In a much-anticipated decision, South Africa's Cabinet approved the country's Renewable Energy Masterplan ("SAREM") on 28 March 2025. SAREM is a strategic framework designed to enhance South Africa's renewable energy sector while fostering industrial growth and job creation. The Cabinet's approval marks an important milestone in the nation's transition towards sustainable industrial growth and development.
The initial draft of SAREM was published in March 2022. It served as the foundation for the final version which was released in December 2023. The plan comprised a vision, objectives and action plan for South Africa to enter the growing renewable energy market and drive a simple goal: to secure the energy future while unlocking economic opportunities for all South Africans.
The comprehensive framework was approved by South Africa's multiparty Government of National Unity ("GNU") after more than two years of deliberation. The framework seeks to facilitate the inclusive industrialisation of South Africa's renewable energy value chain and battery storage, support job creation, promote economic competitiveness, and promote the supply of low-carbon, reliable, and affordable energy.
The approved plan is the product of extensive consultations with various stakeholders, including government departments, industry experts and the public. The GNU also carefully considered the plan's policy and regulatory implications, with a view to align it with South Africa's climate commitments under the Paris Agreement and the recently promulgated Climate Change Act, 2024. As part of the approval process, the GNU also appointed Electricity and Energy Deputy Minister Samantha Graham-Maré as the person responsible for implementation of the masterplan.
While the Cabinet has approved SAREM, it has directed that the masterplan be further supplemented before its implementation. Specifically, Cabinet indicated that additional terms which incentivise investors to fund renewable energy supplier development should be included. Cabinet also requested that the masterplan should provide for the development of green hydrogen fuel to meet international standards of a 5% blended fuel in aviation and maritime sectors by 2030.
The Targets and Strategic Interventions provided for under SAREM include, amongst others:
- a strategic vision to harness South Africa's abundant renewable energy resources, particularly solar and wind, and unlock the full economic potential of the value chain through inclusive, green industrialisation. The plan aims to increase the pace at which renewable energy projects will roll out, targeting at least 3 to 5 GW of renewable energy generation annually across market segments;
- an objective to create more than 25,000 jobs by 2030 through localising the manufacturing of key components such as solar panels, inverters, wind turbine towers, cables and batteries;
- the aim to establish industrial hubs dedicated to renewable energy manufacturing and services. This initiative will enhance the resilience and sustainability of South Africa's energy supply, support job creation, and boost the country's economic competitiveness in the global renewable energy market; and
- South Africa's shift to renewable energy to be inclusive, skills-intensive and aligned with climate commitments. SAREM aims to reduce greenhouse gas emissions and position the country as a competitive clean energy and green industry investment destination. Additionally, the masterplan seeks to foster a more sustainable and equitable future for all South Africans and emphasises the importance of a just energy transition, ensuring that the benefits of renewable energy development are shared across all segments of society.
It is hoped that SAREM will offer South Africa a unique opportunity to become a global leader in the renewable energy and battery storage sectors. By creating jobs and driving economic growth while safeguarding the environment, SAREM could pave the way for a more sustainable future for the country.
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Read the original publication at Herbert Smith Freehills
