South African court confirms servitudes cannot delay projects

The dispute arose when mining house Sibanye Gold Ltd (Sibanye) sought a wayleave to cross Eskom’s servitude over certain properties – where Eskom had existing land rights in respect of properties it does not own – as well as its 132KV transmission line. Sibanye wanted to build a 6km power line for the purpose of developing a 50MW behind‑the‑meter solar photovoltaic (PV) project and then further connect this PV project to the Kloof substation to supply electricity to Sibanye’s Kloof gold mine in Gauteng province.

Eskom refused, citing regulatory, operational and “orderly development” concerns. It proposed a ‘wheeling’ alternative via its Libanon substation. Wheeling is when electricity is produced in one area and connected to a grid but sold to an end user in a further remote area of the grid.

The High Court reviewed the case. In its judgment, handed down on 18 February, the court set aside Eskom’s refusal and substituted it with an order granting the wayleave, including costs.

The court found Eskom acted with “ulterior purpose” and in bad faith, committed material errors of law, misapplied its own wayleave policies and relied on unsubstantiated operational risks.

It added that Eskom tried to use the wayleave to force a wheeling solution and rendered the decision “irrational, unreasonable and unlawful” under the Promotion of Administrative Justice Act 3 of 2000 (PAJA).

The judge said such attempts were contrary to Eskom's wayleaves policy and the South African government’s broader policy objectives to facilitate private sector electricity generation to help diversify the country’s energy mix. Rather, the judge highlighted that there was “nothing” in the state-owned entity’s policy that entitled it “to use wayleaves to block the development of renewable energy projects or to use this as leverage to impose Eskom’s preferred commercial terms”.

Johannesburg-based Nayna Cara of Pinsent Masons said the judgment would have “far-reaching implications” not only for energy developers, but also for landowners and rights‑holders navigating Eskom servitudes: “The court’s finding that Eskom acted with ulterior commercial motives and misapplied its own wayleave policies underscores a critical principle:Eskom’s servitude rights do not entitle it to obstruct lawful land use, development or access where statutory requirements are met.”

Cara added that the judgment would provide “welcome clarity” for stakeholders across the energy sector “that servitudes cannot be wielded to impose unrelated commercial terms, delay strategic projects, or frustrate private‑power initiatives”.

From a commercial perspective, Cara added, the ruling is expected to reduce risk for renewable energy investments that require infrastructure to cross Eskom servitudes – a common feature in mining, industrial and agricultural developments. Organisationally, it empowers property‑owning corporates to assert their rights more confidently, knowing that the wayleave process is administrative and mechanical, not discretionary, she said.

Rob Morson, an Africa infrastructure and energy expert at Pinsent Masons in London, said the court’s decision would also be very relevant to international investors in South Africa’s energy sector: “The ruling ultimately strengthens the bankability of self‑generation projects by ensuring that servitudes operate as intended: to balance access and safety, not to control the commercial viability of developments occurring lawfully on private land. This affirmation of rights instils confidence in the South African legal system and bodes well for private‑sector energy investment, operational resilience and long‑term property‑based infrastructure planning.”