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The Finance Ghost sits down with Tokollo Tau from Nedbank CIB to unpack how South Africa’s energy landscape is evolving beyond the dark days of load shedding. What once felt like a permanent crisis has receded into the background, but the real story now is what’s being built in its place (like power wheeling and aggregation).

Against the backdrop of the Africa Energy Forum, the conversation explores the infrastructure and commercial models that are reshaping how electricity is generated, moved and sold across the country, unlocking new levels of flexibility and opportunity for businesses.

With practical examples like the multi‑billion‑rand Notsi Solar Project, Tokollo explains how aggregators are bridging the gap between generators and large energy users, helping to solve coordination challenges and accelerate investment in the sector. The discussion also highlights Eskom’s evolving role as an enabler of this ecosystem, and what a truly tradable electricity market could look like in South Africa.

The result is a compelling look at a market in transition and why this could mark the start of a far more competitive, efficient and investable energy future.

Key topics covered:

• What power wheeling and energy aggregation actually mean (without the jargon)
• How projects like Notsi Solar demonstrate the new energy ecosystem in action
• Why aggregators are critical to unlocking investment and reducing project risk
• Eskom’s shifting role in a more open, competitive electricity market
• The long-term outlook: towards a tradable electricity market and greater energy choice

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Transcript:

The Finance Ghost: Welcome to this episode of the Ghost Stories podcast.

Isn’t it amazing how it feels so long ago that we were checking apps? We were planning our dinner times and weekends, and if it was still the case, we’d be wondering if we’d be able to watch Bafana at the World Cup, if we’d have electricity!

Feels like years ago. And in some respects, I guess it was years ago because thankfully, the words “load shedding” have largely been banished to the history books, which is awesome.

It means that businesses are feeling a whole lot better about actually operating in South Africa. And thank goodness for that, because obviously we need all the boosts we can get to our GDP. But the local energy market has actually gotten much more exciting than us just saying, “well, load shedding is a thing of the past”.

We also now have market infrastructure in place that allows for concepts like power wheeling, energy aggregation – something that I’m certainly looking forward to learning more about.

And with Africa Energy Forum taking place essentially as we speak, we’ve got Tokollo Tau from Nedbank to help us make sense of it all. And to understand a little bit more about the evolution of the electricity market in South Africa.

So, Tokollo, thanks so much for doing this with me and I’m looking forward to these insights.

Tokollo Tau: Thank you for having me, Ghost. And a warm welcome to the listeners.

The Finance Ghost: Let’s jump straight into a little bit of jargon busting, because we’ve got concepts like power wheeling and aggregation.

For those who are not necessarily in the renewable energy space (like me, to be honest), it’s not necessarily obvious what these things are actually referring to. So maybe you can just kick us off by just explaining what power wheeling is, what aggregation is?

And then just confirming whether or not power wheeling is actually needed for aggregation. These things essentially depend on each other, right?

Tokollo Tau: That’s a fantastic place to start. Wheeling, in its simplest form, is the ability to move electricity across the grid from where it’s generated, to where it is consumed. This is done via transmission network. It’s owned by Eskom and municipalities.

You can think of this as the toll that one would pay to use the highway.

Aggregation, on the other hand, is a commercial model. It’s when an intermediary player buys power from multiple generators and sells that power to multiple customers in a structured manner.

Wheeling opens up choice, and aggregation helps efficiently organise that choice.

The Finance Ghost: So it’s safe to say that wheeling is the technology that allows us to have a scenario where there’s a windy part of South Africa or a very sunny part of South Africa, that is suitable for some kind of renewable energy that can be built there – and that can supply mines right on the other side of the country, right?

That’s the power of this thing.

Tokollo Tau: A good way for the listeners maybe is if I provide an example. We recently closed the Notsi Solar Project (Notsi), which is a large project that’s located in the Free State. The project was brought to life by Anthem, which is a private player in the energy space. The project had Discovery Green and Noah as the off takers.

Discovery Green is a good example of an aggregator that we’re discussing today, because it serves a diverse base of customers. Some of these are names that one might be aware of, such as Afrox, UCT and Impala Platinum. All of these are located across various locations in the country.

Notsi isn’t just being built for a single customer. The project illustrates how electricity can be generated and supplied to different customers and businesses across different sectors and parts of the country. This is how wheeling is making aggregation possible.

The Finance Ghost: It’s super interesting. You get these utility scale projects like the one you’ve just mentioned there.

It reminds me when there was this proliferation of these grocery apps. Just when everyone started with on-demand grocery, and I think there was one, I’ve forgotten its name, but their whole claim to fame was that they could run around and buy whatever you wanted from whichever shop you wanted.

So, you weren’t just ordering from a Checkers or a Woolworths, or a Pick n Pay, they were running around and you could buy from each of these different stores, and they would bring everything to you.

Feels a little bit like that’s what the aggregator’s role is, right? There are all these different power options out there. There’s power wheeling, there’s these projects and they focus on delivering these power sources to the customer, right?

Tokollo Tau: Yes, I would say your take is correct. The role that aggregators play, is that they’re able to source, for instance, in your example, the vegetables from one shop and then source cleaning equipment from another source and be able to deliver it all to customers.

This makes the life of the customer much easier because they never have to leave their home. It provides them with a lot more choice.

The Finance Ghost: So understandably, this spreads the load around power generation, right? Because historically that’s been our problem.

We have the transmission infrastructure, as I understand it, but generation is where we’ve struggled because Eskom just couldn’t keep up with the needs of the country’s power.

And what we’ve now seen is this big investment in electricity generation, and a whole bunch of just infrastructure-type developments to then make it possible for things to happen this way. And the way that Nedbank is then participating in this, is across both public and private sector opportunities.

So, what are the shifts that you’ve then seen in the market that are really driving this underlying evolution? Power availability must be one of them, surely cost is another. What is driving all this activity that we’re seeing?

Tokollo Tau: I would certainly say that the biggest shift that we are seeing is that businesses are moving from crisis response to strategic procurement. If I think about the conversations that we were having a few years ago with our clients, the conversations were centred around how do businesses survive load shedding.

But what we are increasingly seeing now, is they’re asking the question, how do they secure long-term, cost-effective and lower-risk power? This is a far more mature market discussion, in my opinion.

The Finance Ghost: So, Tokollo, you’ve referenced a maturing conversation and it does sound a whole lot better. We’d much rather have a world where businesses are seeing this as an investment that brings down their costs, for example, and those sort of things, rather than, “oh my goodness, do I even have power to actually operate?”

Because clearly that’s a disaster. We know the impact that had on our economy, whereas here it’s more like, “this is a business decision, we want to bring that cost down.”

So, what does that mean then in terms of us moving towards a more tradable electricity market in South Africa? Because I’ve heard this term used, but obviously as someone who’s not really in the space, I’m not exactly sure what that practically looks like. Maybe you can explain that concept of a tradable electricity market?

Tokollo Tau: Tradable electricity market simply means that customers have choice of who they buy their power from. Currently, the only choice that we have is whoever has been assigned as your distributor. This can be Eskom and in some cases, this can be municipalities.

Once you’re in a tradable market, clients can buy from multiple generators, similar to how you have the choice between MTN and Vodacom. It would be similar in that regard, in that one would have flexibility to decide who to purchase their power from.

The Finance Ghost: This is, at the end of the day, all part of Eskom’s broader reforms, right? Because they are, at the end of the day, roughly 80% of South Africa’s power generation. And they are also the transmission infrastructure to a very large extent. So, Eskom is still at the centre of all of this.

Going back over the years, I’ve heard many times about Eskom’s different business lines and how they’re focusing on different things. And this is really the transmission piece coming through.

Because technically, the power generators, these renewable energy programs, etc. – they “compete with Eskom” but actually, Eskom can participate in that ecosystem by providing the transmission, and just improving the overall South African electricity market, right?

Would that be a fair statement on how Eskom is actually thinking about this and how it all kind of works together?

Tokollo Tau: I would say you’re on the right path, Ghost. One of the biggest mistakes that people make is viewing this as a choice between Eskom and private generation.

This simply isn’t true. Eskom remains the backbone of the system. And many of the developments that we’re discussing here are only possible because of the infrastructure that’s in place. This is why I don’t see this as a story of Eskom versus private generation. It’s actually a story of how different participants are contributing to a broader, more flexible market.

I would agree with you that in today’s terms, Eskom still supplies the majority of the electricity. But the key change that we’re seeing, is its gradual move towards facilitating a more open system.

This is done by allowing third-party access to the grid and supporting the development of transmission frameworks. Eskom, by doing this, has effectively enabled others to generate and trade electricity.

The Finance Ghost: And the benefit of these aggregators, right, is they are ultimately that commercial bridge between the power-generation-type project and then the energy users on the other side, which would be large industry. In this case, they would typically be the ones engaging, I would think, with the aggregators?

And I would imagine that this unlocks projects a lot faster than perhaps some of the more traditional ways in which large projects would have come to bear fruit?

So, perhaps you can just explain the extent to which these aggregators are actually bringing some efficiency to the story as well, in terms of helping to get projects across the line and just making them economically viable and attractive?

Tokollo Tau: I would say that the main issue that the aggregators are solving is a coordination problem in the market. This is because they make it easier for supply and demand to come together quickly and efficiently.

Aggregators make it easier for large projects, such as the Notsi project, to connect with multiple customers, rather than them relying on a single buyer.

If you think of it this way, not every business needs power at the same time. And not every solar and wind project produces power in exactly the same way.

Aggregators help connect those moving parts. By working with multiple projects and multiple customers, they make the market more flexible, and they help ensure that electricity reaches where it’s needed most.

I would say that without aggregators, every company would need to effectively find its own power source.  This is not efficient, in my opinion. And aggregators providing choices to customers as they bring electricity from multiple projects and connect it with multiple customers.

This has created flexibility and has made the market easier to navigate.

The Finance Ghost: And it helps to de-risk the project, right? Because the project is now not having to go and find just one customer (on the other side of the country, potentially) and do all that work. They just need to deal with the aggregator.

And the aggregator says “Okay, cool, don’t worry, we’ve got this, we’ve got customers”. And like you say also different times in the year, seasonality – it’s almost like how a tech company will have different needs at different times of year, different times of day, where they’ve got a different load on their system and the amount of data they’re pulling. It’s a very similar situation.

These companies don’t always need the power at exactly the same time. And that’s the role that aggregators help play.

And like I say, de-risking projects which for you from a banking perspective makes their role very important, I’m sure?

Tokollo Tau: Yes. When the market was initially opened up, what we’re seeing was that the private generators that we were funding, they were entering into bilateral agreements with certain mines.

And this process was slow and cumbersome, because a mine is not necessarily versed in contracting for long-term electricity and a generator is not necessarily being efficient by looking for multiple customers. Their efficiency comes from the ability to permit, get the project constructed, get it to financial close, and get it operational.

So, it is efficient that they have an intermediary which is this aggregator, that they can contract to as the generator. And then on the other side you also have the buyers, the mines, the smelters. They simply can come to an aggregator, and an aggregator can offer them, instead of 20-year contracts, they can enter into 5-year, 10-year contracts in order to secure their power.

And because the aggregator has access to multiple generators, they can essentially tell the customer “I can give you a different load profile, I can give you electricity during the day from the sun, I can give you electricity from the wind during night times” – which then better matches the customer’s demand.

So yes, I would say it has helped the market quite credibly in my opinion.

The Finance Ghost: Yeah, it’s pretty interesting. It’s like taking a traditional business which would have product and then marketing and sales and everything else that would all normally live in one business.

But in this value chain, because of how specialised it is, because of all the regulations, because of the extent of infrastructure, it almost splits it out. It’s like the aggregators are the route to market. And the product is coming from someone else.

It just makes sense to then have these different players in the market solving different things, right?

I’m aware of examples elsewhere in Africa. For example, Africa GreenCo in Zambia. Perhaps there are some lessons that South Africa can learn from what is going on elsewhere on our continent.

Maybe you can just talk us through a little bit of what some of those lessons might be as we start to bring this to a close and talk about what the future looks like for South Africa.  

What lessons can we maybe learn from something like that in Zambia?

Tokollo Tau: I would say that the biggest lesson is that credible intermediaries matter.

In Zambia, for instance, GreenCo has replaced the need for plants to contract with the Eskom equivalent, which is ZESCO. This means that you have a party that is more bankable from a banking perspective, and it allows projects to reach financial close.

So, whether you’re looking at aggregators in South Africa or whether you’re looking at GreenCo in Zambia, I think the common theme is that the markets are becoming more investable when someone can stand in-between generators and the users of power.

And by managing the complexity and creating confidence on both sides, aggregators have made this possible. And in my opinion, this is how the transactions have moved forward and have created a real market for the power.

The Finance Ghost: So, Tokollo, we’re talking big numbers here, right? Obviously this is Nedbank CIB, so you guys are investing in – and funding – very large projects. That’s the nature of the CIB business. That’s where you’re focused.

And these are multi-billion-rand projects that we’re talking about, of which I’ve seen a couple in the headlines recently.

Perhaps you can just give a quick overview of the types of numbers we’re looking at here? This is what’s needed to move the dial, right? This is where Nedbank makes a difference and participates.

Tokollo Tau: The projects are indeed large. I mean, if you look at the Notsi project which closed earlier this year, the project is a 470-megawatt solar project, and it is close to R10 billion from a quantum perspective, because lenders only have access to the projects. So, we funded the project through project finance, which is limited recourse.

And where this is important is that the only source of repayment that lenders will have will come from the cash flows that the project generates. We are not taking any balance sheet support from anyone. The only form of repayment that we can place an emphasis on, is the project’s ability to generate cash flows in the future.

And we’ve then taken a view that we will get repaid from Discovery and Noah, who are the aggregators, and they are getting their money from the customers in the background.

So, from a bankability perspective, instead of Notsi having to source and contract with over 20 customers, for instance, it only needed to focus on two customers. This provided a lot of comfort to the lenders.

The Finance Ghost: And these are very long-term projects. This, at least, is my wheelhouse, not necessarily understanding the actual electricity side, but certainly the sort of returns you need on things and what tenure we’re looking at.

These are long-term projects and that means that you need to feel good about not just South Africa, but also the electricity infrastructure in South Africa. You’re running models that go out for a long time; and yes, you’re a debt provider, but still, you’re exposed to whether or not this thing is actually a success.

So, I guess we can safely assume that based on the level of activity here, the size of these transactions: you must be feeling quite optimistic about where the energy market is heading in South Africa?

Tokollo Tau: I would say that I’m partly optimistic, Ghost. A few years from now, what we’ll probably start to see is that businesses are going to have a lot more choice in where they buy the power from, as opposed to Eskom remaining the central person, and the only option that they have.

Private generation and wheeling, will probably start to play a bigger role than what we are seeing now.

It’s encouraging for me because we’re starting to see a lot of those building blocks already in place today, where we’re seeing projects such as Notsi come to light.

For businesses, it’s important because it’s going to give them greater flexibility in the future and it’s going to give them more certainty around energy costs and stronger long-term competitiveness in the international market.

The Finance Ghost: What I’m excited about is it also just taps into our country’s natural endowment, right? We have really windy parts of the country, but that might not be where the big power user actually is.

We have areas where the sun just doesn’t stop shining. Once again, the power user might be somewhere else. So, between wheeling and aggregation, it just makes sense. It just connects the dots here and it really helps to create a far more efficient market, which is exciting.

So perhaps a last question then, and then I’ll let you go off and do this conference and do all these important things that you’re doing for our country – do you feel like we’ll perhaps look back on this as a period that was the beginning of what is a fundamentally different energy market in Southern Africa? It sounds like the answer would be yes, but I want to hear it from you.

Is this the beginning of something big?

Tokollo Tau: I’d like to believe so, Ghost. I think we’re headed in the right direction. If one just looks at where the South African electricity market is right now and where it’s headed relative to a few years ago, there’s a lot of appetite on the Southern African power pool. There’s a lot of movement in the Zambia region with the emergence of your GreenCos and Solarcentury.

I would say I’m very optimistic that we’re headed in the right directions and we are beginning to see a more liberal electricity market as we head towards the future.

The Finance Ghost: Fantastic, Tokollo. Thank you so much. I would encourage anyone who wants to reach out to you or connect to go and find you on LinkedIn. And of course, people can also go and visit cib.nedbank.co.za, go and look through all of the solutions there and many of the deals that Nedbank has been involved in.

There’s always been a strong renewable energy slant to the Nedbank business. They are the green bank, not just in colour and in brand, but also in spirit.

I have some experience in working in the banking sector to be able to say that, and it’s great to see this coming through.

So, Tokollo, thank you so much and enjoy the conference.

Tokollo Tau: Thank you, Ghost, and thank you to our listeners.