Finance

R320 billion Eskom mega-project coming to South Africa

Caitlyn Hilliard-Lomas

 ·3 Feb 2026

The Nedbank Capital Expenditure Project Listing shows that fixed investment plans have increased significantly, with 27 new mega-projects worth R705.6 billion announced last year – including Eskom’s new project valued at R320 billion.

Nedbank’s listing indicates 16.4% year-over-year (YoY) growth in fixed investment plans for 2025, driven primarily by an increase in private-sector announcements.

Nedbank noted that public corporations now account for 45% of the total value of planned projects. In contrast, announcements of general government projects have decreased significantly.

The electricity, gas, and water sectors led investment plans, with projects totalling R415.6 billion.

Nedbank highlights three primary trends driving this increase: private sector resurgence, energy sector dominance, and public sector divergence.

Private sector project announcements more than tripled, rising from R116.2 billion in 2024 to R382.5 billion in 2025.

This growth is driven by improved macroeconomic conditions, including subdued inflation, a stronger rand, and South Africa’s removal from the grey list, all of which have reduced barriers to new investment.

In the private sector, Vodacom’s ‘Vision 2030’ stands out as the largest private-sector announcement in 2025, with a budget of R85.2 billion for network enhancements and nationwide 5G deployment.

Energy sector investments are largely centred on the electricity, gas, and water sector, which accounts for R415.6 billion – roughly 60% of the total.

This highlights the urgent need to tackle the energy crisis and shift to renewable energy.

Although public corporations such as Eskom represent 45% of the total value, the government’s announced investments have sharply decreased to R2.9 billion, down from R204 billion in 2024.

This decline is due to the government’s current focus on executing the large number of projects announced last year, rather than announcing new ones.

“Many of the projects announced in 2024 have yet to break ground. Until there is tangible progress –particularly in energy, water, logistics and municipal services – the private sector is likely to remain hesitant,” said Nedbank.

Eskom’s R320 billion Infrastructure Overhaul is the largest project in the 2025 list. This five-year plan by the state-owned utility makes up 45.3% of all project announcements and 77% of initiatives in the electricity, gas, and water sectors.

The overhaul aims to resolve South Africa’s energy crisis by allocating funds across three key areas: approximately R139.5 billion for generation, about R132 billion for transmission to improve and expand the grid, and R44 billion for distribution network upgrades.

In addition to ensuring immediate stability, the investment is intended to promote diversification of the energy mix.

Eskom plans to expand infrastructure, especially transmission networks, to help facilitate the transition toward greater integration of renewable energy sources into the grid.

“Most critically, electricity and logistics costs need to fall sharply to restore competitiveness and unlock meaningful private sector investment,” said Nedbank.

“The public sector also appears better placed to execute its ambitious infrastructure plans. Despite pockets of improvement, the underlying conditions for broad-based investment growth remain weak.”

Nedbank forecasts gross fixed capital formation (GFCF) will rise from -2.3% in 2025 to 2.0% in 2026, with an average growth of 1.9% expected over the following three years.

Nedbank said investors are expected to stay cautious due to high operating expenses, excess capacity in certain sectors, and increased US tariffs present downside risks, which could possibly lead some firms to reduce operations.

This could slow the recovery of private-sector capital spending.

Additionally, Nedbank pointed out that high public debt, limited fiscal flexibility, and ongoing uncertainty about the government’s reform efforts may further undermine confidence. 

27 new projects worth R705.6 billion