The lure of greentech


At a time when all South Africans need to ensure that the rise of unemployment is kerbed in a bid to boost the economy, there is growing consensus on the need to harness the green economy as one of the pathways towards job creation.

South Africa’s transition to a green economy is guided by the groundbreaking Green Economy Accord, which estimates that this country has the potential to create 300 000 green jobs in the economy by 2020.Last year, a Moody’s Investors Service report by Christopher Bredholt, a Moody’s Vice-President and Senior Analyst, said: “the South African renewable energy market has grown rapidly over the past five years or so, and there is rising demand for renewables debt”While there is a mission to convert a general public awareness and understanding about renewable energy into tangible action, contributions to the Green Economy require active and sustained investment in protecting the natural environment… and achieving this is no mean feat. It takes continued investment in ecosystem-based adaptation and conservation practices to set a country on the vital path to meeting employment and sustainable development goals.

In South Africa, one of the pillars of the process has been the designation of the Atlantis industrial area as a Green Technology Special Economic Zone. Situated on the West Coast of South Africa, 40km from Cape Town, the Atlantis SEZ capitalises on the province’s already booming renewable energy and green technology sector. It supports the manufacturing sectors to become suppliers and component manufacturers for the renewable energy sector, in particular, independent power producers in the government’s Renewable Energy Independent Power Producers Programme (REIPPP).South Africa aims to generate 17 800MW of electricity from renewable resources by 2030, and a significant share of the new electricity capacity is being developed and produced by independent power producers (IPPs) through the REIPPP.

The Western Cape province has positioned itself as a world-class investment destination, offering businesses and investors prime locations, modern infrastructure, a skilled workforce, low operational costs, natural resource abundance and an excellent quality of life.The proposed SEZ is part of the Western Cape government’s and Cape Town’s quest to unlock economic opportunities in this impoverished part of the province, while at the same time contributing to the financial and environmental sustainability of the metro.Last year, the Western Cape MEC of Economic Opportunities, Alan Winde, said that the energy security had been identified as the province’s most important strategic enabler.“For an economy to thrive and attract investment, it must have stable, affordable power. In the Western Cape, we have prioritised the development of clean energy sources. In this regard, the proposed SEZ in Atlantis stands to deliver a major job creation and investment boost,” said Winde.

The SEZ also forms part of the city’s overarching efforts to ensure that investors increasingly choose Cape Town and the Western Cape as the top investment destination in South Africa. It is also expected that the interest from local and foreign investors in purchasing land in this green technology hub will grow.Michael Mulcahy, CEO of the GreenCape Sector Development Agency, says the establishment of the SEZ is almost complete, “There are a few processes [left] but certainly before the end of the year, we’re very optimistic that Atlantis will be designated as a green technology manufacturing zone.”GreenCape (a government-funded, industry-led initiative) is the appointed Atlantis SEZ project management unit, responsible for coordinating the application for designation. Talking about the attractiveness of the SEZ as an investment, GreenCape says there is a strong and growing South African and African market for greentech and that independent market research shows a strong demand for renewable energy and green technologies from South Africa and the entire African continent.

The renewable energy sector aims to support the growth of the large-scale renewable energy sector, from project developers, equipment suppliers and technical advisors to financiers. The aim (which is in line with GreenCape’s objectives), is to attract investment into South Africa as well as the creation of jobs—primarily in the manufacturing sector.On the subject of switching to renewable energy, Mulcahy says one way of looking at it is as “a straight commercial opportunity”. He says that South Africa makes up a massive percentage of the formal electrical infrastructure for the whole continent—around 80-85%. However, at present, lots of places around Africa run diesel engines to provide themselves with power and in such cases, GreenCape is looking at hotels, shopping centres and building complexes to convert them from diesel power (which is an incredibly expensive power generation source) to renewable plus batteries which, he says, “are way cheaper than diesel, so the commercial prospect of diesel replacement is phenomenal. 

Mulcahy says that there is a massive focus on rural electrification across the continent, with international programmes in place such as Power Africa and Sustainable Energy for All. However, he cautions that the focus with these programmes appears to be what he calls the “base of the pyramid sort of interventions,” adding that there’s “a whole other sub-set of opportunities for effectively internationally subsidised programmes that are broader”Mulcahy adds that “in Atlantis, there’s something called SAREBI, the South African Renewable Energy Business Incubator, and they’ve got four or five existing manufacturers that are small businesses in Atlantis. They’re currently incubating and so they’ve got guys doing energy-efficient lights as well as low-pressure solar water heaters that are manufactured in Atlantis.”Through close working relationships with businesses, investors, the government, and academia, GreenCape’s sector desks are in a unique position to collect, create, and disseminate free market intelligence on the green economy.

One of GreenCape’s collaborators is the ROSE Foundation. Rose (Recycling Oil Saves the Environment), is a national non-profit organisation established to promote and encourage the environmentally responsible management of used oils and related waste in South Africa.Funded by the major stakeholders in the lubricants industry to enable them to meet their environmental and extended producer responsibilities, ROSE proves that sustainable recycling protects the environment and creates widespread employment opportunities.Another partner is The National Cleaner production Centre of South Africa (NCPC-SA), who assist industry in their efforts to achieve energy and cost savings through initiatives such as the South African Industrial Energy Efficiency (IEE) Project, which has saved industry R1.7-billion in energy costs over five years.

Achieving a green economy requires different sets of actions by the government and private sector actors. For the government, this includes (among other things) reforming institutions and policies to provide new incentives for green enterprises, green jobs, green products and services and green or sustainable investments; levelling the playing field for ‘green’ products, investments, sectors and industries by phasing out antiquated subsidies to ‘business as usual’ business models and codes of practice; strengthening infrastructure and market-based mechanisms; greening public procurement and redirecting public investment towards green economy and sustainable development goals.Already this year, South African companies are set to share loans approved by the New Development Bank (aka the Brics bank) totalling $900 million (R12.9-billion) for green projects. According to the bank’s president, KV Kamath, the Development Bank will lend up to $2.5-billion in 2017. Kamath said the bank had already approved loans totalling $900 million to green projects in each member state.


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Issue 39