South African solar developer SolarAfrica reached financial close this February on SunCentral 2, a 114-megawatt solar plant in the Northern Cape backed by R1.5 billion ($94 million) in project finance debt from Rand Merchant Bank and Investec. The headline figures — among the largest commercial energy deals in South Africa in the first quarter of 2026 — are significant. But the more consequential story is not the capital raise. It is what the money is building: a commercial-grade alternative to Eskom for South African businesses that can no longer afford to wait for the utility to fix itself.

The Model: One Solar Plant, Many Businesses

SunCentral 2 is not a typical power purchase agreement where a generator signs a long-term deal to supply one buyer. SolarAfrica has built its flagship programme around a one-to-many wheeling model — a structure that allows a single utility-scale solar facility to deliver power across Eskom’s existing transmission grid to multiple commercial and industrial customers simultaneously.

Electricity wheeling, in its simplest form, is the practice of injecting power into the national grid at one point and withdrawing an equivalent amount at another. Businesses pay a wheeling charge to Eskom for using its transmission infrastructure, but the electricity they receive is sourced from the solar plant rather than from Eskom’s coal-heavy generation fleet. The net effect: up to 50% cheaper electricity that is 100% renewable, with no upfront capital investment required by the offtaker.

For large power users, the economics are difficult to ignore. Eskom’s Megaflex tariff — the pricing structure applied to large commercial and industrial customers — rose 12.74% in April 2025 and faces a further increase in the 2026/27 financial year. The compounding effect of annual Eskom tariff hikes has made grid electricity one of the fastest-growing operational cost line items for South African manufacturers, data centres, and retail property portfolios. SolarAfrica’s wheeled rate, locked in through a power purchase agreement with clear escalation terms, offers both a cost saving and predictability that Eskom cannot match.

Who Is Buying

Signed offtakers for Phase 1 of the SunCentral programme include Vantage Data Centers, listed property fund ATTACQ, and energy trader Enpower Trading. The three names illustrate the breadth of sectors the wheeling model is penetrating.

Vantage Data Centers operates hyperscale facilities that run on power 24 hours a day. For a company under growing pressure from global clients to demonstrate green energy credentials, wheeled solar at sub-Eskom pricing addresses both a cost problem and an ESG reporting requirement simultaneously. ATTACQ, which manages commercial property assets including Waterfall City in Midrand, faces electricity costs as one of the largest variable expenses across its retail and office portfolio. Enpower Trading’s participation signals that the aggregator layer — entities that bundle smaller consumers into wheeling pools — is already active.

SolarAfrica describes the Phase 1 customer base as commercial and industrial businesses seeking “price certainty and cost efficiencies.” The company began delivering wheeled power in 2026, with Phase 1 capacity made available on a first-come, first-served basis.

The Infrastructure Bet Inside the Deal

What makes SunCentral 2 structurally unusual is not just its scale or its commercial model. SolarAfrica has self-funded construction of a Main Transmission Substation with a 2-gigawatt handling capacity — and when the project is complete, that substation will be transferred to Eskom at no cost to the utility (per SolarAfrica’s financial close announcement).

This is private capital building public grid infrastructure. In exchange for financing a piece of national transmission network that Eskom would otherwise have to fund itself, SolarAfrica secures the grid access its programme depends on. The substation unlocks connectivity for the full SunCentral programme: three 114MW phases totalling 342MW in Phase 1, with the broader SunCentral ambition stretching to 1 gigawatt. SolarAfrica’s full development pipeline stands at approximately 3GW.

For Rand Merchant Bank and Investec — two of South Africa’s most sophisticated project finance lenders — backing this structure is a statement about the bankability of privately financed public infrastructure. The deal demonstrates that South African capital markets will finance renewable energy projects that embed grid investment, provided the regulatory framework is credible and the offtaker base is diversified.

NERSA Has the Framework. The Question Is Speed.

The wheeling model SolarAfrica is deploying is legally grounded in South Africa’s electricity regulatory architecture. The National Energy Regulator of South Africa (NERSA) has approved National Wheeling Rules establishing non-discriminatory grid access for private generators, including standardised charges for the use of transmission and distribution infrastructure by third-party power producers. The framework mandates cost-reflective tariffs, transparent unbundled pricing, and regulatory oversight of access terms.

In practice, what NERSA’s framework enables is a functioning market for trader-led wheeling. Market analysts tracking South Africa’s electricity sector expect trader-led models — where an intermediary aggregates multiple generators and buyers — to become the dominant commercial structure in 2026, replacing the simpler bilateral deals that characterised the early wheeling market.

The regulatory picture is not without complexity. As recently as February 2026, Eskom and NERSA paused a court dispute over electricity trading licences, a signal that the legal architecture underpinning the competitive generation market is still being finalised. SolarAfrica’s project operates under existing NERSA-approved wheeling tariffs, but the broader market liberalisation push — including a shift toward a multi-market structure with a competitive wholesale segment — remains work in progress.

The Broader Signal

SunCentral 2 is not the first large wheeling deal in South Africa, but at 114MW with a publicly named, diversified offtaker base and two major bank lenders at financial close, it is the most visible demonstration yet that utility-scale private solar via wheeling has crossed into the mainstream of South African commercial energy procurement.

The model it represents has direct implications for Eskom’s revenue outlook. Every megawatt-hour that a C&I customer sources from wheeled solar is a megawatt-hour not purchased from the utility. As the wheeling market scales — SolarAfrica alone has a 3GW development pipeline — the pressure on Eskom’s commercial customer base intensifies. The utility’s response, beyond the ongoing court proceedings with NERSA over trading licences, will define whether the transition to a competitive electricity market in South Africa accelerates or stalls.

For now, businesses with the energy volumes to qualify are not waiting. Vantage Data Centers, ATTACQ, and Enpower Trading have already made their choice.