South Africa’s electricity market continues to shift beyond the traditional utility model, with Mainstream Renewable Power’s 50 MW Ilikwa Solar Park now reaching commercial operation in the Free State. Located near Parys, the solar facility is owned by Mainstream Renewable Power (70%) and Investec (30%), and represents more than just another renewable energy project coming online. Unlike projects developed under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), Ilikwa is designed to supply multiple private commercial and industrial customers rather than selling electricity exclusively to Eskom.
The project uses flexible Renewable Energy Supply Agreements (RESAs), allowing businesses to purchase renewable electricity through shorter-term contracts that better match their operational and investment cycles. That marks a significant evolution in South Africa’s electricity market. Instead of relying solely on government procurement programmes, companies can increasingly secure renewable power directly from independent producers through private agreements, creating greater competition and expanding access to clean electricity. The 50 MW solar park is expected to generate more than 140 GWh of electricity annually, enough to offset approximately 100,000 tonnes of carbon dioxide emissions each year.
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Construction began in October 2024 and reached commercial operation after approximately 21 months, highlighting how private renewable projects are moving from financial close to electricity generation within relatively short development timelines. While the plant’s generation capacity is modest compared to South Africa’s utility-scale renewable programme, its commercial structure may prove equally important. Flexible contracting models are opening the market to businesses that may not want to commit to traditional long-term power purchase agreements, allowing a broader range of commercial and industrial customers to participate in the country’s energy transition.
As electricity trading, wheeling and private generation continue to expand, projects like Ilikwa demonstrate that renewable energy development in South Africa is no longer being driven exclusively by Eskom procurement. Instead, a parallel private market is emerging, where developers, investors and businesses negotiate renewable electricity directly, creating new pathways for investment while helping diversify the country’s electricity supply.
