As South Africa accelerates the shift towards a more liberalised electricity market, private-sector-driven renewable-energy projects are emerging as critical instruments for meeting near-term capacity needs, states renewables company G7 Renewable Energies CEO Dr Kilian Hagemann.

Karreebosch, owned by turnkey energy solutions company Cennergi Holdings and G7 Renewable Energies, is located between the towns of Sutherland in the Northern Cape and Matjiesfontein in the Western Cape.

In light of the Electricity Regulation Amend-ment Act, increased wheeling activity and a rapidly expanding non-utility generation base, G7’s Karreebosch Wind Farm – in the Karoo region – offers a window into how independent power producers (IPPs) are navigating complex financing, as well as regulatory and grid-access constraints, to bring large-scale projects to financial close and construction.

The 140 MW project is being developed to supply power directly to platinum group metals miner Northam Platinum through a long-term power purchase agreement, and reflects a broader structural trend of private offtakers, particularly in the mining sector, driving the bulk of new-build wind and solar capacity.

According to the company, private- and mining-led transactions account for 56% of all utility-scale PV and 67% of all wind projects that have entered into construction over the past five years in South Africa, with wind development over the past two years being “effectively 100%-reliant” on private offtake arrangements since bid windows 6 (2022) and 7 (2024) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) did not appoint any preferred bidders for wind.

Hagemann emphasises that the financial close of Karreebosch, reached in February this year, necessitated G7 securing a reliable buyer for the project’s electricity generation early on in the process.

“It all hinged on having a capable, credit- worthy offtaker on board in the shape of Northam Platinum,” he explains.

The combination of such a customer, environmental approvals and confirmed grid- access capacity enabled G7 to assemble a bankable consortium of investors, lenders and empowerment partners.

Hagemann notes that, unlike the integrated structure of the REIPPPP for bid windows one to five, private-sector wheeling requires developers to manage multiple interdependent processes, such as offtakes, permitting, grid access and financing, on parallel timelines.

Grid Access Barriers

The most significant obstacle for the project was grid-access uncertainty, following changes to State-owned power utility Eskom’s allocation rules. G7 first applied for grid capacity in September 2022 under the traditional first-come, first-served principle.

However, after nine months of inaction, Eskom introduced the Interim Grid Capacity Allocation Rules in June 2023, shifting the system to a “first-ready, first-served” model, which imposed conditions that the developer describes as “ill-conceived, inappropriate and irrational”, as Karreebosch’s application predated the rule changes.

In this regard, the company proposes three key reforms: the removal of the requirement for confirmed offtakers ahead of grid access, given the forthcoming launch of the South African Wholesale Electricity Market (SAWEM); the publication of a fully transparent national grid-connection queue; and applying rules consistently based on the date of application rather than retrospective criteria.

These measures would materially strengthen investor and developer confidence.

Partnerships with private and mining-sector buyers are expected to remain central to the renewable-energy sector’s expansion, Hagemann adds.

“For wind, I would go much further than saying these deals are important – without them, the industry would come to a grinding halt,” he declares.

For solar PV, non-utility capacity, including 6.9 GW of behind-the-meter installations, now dominates new-build activity, the company notes. Hagemann adds that the emerging trend is towards energy traders, which aggregate demand and supply to offer more flexible contract structures, thereby reducing delivery risk for buyers and IPPs.

Development Priority

Karreebosch’s socioeconomic development model includes targeted employment in local communities, accredited training programmes, support for women-owned enterprises, supplier development opportunities and committed social investment programmes in Sutherland.

About 130 residents, or about 5% of the town’s population, are employed by the project, with numbers expected to rise as construction progresses, Hagemann highlights.

Technically, the project incorporates advanced environmental and operational innovations. These include painted turbine blades to improve avifaunal visibility, patterned blades that have been trialled locally, with “promising results”, and investigations into an AI-driven, shut-down-on-demand system that triggers temporary turbine shutdowns when sensitive species are detected by cameras near rotor-sweep zones.

Looking ahead, G7 Renewable Energies plans to leverage the Karreebosch experience to expand its portfolio of PV, wind and hybrid projects.

However, Hagemann stresses that ultimately, the future trajectory of private-market renewables will hinge on the success of SAWEM’s April 2026 launch.