Hybrid Project to Mitigate Energy Supply in South Africa


In order to prevent global warming from exceeding 1.5 degrees Celsius, the chair of the COP28 climate summit, in collaboration with two organisations dedicated to renewable energy, is urging UN member states to triple their renewable energy output by 2030. According to a joint report by the United Arab Emirates’ COP28 presidency, the International Renewable Energy Agency- IRENA as well as the Global Renewables Alliance, it is necessary for renewable energy capacity to go beyond 11,000 GW by 2030.

Currently, coal, oil, gas, nuclear power, hydropower, and renewable energy sources are the most widely used energy sources in South Africa and some of these energy sources pose an environmental risk and contribute to climate change and global warming.

The Development Bank of Southern Africa continues to support the development and funding of different technologies, energy generation, transmission, and as a leading financier of renewable energy, the Bank is committed to supporting just energy transition in the Sub-Saharan Africa.

The Umoyilanga Hybrid Project (Project) which will provide 75 MW of net dispatchable capacity officially reached financial close on 28 November 2023 and is set to start commercial operation in March 2025. The Umoyilanga Hybrid Project will operate as a virtual power plant by integrating wind, solar PV and battery energy storage system generation from two locations that are 900 km apart. The DBSA is the sole development finance institution that provided funding to the Project alongside Nedbank and Rand Merchant Bank.

The Project, along with other hybrid projects, was named as a preferred bidder under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) in March 2021. The RMIPPPP has been designed by the mineral resources and energy department to procure 2000 MW of new generation capacity from a range of energy source technologies.

Mpho Mokwele Group Executive Transacting said the Umoyilanga Hybrid Project is a landmark transaction where a combination of hybrid technologies have been integrated in order to provide dispatchable energy and signifies the role that a DFI can play in transforming the landscape of the energy sector in South Africa.

The project will provide approximately 890 job opportunities during construction (measured in job years); during this period, more than 40% of the capital expenditure will be used to procure local goods and services. Over the 20-year operational period, 1% of revenue will be dedicated to local communities through socio-economic initiatives. The commitments align with the DBSA’s stance to making a positive impact on the lives of people in Southern Africa by enabling infrastructure investment as a lever to stimulate economic growth and social development.

The DBSA’s work in the energy sector helps strengthen the private sector’s role in driving clean energy solutions to provide renewable power at the same time reducing greenhouse gases, which are detrimental to the environment.