The 6 Legal Workstreams Every South African Energy Project Needs (and How to Budget for Them)

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Alex Mccall
caveat legal panel attorney john t
John Taylor
Lisa Brunton
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Nick Bent
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Sarah Lawrence
Simone Izzard
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Susan Braybrooke

Most energy projects in South Africa don’t go over their legal budget because the lawyers were expensive. They go over because nobody mapped the full scope at the start, so new specialists get pulled in halfway through, each with their own open-ended bill.

A single solar, wind, storage or wheeling project touches at least six areas of law. Here’s what each one covers, when it’s needed, and how to plan for it so legal costs stop being a surprise.

1) Corporate and structuring: who owns the project, and on what terms?

Before any power is sold, the project needs a home. That usually means a special purpose vehicle (SPV) and a clear agreement between the people who own it.

This workstream covers:

  • setting up the SPV and its Memorandum of Incorporation
  • a shareholders’ agreement that deals with funding calls, decision-making and exits
  • ownership structures that meet B-BBEE and procurement requirements, where relevant
  • how developers, equity partners and community trusts share returns and risk

If this is unclear, every later contract is signed by an entity whose ownership may still change.

2) Land and environmental: can you build and operate here for the full term?

Land and environmental approvals often run the longest, so they need to start early.

This workstream covers:

  • long-term leases, servitudes and access rights
  • consents from landowners, bondholders and, for agricultural land, the relevant authorities
  • environmental authorisations and the conditions attached to them
  • rezoning and municipal approvals

Lenders will check that land rights last at least as long as the revenue contract. A gap here can stop financing on its own.

3) Regulatory and grid: are you allowed to generate, connect and sell?

Energy regulation in South Africa is still changing, which makes this workstream easy to underestimate.

It covers:

  • generation licensing or registration with NERSA, depending on the project
  • grid connection and use-of-system agreements with Eskom or the municipality
  • wheeling arrangements, where power is sold to a buyer on another site
  • trading rules and metering requirements

Regulatory advice is rarely a once-off. Plan for it to run alongside the project, not just at the start.

4) Commercial: how does the project get paid?

This is where most people think “energy law” starts, but it depends on everything above.

This workstream covers:

  • the power purchase agreement (PPA) or energy supply agreement
  • tariff, indexation and billing mechanics
  • curtailment, outages and deemed energy
  • payment security from the buyer
  • termination rights and compensation

A well-drafted PPA reflects the land, grid and regulatory positions already agreed. A PPA drafted first usually needs to be reopened.

5) Construction and operations: who builds it, and who keeps it running?

A project can be fully financed and still fail if construction and maintenance contracts don’t line up with the PPA.

This workstream covers:

  • the engineering, procurement and construction (EPC) contract
  • equipment supply and warranty agreements with OEMs
  • operations and maintenance (O&M) contracts
  • performance guarantees, delay damages and defects liability

The test is simple: if the plant underperforms, can the project company recover from the contractor what it loses under the PPA?

6) Finance: can lenders lend against it?

If debt is involved, lenders will want their own legal comfort, and they’ll test every workstream above.

This workstream covers:

  • loan and facility agreements
  • security over shares, contracts, bank accounts and assets
  • direct agreements that give lenders step-in rights under key contracts
  • conditions precedent to financial close

Finance counsel arriving at the end and finding gaps is the single most common cause of late-stage delay.

A practical way to start (that keeps the budget under control)

Before any drafting begins, we recommend a one-page legal scope for the project:

  • which of the six workstreams apply
  • what each one needs to deliver, and by when
  • which workstreams depend on others
  • who coordinates across all of them
  • a fee estimate per workstream and per phase (development, financial close, construction)

When everyone can see the full scope upfront, specialists can be brought in at the right time, issues are spotted while they’re still cheap to fix, and the legal budget can be agreed rather than discovered.

Bottom line: energy projects need a team of legal specialists, not a single generalist. Map the workstreams first, coordinate them as one project, and agree fees per phase. That’s how legal support speeds a project up instead of slowing it down.

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