South Africa’s utility provider Eskom has signed a commercial lease and land use agreements with four independent power producer investors to develop clean energy projects, News24 portal reported.

The investors will lease 6,184 hectares of land for 25 to 30 years each, contributing an estimated 2,000 MW to the national electricity grid.

The land leases will attract an estimated investment of some 40 billion rands ($2.18 billion) to areas traditionally associated with coal-fired electricity generation, focusing on energy transition to a lower carbon economy, said Eskom CEO André de Ruyter. 

These lease agreements come after Eskom issued a request for proposal in April. The successful bidders are HDF Energy South Africa, Red Rocket SA, Sola Group and Mainstream Renewable Power Developments South Africa.

Investor appetite for land with grid connection was shown by the fact that the bids were three times oversubscribed, indicating that further land parcels will receive favourable consideration, the company said.

Eskom will be issuing new tenders for other land parcels every quarter to enable and accelerate investment in new renewable generation capacity, the news portal said. 

( Editing by Seban Scaria seban.scaria@lseg.com )