Eskom courts Amazon, Microsoft, and Google as 6 GW surplus strains its balance sheet

South Africa's state-owned utility Eskom is in active discussions with Amazon, Microsoft, and Google about supplying surplus power to their data centres, Eskom chair Mteto Nyati told the Financial Times in a report published 12 August 2026. ^[1] The utility is sitting on approximately 6 GW of surplus generation capacity - the largest reserve margin it has carried in nearly a decade - and needs large, continuous offtakers to convert that idle capacity into revenue.^[1]

From blackouts to oversupply

The reversal is striking. Eskom suspended load shedding on 26 March 2024 after years of rolling blackouts that at their worst saw South Africans lose power for up to ten hours a day. The Generation Recovery Plan has since returned 5.9 GW of generating capacity to the grid since April 2025, and the year-to-date Energy Availability Factor reached 67.24% for the period 1 April to 6 August 2026, up from 60.05% over the same period a year earlier.

The surplus has a second driver: demand has fallen sharply as businesses and households installed their own solar. Eskom's residual energy demand in the first four weeks of 2026 was 11.3% lower than the same period in 2025 - a steeper drop than in any comparable prior-year window. Behind-the-meter rooftop solar reached an estimated 7,500 MW during 2025, with more than 16,000 MW of private generation registered since 2018.

The result, in Nyati's own words: "We've got this power that we cannot sell, that's the reality of the situation."

Why hyperscalers are the target

Data centres are among the few load categories that can absorb gigawatt-scale baseload power continuously, around the clock. Nyati was direct about the appeal: "We are having discussions with the Amazons, the Microsofts, the Googles. We love those discussions because those are power-hungry sectors - that's exactly what we need right now."^[1]

South Africa already has a functioning hyperscaler footprint. Microsoft, AWS, Google, IBM, and Oracle have all deployed cloud regions in the country, and Microsoft announced a $300 million cloud and AI infrastructure commitment through end-2027. South African President Cyril Ramaphosa has projected digital infrastructure investment of R50 billion (approximately $3.09 billion) over the next three years.

The South Africa data centre colocation market is growing quickly, with one market estimate putting 2026 revenue at $627.5 million - up 26.5% year on year - and projecting the market will reach $1.33 billion by 2030.

The carbon problem Eskom cannot paper over

The structural obstacle is the generation mix. Eskom's fleet is predominantly coal-fired, and the grid's emission intensity sits well above what hyperscalers' corporate sustainability commitments can accommodate without offsetting measures. All three companies named by Nyati have made public commitments to match their electricity consumption with carbon-free energy on an hourly or annual basis.

Local operators are already working around this. Teraco, South Africa's largest colocation provider, is building a 120 MW solar PV plant and has signed a wind power purchase agreement to green its own supply. That approach - procuring renewable energy separately and using Eskom's grid only for backup or balancing - is likely to be the template any hyperscaler would demand before signing a large-load agreement.

Eskom has launched a Renewable Energy Offtake Programme and has set a target of 2 GW of construction-ready renewable projects by 2026, scaling to 32 GW including green hydrogen by 2040. But the pace of coal retirement and renewable build-out will determine whether the utility can offer a credible decarbonisation pathway alongside the raw megawatts.

What to watch

The key question is whether Eskom can structure an offtake arrangement that satisfies hyperscaler procurement teams - which typically require either direct renewable energy supply or credible, time-matched certificates. A deal that simply routes coal-fired baseload to a data centre campus is unlikely to clear internal sustainability reviews at any of the three companies named. Watch for whether Eskom's renewable programme accelerates in parallel with these commercial discussions, and whether any of the hyperscalers move from conversation to a signed heads of terms before the end of 2026.