The move could potentially lead to the first fabrication facility for light water reactor (LWR) fuel in Africa.
South Africa has two operating reactors at Eskom's Koeberg Nuclear Power Station, along with ambitious plans to build up to 9.6GW of new nuclear capacity by 2030.
The MOU Westinghouse, said, demonstrates its commitment to play and active role in electricity generation in South Africa.
"The MOU will lead to closer cooperation towards fuel component manufacturing as well as nuclear fuel technology support in the future," it said in a statement.
Westinghouse has been delivering fuel to Koeberg 1 since 2000. Its present contract with Eskom covers three nuclear fuel reloads, with the last one to be delivered in mid-2014. Westinghouse Fuel Engineering is also working with Eskom toward extending and updating the contract for software services, including technology licensing and associated computer hardware.
Today, there are three principal LWR nuclear fuel suppliers (AREVA, Global Nuclear Fuel and Westinghouse), each with facilities in Europe, Asia and Asia. Russia's TVEL is also in the process of developing fuel for western pressurized water reactors.