Cape Town's Pooled Wheeling Model Is Now Live: What South Africa's First Multi-Property Renewable Allocation Means for C&I Portfolio Buyers Structuring Municipal Wheeling Contracts in 2026

A Structural Shift, Not Just a Pilot

Something fundamentally different happened in April 2026 on Cape Town's municipal grid. The City of Cape Town, Etana Energy, and Growthpoint Properties completed South Africa's first pooled renewable electricity wheeling allocation across multiple properties connected to a municipal electricity network. For C&I portfolio buyers who have spent years navigating the one-to-one rigidity of bilateral power purchase agreements, this is the inflection point they have been waiting for.

At SolarXgen, we have been structuring wheeling contracts alongside municipal frameworks since the earliest pilot phases. What the Cape Town pooled model proves — with live data, real buildings, and real tenants — is that the fundamental commercial obstacle to portfolio-scale renewable procurement has been solved. The question now is: how fast can other C&I buyers structure their own access to it?

How the Pooled Model Actually Works

The new model allows renewable electricity generated remotely to be dynamically allocated across multiple customer sites connected to the city's grid, rather than matching supply to individual properties on a one-to-one basis. This is a critical distinction. Traditional bilateral wheeling ties a specific generator output to a specific offtake point — creating settlement headaches every time consumption patterns shift, tenants vacate, or load profiles change seasonally.

Pooled wheeling lets electricity from one or more remote generation sites be allocated across a portfolio of customers on a grid. By matching supply and demand across the portfolio, rather than site by site, it creates a simpler, more flexible and scalable way to allocate and settle electricity.

Etana acts as the licensed trader and single point of accountability, settling variable electricity charges across the portfolio. That simplifies billing for the municipality and reduces the supply-demand matching risk that has made single-site power purchase agreements cumbersome for businesses with multiple properties.

The Generation Asset: Boston Hydro

The generation backbone of the pilot is a purpose-built, baseload asset — not a solar park with intermittency challenges. Serengeti Energy developed, constructed and operates the Boston Hydro plant, a 5MW run-of-river facility on the Ash River that forms part of the Lesotho Highlands Water Project. The R390 million project forms part of the Lesotho Highlands Water Scheme near Clarens and is expected to operate for more than 40 years.

The plant will generate approximately 30GWh of renewable electricity annually, providing reliable 24/7 baseload power to Growthpoint's eco₂ network through Etana Energy's wheeling framework. For C&I buyers evaluating renewable procurement, baseload hydro as the anchor generation source dramatically reduces the supply-demand mismatch risk that plagues solar-only wheeling arrangements.

Growthpoint Properties has acquired a 30% stake in the R390-million plant and has exclusive access to all of the 30GWh of renewable electricity generated by the plant annually, via a 195GWh power purchase agreement with licensed energy trader Etana Energy. The PPA provides for a 5.5% tariff escalation per year for energy supplied by Boston Hydro. Buyers should benchmark this escalation against Eskom's municipal bulk tariff trajectory: municipal bulk purchases are adjusted by 9.01% effective 1 July 2026 — making the Boston Hydro escalation rate materially below the regulated tariff increase for this cycle.

Five Buildings Live — Thirty-Plus in the Pipeline

The arrangement currently supplies five Growthpoint buildings, including its newly refurbished 36 Hans Strijdom foreshore building, which underwent an environmentally innovative retrofit and is now fully powered by renewable energy. Occupied by global investment manager Ninety One, the office building sources 100% of its grid electricity through the pooled renewable allocation. The other four buildings are Constantia Village Mall, Centennial Place in Century City, Montclare Place in Claremont, and Newlands on Main.

The scale-up is already committed. Growthpoint plans to expand the Cape Town pool to more than 30 of its properties — a mix of retail, logistics, industrial, office, healthcare and student accommodation — in the coming months. The V&A Waterfront is also lined up to draw from the pool.

Critically, the Boston Hydroelectric Plant is the first of several generation facilities that will supply the Etana pool in Cape Town. More are planned to come online in the coming months, further expanding renewable electricity supply to Etana's customers within the municipality. This signals that the pool itself will deepen — creating more headroom for new C&I entrants beyond the Growthpoint portfolio.

What This Means for C&I Portfolio Buyers Structuring Contracts in 2026

From our on-the-ground experience at SolarXgen structuring municipal wheeling engagements, the Cape Town pooled model resolves four persistent pain points that have stalled C&I portfolio procurement:

• Single-point billing complexity: The arrangement enables greater flexibility in balancing electricity supply and demand across a portfolio of buildings while simplifying settlement and billing processes.
• Supply-demand mismatch at site level: As Etana CEO Evan Rice noted, the model "demonstrates the viability of allocating renewable electricity across multiple customers, highlighting how traders can effectively mitigate and manage the risk of mismatched supply and demand at individual generator and customer level."
• Municipal revenue neutrality: Under the wheeling credit method, the billing system is adjusted to credit the customer at the WEPS less losses credit rate for all energy wheeled, since the municipality did not have to purchase this electricity from Eskom — meaning municipal revenue before wheeling equals municipal revenue after wheeling. This resolves the long-standing political objection from municipalities concerned about revenue erosion.
• Regulatory access: The energy wheeling frameworks and tariffs are unlocking the potential for significant private sector investment in renewable energy generation by removing some of the geographical location-based limitations and addressing customers' commitments towards renewable energy consumption by 2030.

Etana CEO Evan Rice said the model addressed what has been one of the most contentious questions in the wheeling debate: whether municipalities lose revenue when corporate customers procure power directly from independent producers. He declined to quantify the saving Growthpoint achieves under the arrangement, citing commercial sensitivity, but confirmed there was a saving after all charges, including those related to wheeling.

Contract Structuring: Key Considerations for 2026

For C&I portfolio buyers looking to replicate or join a similar pooled structure, the Cape Town model provides a clear contractual architecture to follow:

• Licensed trader as intermediary: The trader (in this case Etana) holds the licensed electricity trader designation, manages the Eskom-to-municipal grid wheeling agreement, and issues consolidated invoices to portfolio offtakers. This single-counterparty structure dramatically reduces legal complexity for multi-site buyers.
• Voltage eligibility: Customers must be at a medium or high voltage connection level, i.e. 11kV to 132kV. Generators must be at a medium or high voltage connection level, i.e. 11kV to 132kV. Buyers with low-voltage connections at individual sites need to factor in potential grid upgrade costs.
• Tariff escalation benchmarking: With the 2026/2027 Eskom tariffs adjusted in accordance with NERSA's MYPD6 decisions, effective from 1 July 2026 for local authority (municipal) tariffs, locking in a private PPA with a fixed escalation trajectory remains the most powerful hedge available to C&I buyers in the current cycle.
• I-REC certification: Tenants in wheeling-supplied buildings can sign up for International Renewable Energy Certificates (I-RECs) to advance their own sustainability goals and report certified emissions reductions aligned with evolving IFRS sustainability reporting standards — or trade their I-RECs. For JSE-listed tenants and multinationals with Scope 2 disclosure obligations, this is a material differentiator.

The Broader Market Signal

The model follows Cape Town's municipal wheeling pilot in 2023, which laid the groundwork for more complex trading structures, as municipalities and large energy users turn to alternative electricity supply arrangements amid rising tariffs, constrained grid capacity, and mounting pressure to decarbonise energy consumption.

The project is the result of more than 18 months of collaboration between the city, Etana Energy and Growthpoint, with support from Eskom Distribution Western Cape. This timeline is instructive: portfolio buyers beginning contract structuring work now should anticipate a 12–18 month lead time to first allocation, assuming the municipality, trader, and generation asset are already identified.

Cape Town stands proudly as South Africa's leading metropolitan championing a just energy transition and pioneering innovative approaches informed by progressive policy shifts that have not only liberalised the energy market in the city but will also secure renewable energy to power up communities and businesses for decades ahead.

At SolarXgen, we are actively working with C&I portfolio clients to map their assets against emerging pooled wheeling frameworks in Cape Town, Johannesburg, and Ekurhuleni. The Growthpoint-Etana-Cape Town model is the proof of concept the market needed. The window to structure early-mover agreements — before pool capacity is fully committed — is open now.