Naos-1 Financial Close Sets a New Benchmark: What South Africa's First Utility-Scale Wheeling Hybrid Means for C&I Off-Take Structuring

Naos-1 Financial Close Sets a New Benchmark: What South Africa's First Utility-Scale Wheeling Hybrid Means for C&I Off-Take Structuring

By the SolarXgen Editorial Team | 23 April 2026

When SOLA Group announced financial close on the Naos-1 Hybrid Solar and Battery Project in February 2026, the South African energy sector did not just gain another large project on a growing list. It gained a proof of concept — one that every C&I energy buyer, IPP developer, and project financier should be studying closely. For those of us who develop, structure, and finance private power at SolarXgen, Naos-1 is not merely a headline. It is a field-tested template for the next generation of wheeling off-take agreements in this market.

The Project in Numbers

SOLA Group achieved Financial Close on its Naos-1 Hybrid Solar and Battery Project, a 300 MW (435 MWp) solar PV facility with 660 MWh of battery energy storage (BESS). Located near Viljoenskroon in South Africa's Free State province, the plant combines 300 MW (435 MWp) of solar capacity with 660 MWh of battery storage. Total installed battery capacity is 855 MWh, with 660 MWh contracted to Sasol and Air Liquide — the project's two anchor off-takers.

Construction is being carried out by a joint venture between SOLA Build and WBHO, and commercial operations are targeted for the first half of 2028. The financing consortium that enabled close is a who's-who of South African institutional capital: the Development Bank of Southern Africa led the process, with participation from Absa, Nedbank, RMB, and Investec.

Why This Project is a First — and Why That Matters

Naos-1 marks a major milestone in South Africa's private power market, being the country's first utility-scale solar PV and battery energy storage project purpose-built for wheeling to private end-users across the grid. That distinction carries significant commercial weight. Previous wheeling projects — including SOLA's own 195 MW Springbok plant, described as the country's largest operational wheeling facility when commissioned in 2025 — delivered solar energy alone. Naos-1 layers in dispatchable storage at utility scale, changing the commercial proposition for off-takers entirely.

According to SOLA, Naos-1 is the first utility-scale solar-plus-storage project purpose-built to supply private end users using a time-of-use contract structure. This is the critical innovation. It means the PPA is not priced on a flat, daytime-only energy credit. The BESS unlocks evening peak dispatch, aligning generation economics with the very TOU periods that drive the largest cost exposure for industrial buyers.

The Off-Take Structure: What C&I Buyers Need to Understand

Eskom's FY2026 tariff changes, approved by NERSA and effective from 1 April 2025, have made the stakes sharper for every energy-intensive business. Tariffs for Eskom direct customers increased by 12.74% effective on 1 April 2025, while tariffs for municipal bulk purchases rose by 11.32% from 1 July 2025. Updated TOU schedules now split energy charges into Peak, Standard, and Off-peak rates, with evening peaks extending to three hours on weekdays and Sunday evenings reclassified from Off-peak to Standard.

For C&I off-takers on Megaflex or equivalent TOU tariffs, this restructuring means that procuring flat daytime-only solar via a wheeling PPA leaves evening peak exposure almost entirely unhedged. Naos-1 solves this structurally. Its hybrid design allows solar power generated during the day to be stored and dispatched during peak demand periods, particularly in the evening, ensuring a more reliable supply of dispatchable electricity to industrial customers.

The PPA terms have not been publicly disclosed, but critically, SOLA MD Commercial Jonathan Skeen has confirmed that the tariff is well below prevailing Eskom rates and highly competitive. Given that Eskom's average standard tariff stands at approximately 220.92 cents per kWh as of 1 April 2025, the headroom for a well-structured solar-plus-storage wheeling tariff to deliver material savings — including across peak TOU windows — is substantial.

On the regulatory side, NERSA published the Regulatory Rules on Network Charges for Third-Party Wheeling of Energy on 3 March 2025, seeking to achieve non-discriminatory access to and use of networks, transparency and unbundling of tariff structures, and regulatory certainty. This framework, long awaited by developers and off-takers alike, provides the legal and commercial scaffolding that projects like Naos-1 require to achieve bankability at scale.

It is equally important to note how wheeling credits work in practice. The customer still receives their bill for 100% of consumption, but an additional bill is raised with the credit of the wheeled energy based on the TOU energy charge less energy losses. Critically, energy is credited in the same TOU periods as what is generated — there is no swapping of energy produced in standard periods for energy consumed in off-peak periods. This is precisely why BESS dispatch capability within a wheeling hybrid unlocks genuine TOU bill savings that a solar-only wheeling arrangement cannot match.

The Financing Architecture: A Multi-Lender Blueprint

The Naos-1 transaction is significant not only for the project itself but for the financing structure it has established. The project secured funding through a multi-lender project finance process involving South African commercial banks, with the Development Bank of Southern Africa as the largest senior debt financier. The participation of Absa, Nedbank, RMB, and Investec alongside DBSA signals that South African commercial banks are now genuinely comfortable underwriting utility-scale hybrid storage risk — a major step from even two years ago when BESS in PPAs was considered a credit risk anomaly by most local lenders.

This strong financial backing highlights investor confidence in South Africa's growing private power market. For developers attempting to replicate this structure, the critical bankability ingredients are evident: anchor-grade off-takers with investment-quality balance sheets, long-term PPAs with clearly defined TOU dispatch obligations, and a regulatory framework (now in place via the March 2025 NERSA rules) that gives lenders certainty on wheeling credit mechanics and network charges.

Market Context: The Wheeling Pipeline is Real and Growing

Naos-1 is the flagship, but it sits within a rapidly expanding market. South Africa remains the absolute leader for wheeling projects in Africa, with 21 out of 22 identified wheeling projects under development on the continent based in South Africa. The C&I market remains strong, with nearly 6 GW of captive projects and 1.7 GW of wheeling projects announced in 2024 alone.

South Africa's cumulative solar capacity has crossed a milestone: according to SAPVIA, cumulative solar capacity now likely exceeds 10 GW, maintaining the country's position as Africa's largest solar market. While utility-scale remains the largest segment by installed capacity, the C&I market is arguably the strongest-performing relative to fundamentals. Key C&I drivers include above-inflation tariff increases — after electricity tariffs increased by 12.74% in April 2025 — along with carbon border adjustment mechanisms, energy cost management, and operational continuity requirements.

The emergence of trader-led aggregation is adding further commercial sophistication. A major milestone in 2025 saw a single utility-scale solar farm enable the wheeling of energy to multiple corporate customers simultaneously in a "one-to-many" generation model. Trader-led aggregation is set to become the dominant commercial model in 2026 as wheeling rules mature, while hybrid solar and storage projects are proving dispatchable renewables can serve heavy industry at scale.

What SOLA's Pipeline Signals for the Broader Market

SOLA Group has not treated Naos-1 as an isolated transaction. With a further 600 MW of hybrid solar and battery projects at a highly mature development stage, the SOLA Group is positioned at the forefront of advancing the modernisation and decarbonisation of the South African power system. SOLA Group is aiming to build 2 GW of solar and 5 GWh of storage by 2030.

Meanwhile, the broader national planning environment supports this direction. South Africa published a new Integrated Resource Plan in November 2025, which aims for 28.7 GW of new solar by 2039 and is the first IRP with zero new coal. Private wheeling and hybrid development is aligned with, not in tension with, the IRP's trajectory.

Implications for SolarXgen Clients and the C&I Developer Ecosystem

At SolarXgen, we draw four clear implications from the Naos-1 close for C&I off-take structuring:

• TOU alignment is no longer optional. The Eskom tariff restructure of April 2025 makes it commercially negligent to structure a wheeling PPA without explicit evening peak dispatch through BESS. The tariff delta between peak and off-peak is wide enough that the savings case for a hybrid is decisive.
• Anchor off-taker quality determines bankability. Multi-lender project finance at this scale depends on off-takers with strong balance sheets and long-term operational necessity for energy — the Sasol/Air Liquide dynamic is the clearest possible illustration. C&I developers should target anchor tenants with 15+ year energy commitments.
• The March 2025 NERSA wheeling rules are a green light. The new Third-Party Network Charges Rules provide IPPs, NSPs, and buyers the regulatory foundation needed to expand generation capacity and enhance market efficiency. Developer hesitancy over regulatory risk for wheeling should now give way to structuring discipline.
• DBSA and the commercial banks are ready. The Naos-1 financing consortium confirms that hybrid solar-plus-storage is now a bankable asset class in South Africa. The template exists. The challenge for developers is replication speed and off-taker origination quality.

Conclusion

Naos-1 is not simply a big project. It is the answer to a question the South African energy market has been asking for years: can utility-scale, dispatchable, privately financed renewable energy be delivered to private industrial off-takers via wheeling, at competitive tariffs, with full project finance? The answer, as of February 2026, is an unambiguous yes. When complete, Naos-1 will serve as a benchmark for utility-scale solar-plus-storage wheeling to private end-users — and a signal to the broader market that large-scale, dispatchable, privately financed renewable energy in South Africa is not only viable, but accelerating.

For C&I buyers still weighing their options, the question is no longer whether hybrid wheeling works. It is whether your current energy cost structure can afford to wait.