How to Finance Renewable Power for a Ferrochrome Smelter in South Africa

Published 2026-10-13.

South Africa mines more chrome ore than any other country and once smelted much of it at home, in furnaces across North West and Mpumalanga. Those furnaces run on electricity in huge quantities, and since the late 2000s that electricity has become the industry's central problem.

In December 2025, chrome miners and smelters told the government that electricity tariffs had risen more than 900 percent since 2008 and that no trade measure would restore viability without lower power costs, as Business Report reported. In May 2026, the energy regulator NERSA approved a reduced rate of 62 cents per kilowatt-hour for ferrochrome smelters. The relief did not cover manganese and ferrosilicon smelters, and in July 2026 Transalloys, the country's last manganese alloy smelter, stopped production.

The question this article answers is how smelters can use green finance to cut both the power bill and the carbon in each tonne.

Why carbon is now part of the power question

Ferro-alloys are covered by the EU's Carbon Border Adjustment Mechanism as part of iron and steel. An EU importer of South African ferrochrome buys certificates for its embedded emissions. For iron and steel, only direct emissions are counted for now, but the future treatment of electricity emissions is the risk that matters most on a coal-heavy grid. Industry has said that Glencore and Samancor are exploring renewable energy to reduce reliance on Eskom, which would also limit CBAM exposure.

South Africa's carbon tax adds a domestic cost. CBAM lets an importer deduct a carbon price effectively paid in the country of origin when it is documented, so smelters that pay the tax have a reason to record it carefully for each product.

What green finance can pay for

Renewable power purchase agreements and wheeling, contracting wind or solar from independent producers and moving it over the grid.
On-site solar for auxiliary loads.
Furnace efficiency, such as preheating and pre-reduction of ore, and off-gas energy recovery.

Commercial banks and development lenders finance renewable PPAs and industrial efficiency in South Africa. The Industrial Development Corporation has run green energy efficiency lending with KfW; ask the IDC what is currently open.

What a lender or an EU buyer will ask for

Electricity use per tonne of alloy, by month, from Eskom bills and production records.
Direct emissions per tonne: reductant (coke, char, coal) and electrode consumption.
Carbon tax paid, with the returns that show it.
The project's expected effect on power cost and emissions, with metering.

For how CBAM is charged on South African metals more broadly, see green finance for Johannesburg steel and metals firms, and estimate a shipment with the CBAM calculator.

Confirm current eligibility and terms with the lender before you apply.