In another pioneering step to reduce reliance on Eskom, the City of Cape Town will pioneer a municipal‑level waste‑to‑energy procurement using a competitive Power Purchase Agreement model. Tenderers are invited to participate in this innovative programme. Read more below:
The City intends to procure bulk electricity depending on the commercial viability of at least 5MWac from waste-to-energy Independent Power Producers (IPPs) through Power Purchase Agreements (PPAs) for up to 20 years. For the contract to be commercially viable, energy pricing must be lower than Eskom’s equivalent tariff and emissions must also be lower than Eskom’s grid emissions factor. Tender submissions close on 29 May 2026.
One or multiple Power Purchase Agreements may be awarded, depending on financial and technical feasibility. All green attributes, including Renewable Energy Certificates (RECs) and carbon credits, will be transferred to the City.
‘In line with our energy strategy and Mayor Geordin Hill-Lewis’s Mayoral Priority Programme for Energy, the City continues to take decisive steps to reduce our reliance on Eskom and to shield residents from rising electricity costs. The City spends approximately 70% of its tariff income to buy bulk energy from Eskom. As it is our single largest input cost, it is vital that we identify ways to reduce how much Eskom affects electricity prices, to protect residents and businesses from rising electricity costs and the overall cost of living.
‘We view Waste‑to‑Energy as an important part of our diversified power procurement strategy that brings new, cleaner, and more reliable options into the City’s energy mix. This is one of South Africa’s first municipal‑level waste‑to‑energy procurement initiatives using a competitive Power Purchase Agreement model.
‘The tender links two critical urban systems; waste management and electricity generation, creating a circular economy, lower‑emissions solution for Cape Town. It opens the municipal grid to new technologies beyond traditional renewables such as solar PV and wind. We are in exciting times in Cape Town as our energy programme is starting to deliver tangible results, setting us up for the shared energy future we are creating,’ said the City’s Mayoral Committee Member for Energy, Alderman Xanthea Limberg.
Further tender specifications
- IPPs may use existing or new-build power plants, but must make use of proven, utility-scale waste-to-energy technology, optionally paired with a Battery Energy Storage System (BESS).
- IPPs must source their own feedstock; the City does not facilitate waste contracts or fuel supply agreements. The City’s Energy Directorate will not facilitate this process in any manner.
- IPPs are responsible for all by‑products, effluent and waste disposal, in full compliance with legislation and City by‑laws.
- Plants may be located anywhere in South Africa but must cover all connection and wheeling costs (where applicable) and adhere to all grid connection standards.
How to submit bids
The City procures goods, services, and construction works through contracts with organisations and individuals. When the value of these goods or services exceeds R200 000 (including VAT), the procurement is classified as a tender, which must follow a competitive bidding process.
Tenders are typically advertised on official online platforms and in local newspapers to ensure transparency and fair competition.
To bid for a City of Cape Town tender, prospective suppliers must:
- Download and refer to the City’s Tender Guide
- Register on the Central Supplier Database (CSD)
- Register on the City of Cape Town’s Supplier Database
- Access and review available opportunities on the Tender Portal
- Download the relevant tender documents
- Submit their bids before the specified deadline
- Ensure that all required compliance documents are included
Failure to meet any of the requirements or deadlines may result in disqualification from the bidding process.
Other tender out – Energy Trader 500 MW
The City is set to become the first municipality in South Africa to procure electricity at scale from licenced energy traders and aggregators. A new Energy Trader Tender aims to procure 500 MW through Power Purchase Agreements (PPAs) spanning one to 10 years from a variety of power generation technologies, including solar. Tenderers have until 13 May 2026 to respond to this innovative tender aimed at enhancing the resilience of Cape Town, by diversifying its energy mix and moving away from reliance on Eskom’s rising electricity costs. This is also a project under Mayor Geordin Hill-Lewis’s Mayoral Priority Programme on Energy.
