Investec gains licence to trade electricity in South Africa

From the newsletter

International bank and wealth manager Investec has become the second financial institution in South Africa to receive an energy trading licence. The move signals a shift in the role of banks, from financing projects to directly participating in the country’s power market as they seek a larger stake in the country’s growing energy sector.

• Investec is now positioned to offer more than traditional financial services. With its new licence, the bank can trade electricity directly, providing tailored solutions that tackle rising tariffs and growing power demand.

• South Africa’s energy trading space has already drawn a range of new entrants, with at least ten licences issued so far. These include Lyra Energy Trading, backed by leading independent power producer Scatec, and STANLIB Asset Management.

More details

• For corporate clients and independent power producers (IPPs), Investec promises a one-stop shop that combines funding solutions and offtake arrangements. The bank has already announced its first project, procuring solar power from the Ilikwa Solar PV Facility in the Free State, which is under construction and due online in the second quarter of 2026.

• The National Energy Regulator of South Africa (NERSA) has already issued trading licences across several categories. GreenCo Power Services (Pty) Ltd and Enpower Trading hold both domestic trading licences and import/export licences, allowing them to trade power across borders within the SADC region. GreenCo has also secured a 20-year licence from Zambia’s Energy Regulation Board (ERB), strengthening its position as a regional energy trader.

• Other entrants are also expanding competition in the market. Lyra has been awarded a licence to serve commercial and industrial users, while EXSA operates as a licensed trader, sourcing renewable power and wheeling it to corporate clients. Meanwhile, Sasol has applied for a licence to gain greater flexibility as both a buyer and investor in renewable energy. 

• According to Mpho Modise, Head of Renewable Energy Trading at Investec, “This licence is more than a regulatory milestone landmark – it’s about unlocking competitive advantage for our clients. As South Africa navigates rising energy costs and ongoing supply challenges, we are focused on providing innovative, cost-effective solutions that not only future-proof businesses but also accelerate the shift to renewable energy.” 

• The trend also signals a broader rethinking of the financial sector’s role in the energy transition. By directly engaging in electricity trading, banks are embedding themselves in the value chain, not just as financiers but as active market makers. This could accelerate the scale-up of renewable projects by offering developers guaranteed offtake pathways and simplifying access to capital.

• Still, challenges remain. Grid constraints, regulatory bottlenecks and the need for significant transmission upgrades could limit how quickly traded power reaches end-users. Transmission infrastructure developments should be fast-tracked, and the private sector should play a major role in this, given the high cost of such projects.

Our take

• Banks bring with them financial muscle and can bundle financing and offtake agreements, creating one-stop shops that reduce barriers to renewable adoption.

• By acting as traders and off-takers, banks can de-risk projects for IPPs, unlocking cheaper capital. This could expand project pipelines faster, especially for mid-sized solar and storage assets that often struggle to secure bankable offtakes.

• While trading initially targets large industrial clients, competitive markets could, over time, extend to small businesses and even households. If realised, this would reshape South Africa’s entire electricity landscape, offering choice far beyond Eskom.