Power Purchase Agreements — How Sonani Will Sell Its Electricity

A Power Purchase Agreement, or PPA, is the contract that makes a renewable project financially viable. It's a legal agreement between a power generator and a purchaser for the sale of electricity, typically ranging from 5 to 25 years. Rates can be fixed or include annual escalations as negotiated.

Sonani's potential offtakers are strategically located. The project sits in the center of the industry-rich Nkangala District, between Middelburg and eMalahleni. Potential customers include major mining operations from companies like Seriti, Glencore, and AfriCoal, along with industrial giants like Columbus Stainless, Samancor, Thos Begbie, Transalloys, and Ferrometals.

In August 2025, Eskom launched its first-ever Renewable Energy Offtake Programme, inviting bids for PPAs ranging from 5 to 25 years. Eskom itself becomes a potential offtaker for Sonani — a mutually beneficial arrangement where Eskom gains generation capacity while Sonani gains transmission access. The pre-feasibility study from the CSIR recommended a PPA rate of 1.25 Rand for all current and future agreements. The key requirements for offtakers are security of supply, price stability, reliability, environmental sustainability, and regulatory compliance — all of which Sonani's hybrid facility is designed to deliver.