The City of Ekurhuleni is turning municipal property into a source of electricity as South African municipalities expand procurement from independent power producers (IPPs), with a new R360 million solar project in Springs set to supply the city under a 20-year power purchase agreement. BluEnergy, the energy business of JSE-listed Blu Label Unlimited, and its development partner IBS Crafts have started construction of a 25.6-megawatt-peak (MWp) solar plant at the Springs Fresh Produce Market. The project will use the market’s rooftop and surrounding unused land to generate electricity for the municipal network.
The independent power producer will finance the construction, meaning Ekurhuleni will not need to make an upfront capital contribution. Instead, the municipality will purchase electricity generated by the facility over the contract period. The project forms part of Ekurhuleni’s Independent Power Producer Programme, which is designed to bring private investment into electricity generation and diversify the city’s power supply.
Its significance extends beyond the additional generation capacity. For Blu Label, the project is the first to enter construction from a previously disclosed 180 MW pipeline, marking a move from electricity vending and revenue-assurance services into physical power generation.
How Ekurhuleni’s Solar Plant Will Supply the City
The Springs Fresh Produce Market project is expected to generate approximately 40 gigawatt-hours (GWh) of electricity annually, equivalent to the yearly consumption of about 6,000 average households.
The facility will connect to the Springs Bulk Substation, allowing the electricity to feed into the municipal network. The development is also expected to avoid approximately 36,000 tonnes of carbon dioxide emissions annually, although the final impact will depend on actual generation and the electricity sources displaced. Construction is expected to create more than 100 jobs, with additional operations and maintenance positions during the plant’s operating life.
The project’s location is also significant. Using the roof of an existing public market and adjacent unused land gives the municipality a way to generate electricity from property already under its control, without needing to acquire a separate large site for the facility. The plant will be owned and operated by Olympia Park, a company in which BluEnergy holds the majority stake alongside IBS Crafts. IBS Crafts was selected as the preferred bidder under Ekurhuleni’s IPP programme.
Why the 20-Year Power Agreement Matters
The power purchase agreement provides the commercial structure for the project. BluEnergy and its partner fund and develop the plant, while the municipality commits to purchasing its electricity over an extended period. This arrangement allows Ekurhuleni to procure additional generation without financing the full construction cost from its own capital budget. It also gives the project a long-term customer, an important consideration when developers seek financing for energy infrastructure.
However, the absence of an upfront municipal capital contribution does not mean the electricity is free. The city will pay for the power it purchases under the agreement, and the commercial terms—including the tariff—are central to determining whether the project delivers savings compared with alternative sources of electricity. The tariff has not been publicly disclosed in the reporting reviewed. Consequently, the project’s expected output and financing structure can be described, but its precise cost advantage cannot be independently calculated from the available figures.
For municipalities considering similar arrangements, the key questions are whether contracted electricity is competitively priced, whether supply can be delivered reliably and whether the agreement distributes risks appropriately between the public buyer and private developer.
Ekurhuleni Can Procure Up to 2,400 MW From Independent Power Producers
The Springs solar plant is one project within a much larger municipal procurement programme. In October 2026, Electricity and Energy Minister Kgosientsho Ramokgopa announced approval for Ekurhuleni to procure up to 2,400 MW of generation capacity from independent power producers under a ministerial determination pursuant to section 34 of the Electricity Regulation Act. The approved capacity includes 1,237 MW of solar generation, of which 1,137 MW is embedded generation within the municipality, according to the energy sector reporting.
The city estimates that its wider IPP programme could save approximately R36 billion in bulk electricity costs over 20 years. This is a projected benefit associated with the broader procurement programme, not a confirmed saving attributable to the Springs plant alone. The procurement programme creates room for developers to propose generation projects and compete to supply the municipal market. It could also help Ekurhuleni diversify the sources from which it buys electricity, reducing its dependence on a single supplier.
Yet the amount of capacity approved for procurement is not the same as capacity already under construction or in operation. Delivering the programme will require projects to secure financing, obtain the necessary approvals, connect to the grid and begin supplying power.
Blu Label Moves Beyond Prepaid Electricity Services
The project also marks a strategic shift for Blu Label Unlimited, whose existing electricity business has focused heavily on prepaid vending and revenue-assurance systems through its Cigicell subsidiary. Cigicell’s systems support electricity vending and revenue collection in more than 95 municipalities across South Africa. BluEnergy extends the group’s involvement in the municipal electricity market from managing transactions and payments towards developing and supplying electricity itself.
Blu Label has said that combining generation, electricity trading, payments and revenue assurance could create a broader platform for municipal energy partnerships.
The timing matters for the group’s commercial strategy. TechCentral reported in October 2026 that Blu Label’s prepaid electricity business had sold R46.2 billion of electricity on behalf of municipalities in the financial year to May 2026, while commission revenue declined by 13% to R279 million.
Electricity generation offers a different potential revenue stream, but it also exposes the group to project-development, financing, construction and operating risks that differ from its established service businesses.
BluEnergy received a multi-year electricity trading licence from the National Energy Regulator of South Africa earlier in 2026. At the time of the October reporting, however, the company had not yet started trading or wheeling electricity from other renewable energy producers.
The Springs project is therefore an early test of whether Blu Label can turn its municipal relationships into a larger energy business that includes generation assets and long-term electricity supply.
BluEnergy’s 180 MW Pipeline Faces the Delivery Test
The Springs project is the first development to enter construction from Blu Label’s previously disclosed 180 MW generation pipeline. In August 2026, the group said it had secured approximately 400 MW of generation capacity opportunities, with sites, power purchase agreements and grid connections in place for 180 MW. At that stage, none of the capacity was generating electricity and BluEnergy had not yet earned contracted revenue from those projects, according to TechCentral.
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Moving the Springs plant into construction is an important step, but the next milestones will be completion, grid connection and commercial operation. The wider pipeline will need to progress through similar stages before it can produce contracted electricity and recurring revenue. The company’s ability to finance and deliver subsequent projects will help determine whether the Springs development becomes the foundation of a larger generation business or remains a standalone project.
For Ekurhuleni, the measure of success will be different: reliable electricity delivered at commercially competitive prices and a measurable contribution to the municipality’s broader supply strategy.
What the Project Means for Municipal Renewable Energy Investment
The Springs development illustrates how municipalities can use long-term electricity purchase agreements to attract private capital into generation. It also shows how existing public property can support renewable energy projects without requiring a municipality to finance the entire asset itself.
For developers, municipal procurement programmes create potential customers and a route to market. For municipalities, they can provide access to new electricity supply while shifting some construction and project-financing responsibilities to private investors. The model is not without risks. A long-term contract creates payment obligations for the public buyer, while the project depends on construction being completed, grid connections functioning and electricity being delivered as agreed. The financial benefits will depend on contract terms and the cost of the power supplied.
Ekurhuleni’s 2,400 MW procurement authorisation provides a much larger framework for private participation, but the impact will be determined by how much capacity is ultimately contracted and commissioned. The Springs plant is an early example of that programme moving into physical construction. Its delivery will provide a clearer indication of whether private-financed solar projects can help municipalities diversify supply while maintaining control over electricity costs.
