The Executive Mayor of the City of Ekurhuleni Ald Nkosindiphile Xhakaza says the city has taken a deliberate decision not to remain spectators in the transformation of South Africa’s energy landscape but position itself to become an active participant and leader in building a modern, diversified and resilient energy economy.
Addressing the 75 appointed IPPs and relevant stakeholders at the Birchwood Hotel and OR Tambo Conference this morning, Mayor Xhakaza said the approval of the Escrow Account by Council provides the legal and financial mechanism required to unlock large-scale private sector investment into municipal energy infrastructure. This morning’s engagement was to announce the ESCROW account, outline governance frameworks, implementation modalities, project timelines and acceleration of delivery mechanisms.
“The Escrow development creates a secure and bankable payment structure that gives confidence to financial institutions, investors and project developers to fund long-term electricity generation projects within our metro.
For the first time, Independent Power Producers will now have a credible and sustainable framework through which they can access project finance and commence implementation of generation facilities that will supply electricity directly into the City’s network,” he said, clarifying that the IPP pipeline comes with a R16 billion investment package.
The city’s Energy Department currently manages an electricity bulk purchase portfolio of nearly R20 billion annually, with Eskom remaining the sole supplier of bulk electricity to the municipality. While Eskom continues to play an important role in our energy ecosystem, the reality is that cities must begin diversifying their energy sources in order to enhance resilience, improve pricing competitiveness and reduce long-term procurement risks.
The introduction of Independent Power Producers into the local energy mix represents a strategic shift towards a more sustainable and investment-driven municipal energy model.
“This initiative is fundamentally about economic growth and service delivery. Reliable energy supply remains one of the most important drivers of industrial productivity, investment attraction and economic expansion. Ekurhuleni is the industrial heartland of South Africa, and our ability to sustain manufacturing output, logistics operations, commercial development and township economic growth depends heavily on energy availability and infrastructure reliability,” explained Mayor Xhakaza.
By unlocking IPP investment, the city is opening new avenues for industrial expansion, supporting strategic developments and enabling new electricity connections that will stimulate economic activity across our metro. Importantly, this programme will strengthen the City’s revenue position.
The ring-fenced payment structure created through the Escrow Account improves collection certainty and financial security, while increased electricity availability will grow municipal revenue through enhanced electricity sales and broader economic activity. This means more resources for infrastructure investment, service delivery improvement and community development.
Council’s approval also responds directly to Eskom’s new requirement for security deposits on large power-user connections. Through this framework, the financial burden associated with these deposits is transferred from the municipality to qualifying large power users. These protects municipal finances while ensuring that strategic developments and industrial projects are not delayed by funding constraints.
We are committed to ensuring that this process is implemented transparently, efficiently and with the urgency required to respond to the energy and economic realities facing our country. This programme forms part of the broader vision of transforming Ekurhuleni into an energy-secure, investment-ready and economically competitive metro, expanded the Mayor.
“As we declared earlier this year, 2026 is the year to fix local government and transform the economy in the City of Ekurhuleni. We are fixing the frontlines of service delivery, rebuilding governance systems and restoring investor confidence in the capability of local government to lead development.
The approval of the Escrow Account demonstrates that this administration is prepared to take bold decisions that unlock growth, modernise infrastructure and create sustainable opportunities for our people. We are moving decisively from the barren years toward a season of hope, renewal and development,” he added.
The City appreciates that the work ahead requires collaboration between government, business, financial institutions and energy partners. The City of Ekurhuleni remains committed to becoming South Africa’s leading industrial and manufacturing hub, powered by reliable infrastructure, sound governance and strategic investment.