Financing and ownership models for municipal embedded generation

Municipalities in South Africa face intersecting challenges in the electricity sector. These include increasing electricity costs, unstable supply, and decreasing revenue as users opt for own-generation solutions. Embedded generation, which is the production of electricity at a local site and connected to the local electricity grid, presents potential solutions at the municipal scale. It can be implemented in different ways to align with different municipal realities and objectives. However, many of the options such as public private partnerships, or limited recourse/project finance, are unfamiliar for municipalities and require building a new set of capabilities. The main aim of this report is to provide guidance and build capabilities of municipalities, and enable them to assess financing and ownership models before beginning an embedded generation project.