Local coal mining group Exxaro [JSE: EXX] will buy out India's Tata Power in their joint venture, the wind farm group Cennergi.
Tata Power is selling its 50% stake in the venture for R1.55bn.
The two groups established Cennergi in 2012, with each owning 50%.
Cennergi owns two wind farms in the Eastern Cape: the Amakhala Emoyeni Wind Farm near Cookhouse (134 Megawatts) and the Tsitsikamma Community Wind Farm (95 Megawatts). Outstanding debt in the company amounts to around R4.9bn, repayable over the next thirteen years.
In a statement, Exxaro said the deal is part of its ambition to grow its presence in the energy sector.
"Exxaro is pleased with this opportunity to consolidate its interest in this renewable energy asset at a time in South Africa where we need energy security as we respond to increasing negative sentiment towards coal-based electricity generation," said Mxolisi Mgojo, CEO of Exxaro Resources.
Exxaro is the largest supplier of coal to Eskom and one of the country's biggest exporters of thermal coal.