South African renewable energy company SolarAfrica has raised $94 million in debt funding to develop a large-scale solar power project in the country’s Northern Cape, as private players step in to address persistent grid instability and energy shortages.
The funding will be used to build SunCentral 2, a 114-megawatt (MW) solar plant designed to supply electricity to industrial and commercial customers through South Africa’s national grid. Once completed, the project is expected to reduce businesses’ dependence on Eskom, the country’s state-owned power utility, which continues to struggle with ageing infrastructure and recurring outages.
Moving Beyond Rooftop Solar
Unlike SolarAfrica’s earlier focus on rooftop solar installations, SunCentral 2 represents a shift toward utility-scale renewable energy generation. The project will operate under a “wheeling” model, allowing electricity generated at the plant to be transmitted through the national grid and delivered to businesses via long-term power purchase agreements.
This approach enables companies to access renewable energy without the upfront cost of installing solar panels on their own premises, while still benefiting from stable and predictable power supply.
According to SolarAfrica, the wheeling model is particularly attractive to energy-intensive industries that require more electricity than rooftop systems can realistically provide.
Funding Backed by Local Banks
The $94 million debt facility was provided by Rand Merchant Bank and Investec, two of South Africa’s leading financial institutions. SolarAfrica said the funding marks a major milestone in its transition from small-scale solar deployments to infrastructure-level energy projects.
“This funding enables us to scale meaningfully and deliver power solutions that businesses can rely on,” said David McDonald, CEO of SolarAfrica. “Companies want electricity that is clean, affordable, and consistent.”
Strengthening Grid Infrastructure
Beyond power generation, SolarAfrica is also investing in grid infrastructure, including the Main Transmission Substation, which is designed to handle up to 2 gigawatts (GW) of electricity. The investment is expected to support not only SunCentral 2 but also future renewable energy projects seeking grid access in the region.
By expanding transmission capacity, the project helps address one of South Africa’s major energy bottlenecks: limited ability to move power from generation sites to end users.
Private Sector Steps In as Eskom Struggles
SolarAfrica’s expansion comes amid ongoing challenges at Eskom, including transmission constraints, maintenance backlogs, and years of load shedding that have disrupted economic activity.
As power outages persist, businesses across South Africa are increasingly turning to private energy providers to secure reliable electricity. Projects like SunCentral 2 position companies such as SolarAfrica as industrial power suppliers, helping to fill gaps left by the national grid.
The company noted that the $94 million raise is debt financing rather than equity, allowing it to expand while retaining operational control.
A Growing Renewable Pipeline
SolarAfrica has already completed SunCentral 1 and is preparing SunCentral 3, with the three phases expected to reach a combined capacity of 342 MW. Beyond these projects, the company says it has a 3 GW renewable energy pipeline under development across South Africa.
If delivered as planned, SunCentral 2 could serve as a blueprint for how private-sector renewable energy projects can support industrial growth, grid resilience, and South Africa’s transition to cleaner energy.
As businesses continue to seek alternatives to unreliable grid power, SolarAfrica’s utility-scale strategy highlights the growing role of innovation and private investment in reshaping Africa’s energy landscape.
