South Africa’s commercial sector has spent years bracing for the next “load shedding” schedule. Now, the private sector is increasingly taking the country’s energy security into its own hands.

SolarAfrica, a Pretoria-based renewable energy provider, has reached financial close on a R1.5bn ($94m) debt package to fund SunCentral 2, a 114 MW solar project in the Northern Cape. The funding, provided by Rand Merchant Bank (RMB) and Investec, marks a significant milestone in the company’s transition from on-site rooftop installations to utility-scale “wheeling” models.

The project is the second phase of the broader SunCentral cluster, which aims to reach 1 GW of capacity at full scale. With first power expected in 2026, the initiative highlights a growing trend in emerging markets: private firms building the infrastructure that state utilities can no longer reliably provide.

The “Wheeling” Pivot

While on-site solar (panels on factory roofs) has been the standard for a decade, it is often limited by space and intermittency. SolarAfrica is betting on wheeling — a model where electricity is generated at a high-yield location (like the sunny Northern Cape) and transported across the national grid to industrial customers elsewhere in the country.

For South African businesses, this offers two distinct advantages:

1. Zero Upfront Capex: Companies sign long-term Power Purchase Agreements (PPAs) rather than buying the hardware.
2. Scalability: Businesses can source a higher percentage of their total energy needs from renewables than rooftop space would typically allow.

“Businesses want power they can trust — clean, affordable, and predictable,” says David McDonald, CEO of SolarAfrica. By moving to a one-to-many bilateral wheeling model, the company is positioning itself as a private utility for the country’s industrial hubs.

Infrastructure as a Moat

One of the primary bottlenecks for renewable energy in South Africa is not the lack of sun, but the lack of grid capacity. The national utility, Eskom, has struggled with a transmission network that wasn’t designed for decentralized, remote power plants.

To mitigate this, SolarAfrica is investing a portion of the $94m directly into the Main Transmission Substation (MTS). This substation is engineered to handle up to 2 GW of power evacuation. By building the “plug-in” point themselves, SolarAfrica is essentially de-risking its future phases and creating a gateway for other renewable projects to connect to the grid.

The Financial Breakdown

The R1.5bn injection is a project finance deal involving two of South Africa’s major financial institutions:

• Rand Merchant Bank (RMB): Acting through FirstRand Bank.
• Investec: Providing corporate and institutional banking expertise.

This follows the financial close of SunCentral 1 in late 2024. Together with the upcoming SunCentral 3, Phase 1 of the development will total 342 MW. The company currently has a total pipeline of 3 GW under development across the country.

While the funding is a win for SolarAfrica, the project reflects a broader “privatization by stealth” occurring in the South African energy market. As the government eases regulations on private generation, firms like SolarAfrica are moving from being “alternative” providers to becoming the backbone of industrial energy.

However, the success of these projects remains tethered to the stability of the national grid. SolarAfrica’s investment in the Main Transmission Substation is a pragmatic admission that to sell power, they must first ensure the wires can carry it.