	8.5	7.6	5%
Netherlands, Denmark (added 2023)	1.0	0.7	8%
Spain, Canada (added 2024)	1.1	0.2	12%
Multilateral Climate Finance Facility component	1.0	0.0	100%
Total Just Energy Transition Partnership	11.6	8.5	20% (USD 1.7 bn grant)

Just Energy Transition Partnership, status at end 2024

What to do: 2026 to 2028 implications for IPPs, sovereign creditors, governments, and multinationals #

For IPPs, 2026 is the most attractive South African renewables environment since 2014. NTCSA open access, Bid Window 7 preferred bidder announcement in May 2026, BESIPPPP Window 2, and the IRP 2023 wheeling framework create four routes to market: utility scale PPA with NTCSA at LCOE ceilings of ZAR 0.65 per kWh for solar PV and ZAR 0.85 for onshore wind, corporate PPAs at ZAR 0.95 to 1.20 with PGM and data center offtakers, municipal wheeling in Cape Town and eThekwini, and merchant generation under the trader regime. CSIR projects curtailment at 12 to 18 percent in the Northern Cape by 2028 absent transmission build out. The mitigation is diversification across Eastern Cape and Free State REDZ and a PV plus battery hybrid with two to four hours of storage.

For sovereign creditors, the path through 2027 turns on three milestones: Eskom legal separation by Q3 2026, the November 2025 MTBPS treatment of the ZAR 70 billion residual, and the IPG Q2 2025 refresh. Moody's and S&P held South Africa at Ba2 stable and BB stable through April 2026, and Fitch revised to BB stable in October 2024. The base case is an upgrade window in late 2027 contingent on three quarters of primary surplus and a credible plan for Eskom municipal arrears. The bear case is a coalition rupture over NHI or Expropriation Act regulations, delaying Distribution unbundling beyond 2027.

For partner governments and multilaterals, lock the IPG Q2 2025 refresh with a doubled grant component (USD 3.5 billion target), framed as transmission acceleration. Accelerate the MIGA and AfDB partial risk facility for ITP Office transmission, targeting USD 5 billion by Q4 2026. Reposition just transition finance toward Mpumalanga diversification, the binding political constraint.

For multinationals, mining and heavy manufacturing should accelerate self generation and corporate PPA contracting through 2027. Data center and AI inference operators should price grid lag into siting and budget for two to four year diesel plus battery bridges. Automotive OEMs should engage the dtic on the SAREM green industrial credit framework. Strategos estimates 65 percent probability the GNU holds through the 2027 budget cycle and 45 percent that Eskom Distribution legal separation lands on schedule. The asymmetric upside is real, contingent, and compressed into the next eighteen months.

Sources #

Cite this brief

@misc{hossen2026southafricapower2026,
  author = {Hossen, Md Deluair},
  title  = {South Africa 2026: the GNU power deal, Eskom unbundling, and the second draft of the Just Energy Transition},
  year   = {2026},
  url    = {https://deluair.com/consultancy/insights/south-africa-power-2026},
  note   = {Deluair Consultancy briefs}
}

Hossen, M. D. (2026). South Africa 2026: the GNU power deal, Eskom unbundling, and the second draft of the Just Energy Transition. Deluair Consultancy briefs. https://deluair.com/consultancy/insights/south-africa-power-2026

Hossen, Md Deluair. "South Africa 2026: the GNU power deal, Eskom unbundling, and the second draft of the Just Energy Transition." Deluair Consultancy briefs, 2026-04-26. https://deluair.com/consultancy/insights/south-africa-power-2026.

On the watchlist

Upcoming dates that bear on this brief.

See the full firm watchlist for the rest of the calendar.

May 2026 Election

South Africa GNU two-year mark and ANC NGC

Whether ANC retains internal control under Mashatile-vs-Mbalula succession, whether DA holds out on BELA and NHI, and whether MK consolidates KZN.

Q4 2026 Energy

South Africa Eskom unbundling completion

Whether GNU coalition discipline holds for IRP 2023 implementation, including REIPPPP Bid Window 8 and Battery Storage Bid 3 outcomes.

Related insights

Adjacent reading.

Energy and transition economics

South Africa 2026: the GNU power deal, Eskom unbundling, and the second draft of the Just Energy Transition