Johannesburg, South Africa, 5 November, South Africa’s journey toward a sustainable energy future has reached a critical milestone with the release of a landmark study, titled “South Africa's Energy Sector Investment Requirements to Achieve Energy Security and Net Zero by 2050”. This study, undertaken through a strategic partnership between the Development Bank of Southern Africa, the Presidential Climate Commission, the National Planning Commission, the Southern Africa Toward Inclusive Economic Development (SA-TIED) programme, integrates and advances the substantial foundation laid by our nation's key strategic documents and the 2023 World Bank Going Beyond the Infrastructure Funding Gap: A South African Perspective study.
The study covers pathways development, energy infrastructure and technical modelling, soft market sounding, funding gap estimation, and regulatory review. This work is supported by a literature review to inform the analysis and allow for results comparison. In addition, a supplementary Computable General Equilibrium modelling report was produced to provide insight into the socio-economic impact stemming from the pathways / scenarios generated in the study.
This further integrates and advances the work from the Just Energy Transition Investment Plan; the Integrated Resource Plan 2019 and Draft IRP 2023; the Transmission Development Plan 2024; the National Infrastructure Plan 2050; our Nationally Determined Contributions towards a net zero future; the Low Emission Development Strategy; and the Climate Change Act. Furthermore, this study has been developed while cognisant of the Integrated Resource Plan 2025, with a view of contributing to the dialogue of our evolving policy landscape.
Key Findings
- Investment Requirements: The total investment required through to 2050 is R1.6 trillion for generation, R383 billion for transmission and R1.5 trillion for operational expenses. The total requirement, therefore, is R3.5 trillion or R138 billion per annum. This is not only the lowest cost option for South Africa, it is also an option that can be funded almost entirely by South African public and private investors.
- Renewable Energy Primacy: By 2050, between 70% and 85% of South Africa’s electricity generation capacity could come from renewable sources (including battery storage), further supported by flexible gas capacity.
- Economic Opportunity: The report highlights that the pathway most aligned with climate commitments is also the most cost-effective, proving that sustainable development is not only an environmental imperative but also a powerful economic opportunity.
- Urgent Policy Action: Fragmentation of the current regulatory framework remains a barrier. The report calls for swift regulatory reform, market development, and innovative financing mechanisms to close the funding gap.
- Socio-Economic Impacts: The accompanying socio-economic study expands on how the Green Industrialisation scenario can underpin a truly Just Energy Transition for South Africa.
After years of debilitating load shedding that constrained the economy and tested the nations resilience, early signs of recovery in the energy sector are emerging. The challenges persist and the study underscores that achieving South Africa’s Nationally Determined Contributions (NDCs) under the Paris Agreement, the targets of the National Development Plan Vision 2030, and universal energy access in line with the United Nations’ Sustainable Development Goals (SDGs) will require unprecedented levels of investment, coordination, and political will.
Voices from Leadership
“Achieving a greener energy mix by 2050 represents more than an environmental imperative; it’s a strategic opportunity to drive South Africa’s development imperatives, while supplying cleaner energy technologies for the rapidly expanding African market.” DBSA CEO – Boitumelo Mosako
“South Africa is one of the few global South countries that has several locally based energy modelling capabilities. This helps prevent an intellectual monoculture dependent on the outputs on one dominant energy model, which is often not even locally based in many African countries.” NPC Commissioner – Mark Swilling
“This report comes at the appropriate time as we raise our ambition in ensuring a sustainable and energy secure future. It further aligns with numerous of our previous studies demonstrating how renewable energy remains economically viable and can guarantee security of supply, with quicker roll-out. It signals the required investments, policy reform, including through tariff structures and support to municipalities, as well as the need for incentives to public, private and household renewable energy generation and storage projects.” PCC Executive Director – Dorah Modise
“This report investigates the technical and cost options for a sustainable and energy secure future and demonstrates how renewable energy remains one of the lower-cost pathways to power security.” Policy Lead for the SA-TIED Workstream on Water, Energy, and Food Systems in the Context of Climate Change – Georgina Ryan
A Call to Action
The study calls on policymakers, investors, civil society, and stakeholders to act with urgency. The evidence presented should inform not only national dialogue but also concrete, coordinated policy actions that unlock the capital required for South Africa’s energy transition.
“The time for deliberation alone has passed. We must now move decisively toward implementation”, the report concludes.
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About the Development Bank of Southern Africa
The Development Bank of Southern Africa is one of the leading development financial institutions on the continent. Our primary purpose is delivering impactful development finance solutions that ignite transformative change in South Africa and on the rest of the African continent. Improving the quality of life of people in Africa is the fundamental focus of our development impact. We aim to bend the arc of history towards shared prosperity through multifaceted investments in sustainable infrastructure and human capacity.
Our product solutions span all phases of the infrastructure development value chain from infrastructure planning and project preparation, across a range of financing and non-financing investments to infrastructure implementation and delivery. Our primary areas of focus include Energy, ICT, Transport, Water and Sanitation. Our secondary area of focus includes Education, Housing and Health.