Eskom is investing $160 million to biring the facilities pressurized water reactors (PWR) up to new safety standards. The two French-built Koeberg PWR require the investments to bring them in line with the updated safety reference for Electricite de France's (EDF) 900-MW-class PWR. Eskom has decided to follow EDF's practice of bringing all the units in its PWR series up to the safety level of the series youngest unit, and if possible, to the level of more recent series. Eskom also plans to spend $2 million over the next five years to rehabilitate buildings and other structures ravaged by the saltwater atmosphere. Koeberg, which lies 16 miles (27 kilometers - km) north of Cape Town, is subjected to winds up to 120 miles/hour (200 km/hour) that blow brine mist over the facility, peeling paint and exposing rebar to the elements. The conditions are some of the most severe for seaside nuclear plants.

Eskom also is in the process of developing and testing a smaller nuclear reactor. The pebble-bed modular reactor (PBMR) is a relatively small (125 MW) nuclear power station. The PBMR combines helium coolant, a graphite moderator, and ceramic fuel pellets, which allow the reactor to operate at higher temperatures, increasing the amount of energy it can convert to electricity. The PBMR also creates less spent fuel than PWR, which are the designs of the current Koeberg facility.

The initial phase of the project, which was given the go-ahead by the South African government (SAG) in April 2000, involves undertaking a feasibility study, an environmental impact assessment (EIA) and a public participation process. Continuation of the PBMR project is subject to a series of milestone reviews by the SAG, the successful completion of the environmental impact assessment process, as well as the issuing of a construction license by the National Nuclear Regulator.

In November 2000, U.S.-based Exelon Energy (12.5% interest) announced its investment in the PBMR consortium. Other partners are Eskom (40%), the Industrial Development Corporation (25%) and British Nuclear Fuel (22.5%). A 10% stake, which will reduce Eskom's share to 30%, is reserved for an empowerment company. In 2002, Exelon announced it was withdrawing from the consortium, to concentrate on core businesses. The consortium is actively seeking a new partner.

If constructed, the prototype will likely be situated adjacent to the current facility at Koeberg. Several environmental groups have expressed concern over the possible construction of additional nuclear facilities in South Africa. Critics are also questioning both the price and practicality of the PBMR project. South Africa currently has excess generating capacity, and the spending of government funds on unproven technology.

In June 2003, the Department of Environmental Affairs and Tourism (DEAT) ruled in favor of the PBMR project and its location at Koeberg. DEAT had originally proposed that the PBMR be located in the North West Province, adjacent to the fuel facility in Pelindaba. DEAT Minister Mohammed Moosa is expected to make the final decision before the end of 2003. In September 2003, Earthlife Africa, an environmental group, filed papers to challenge that June's EIA approval decision in court. The Cape Town city government has also voiced its oppositeion, as have other civic and environmental groups.

If the reactor trial is successful, Eskom has announced that it will build up to ten PBMR plants locally, to provide power to coastal regions which are distant from its core coal-fired generating facilities. Eskom ultimately plans to export the technology and hopes to build 10 to 20 PBMR plants around the world each year, creating an industry that would employ nearly 60,000 people and bring important investment to South Africa.