Eskom has signed a R125-million grant agreement with Agence Française de Développement (AFD) to support the development of the proposed Tubatse pumped storage system project, located in the Elias Motsoaledi local municipality in Limpopo.

The 1.5 GW Tubatse project, which would be pursued as a public-private partnership, could comprise four 375 MW units and have a storage capacity of 21 GWh.

Eskom will use the grant funding to procuring the services of a transaction adviser to conduct a feasibility study and finalise a business case for the project in the first quarter of 2026.

The transaction adviser will also support Eskom in procuring a private developer for the project’s implementation by 2033.

Eskom is currently disallowed by the terms of a National Treasury debt-relief programme from raising new debt for generation projects, but has nevertheless signalled to the market that it is working on a 20 GW project pipeline that could be pursued in partnership with the private sector.

Eskom CEO Dan Marokane states that the group aims to execute at least 2 GW of these projects in the coming three years, with solar PV projects in close proximity to its Lethabo and closed Komati power stations being prioritised.

He adds that the Tubatse scheme, which has been part of the State-owned entity’s project portfolio for a number of years, could provide the large-scale storage needed to support the higher variable renewables penetration envisaged under South Africa’s Just Energy Transition Investment Plan.

The EU grant funding, delegated for implementation by the AFD, will seek to advance the project to bankability.

EU  Ambassador to South Africa Sandra Kramer said the Global Gateway grant funding being provided by the bloc will further unlock the immense potential for renewable energy and support South Africa to realise its ambitions for a “greener tomorrow”.

AFD’s regional director for Southern Africa and country director for South Africa Audrey Rojkoff adds that the funding reaffirms the development financier’s commitment to support Eskom’s efforts to diversify its energy mix and maintain energy security.