Teraco announces completion of acquisition by Digital Realty  

Creates the leading colocation and interconnection provider in Africa

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Africa’s most transformative businesses of 2022 named at the top empowerment summit

Topco Media, in partnership with Nedbank, hosted the Top Empowerment Summit, which took place virtually from 20-21 July 202. The summit, aims to find solutions that will re-shape the socio-economic status quo through actionable ways to empower South Africa’s workforce and in so doing, improve the economy.

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Minister Barbara Creecy announces improved environmental assessment processes for solar energy

Forest, Fisheries and the Environment Minister, Barbara Creecy, has announced initiatives for further streamlining the environmental assessment process for renewable energy projects in South Africa. The announcement was made during a virtual stakeholder engagement. 

These measures will improve the efficiency of the environmental assessment processes to facilitate the development of Solar PV and associated infrastructure in areas of low to medium environmental sensitivity.

The initiatives to be implemented will exempt developers from obtaining environmental authorisation for certain listed or specified activities for the development of solar facilities. These initiatives are in addition to the interventions introduced since 2014 to streamline EAs related to renewable energy projects (i.e. gazetting of 11 Renewable Development Zones (REDZ), five 5 electricity transmission corridors and gas corridors as well as the implementation of a Generic Environmental Management Programmes for grid and substation development and expansion). In addition, gazetted Strategic Infrastructure Projects (SIPs) are processed in terms of the legislated 57 days as per the Infrastructure Development Act.

The Standard for the Development and Expansion of Powerlines and Substations in identified geographical areas will be Gazetted for implementation by the end of July 2022. Based on compliance with this Standard the development and expansion of powerlines and substations will be excluded from the need to obtain an EA prior to commencement when developed in areas of “low” and “medium” environmental sensitivity as identified by the national environmental screening tool, and within the five strategic electricity corridors. It should be noted that the exclusions will be subject to a registration process which will allow for compliance monitoring.

In August 2022, the Minister will gazette two notices calling for public comment that are aimed at simplifying the deployment of Solar PV facilities. 

The registration process will reduce timeframes from 300 days and 147 days respectively to approximately 60 days from inception of the project.

The exclusion of Solar PV facilities from an EA based on compliance with an adopted environmental instrument will be subject to:

  • The appointment of an independent environmental assessment practitioner and of specialists (agricultural, terrestrial and aquatic biodiversity; cultural heritage and paleontology);
  • Confirmation of the environmental sensitivity rating through inspection by the various specialists and the preparation of a site sensitivity verification report by the environmental assessment practitioner which confirms the sensitivity rating and compliance with the allowable development limits; and
  • The preparation of an environmental management programme by the specialists and the environmental assessment practitioner
     

It will also include the signing of a declaration that the site sensitivity verification report is a true representation of the findings and the site is of medium or low environmental sensitivity for all themes; that there is an environmental management programme in place and that the developer will implement the mitigation measures identified in the environmental management programme. 

Additional planned interventions to simplify the environmental authorisation process for renewable energy application will ensure that environmental sensitivities on a potential site are identified alongside the introduction of a rating of site sensitivities in line with the screening tool requirements. These areas will be mapped and located on the environmental screening tool and a generic environmental management programme (EMPr) will be developed for each site.

To access a recording of the stakeholder engagement session, click on:

DFFE STAKEHOLDER ENGAGEMENT SESSION ON ENVIRONMENTAL ASSESSMENT RELATED TO SOLAR-20220721_111634-Meeting Recording.mp4

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The impact of the G7’s multi-billion dollar plan on Africa’s infrastructure gap

Heightened focus on sustainability and social impact

By Michael Foundethakis, Baker McKenzie’s Global Head of Projects and Trade & Export Finance, and Africa Steering Committee Chair

In late June 2022, it was announced at the G7 Summit in Germany that a USD600-billion lending initiative, the Partnership for Global Infrastructure Initiative (PGII), would be launched to fund infrastructure projects in the developing world, with a particular focus on Africa. The G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – explained the PGII would help address the infrastructure gap in developing countries.

The US

The US has recently renewed its focus on impact-building and financing strategic, long-term infrastructure projects in Africa, with the Export-Import Bank of the United States (EXIM) supporting infrastructure development on the continent. According to a 2020 report by McKinsey and Company – Solving Africa’s infrastructure paradox – the US accounts for 38% of global investors who have an appetite for African investment, by far the most of any country. In 2021, the US launched a refreshed “Prosper Africa initiative”, focusing on improving reciprocal trade and investments that create jobs and build infrastructure between the two regions. In 2022, the US announced it would mobilise USD200-billion over the next five years as part of the PGII, in the form of grants, financing and private sector investments. Some deals have already been announced, including, for example, a USD2-billion solar energy project in Angola, and the building of multiple hospitals in Côte d’Ivoire.   

The EU

In February 2022, the European Commission announced investment funding for Africa worth EUR150-billion. The funding package is part of the EU Global Gateway Investment Scheme and is said to be in the form of EU combined member funds, member state investments and capital from investment banks.

In early 2020, the European Commission published its Comprehensive Strategy with Africa, outlining the region’s plans for its new, stronger relationship with the continent. The strategy document laid out five top priorities for the EU in Africa: the green transition and improving access to energy; digital transformation; sustainable growth and jobs; peace and governance; and migration and mobility.

The UK

The UK is also making a strong play for influence, investment and trade with Africa, post-Brexit. Further to key summits in 2020 and 2021, finance is being redirected into Africa from the UK. In 2022, UK development finance institution (DFI), British International Investment (formerly CDC Group), announced it had exceeded its pledge to invest GBP2-billion in Africa over the last two years. The UK’s Global Infrastructure Programme helps partner countries (including in the African continent) to build capacity to develop major infrastructure projects, setting up infrastructure projects for success and paving the way for UK companies to support these projects.

Further, in November 2021, it was announced that the governments of South Africa, France, Germany, the United Kingdom and the United States of America, along with the European Union, were in negotiations to form a long-term Just Energy Transition Partnership. The partnership focuses on boosting the decarbonisation of the South African economy, with a commitment of USD8.5-billion for first round financing. It is expected that 1-1.5 gigatonnes of emissions will be prevented over the next 20 years, assisting South Africa to accelerate its just transition. Discussions are also currently taking place to establish a similar partnership in Senegal.

African solutions

The African Development Bank noted in early 2022 that Africa’s infrastructure investment gap is estimated at more than USD100-billion per year. DFIs are increasingly anchoring the infrastructure ecosystem in Africa – serving a critical function for project finance as investment facilitator and a check on capital. DFIs can shoulder political risk and access government protections in a way that others cannot, enter markets others cannot and are uniquely capable of facilitating long-term lending. The large amount of capital needed to fill the infrastructure gap, however, means that DFIs cannot bridge it alone. Private equity, local and regional banks, debt finance and specialist infrastructure funds are primed to enter the market, and multi-finance and blended solutions are expected to grow in popularity as a way to de-risk deals.

The African Unions 55 member states have stated that their primary funding needs include support in terms of safety and security on the continent, as well help in implementing the African Continental Free Trade Agreement (AfCFTA) and the massive infrastructure investment it needs to be successful. The development of supporting infrastructure is key to boosting AfCFTAs free trade potential, especially in terms of transportation, energy provision, internet access and data services, education and healthcare infrastructure projects.

Infrastructure projects in Africa now also have a heightened focus on improving Africa’s capacity for green, low-carbon and sustainable development, via, for example, clean energy, community healthcare and support, green transport, sustainable water, wildlife protection and low-carbon development projects. Funding such projects comes with responsibility –  projects must not only be bankable and yield attractive returns, but must also be sustainable and provide tangible benefits to local economies and communities. All of Africas major partners have noted they will prioritise projects that commit to Environmental, Social and Governance principles, and access to capital for large infrastructure projects is likely to contain sustainability requirements.

That the focus of the PGII is on the sustainability and the social impact of these projects in Africa is further evidenced in the White House briefing room statement issued at the launch in June 2022, where it was stated that the PGII will ’’mobilise hundreds of billions of dollars and deliver quality, sustainable infrastructure that makes a difference in people’s lives around the world.’

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Scatec is starting construction of solar and battery project in SA after reaching financial close

Scatec ASA, a leading renewable energy solutions provider, is starting construction of the three Kenhardt projects in the Northern Cape Province of South Africa under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) after reaching financial close.

Once operational the project will have a total solar capacity of 540MW and battery storage capacity of 225MW/1,140MWh, and provide 150MW of dispatchable power under a 20-year Power Purchase Agreement to the Kenhardt region – in a country that is currently suffering from power shortages. “Achieving commercial and financial close for the Kenhardt projects shows true commitment by our Scatec team and partners. This project is a first of its kind and will be one of the world’s largest solar and battery facilities. We are now looking forward to starting construction of this unique and exciting project, which will be a major contribution to South Africa’s economy and green energy sector,” says Scatec CEO Terje Pilskog.

Scatec, Kenhardt

“This is an important milestone in the procurement of renewable energy and proves that the sector can be relied upon to deliver much-needed electricity capacity to the grid,” adds Jan Fourie, General Manager of Sub-Saharan Africa.

The project will be the largest investment in Scatec’s history with a total capex of approximately ZAR16.4-billion to be financed by equity from the owners and ZAR12.4-billion in non-recourse project debt. The debt will be provided by a group of lenders which includes The Standard Bank Group as arranger and British International Investment. The Kenhardt projects are funded in local currency.

Scatec will own 51% of the equity in the project, with H1 Holdings, a local Black Economic Empowerment partner owning 49%. Scatec will be the Engineering, Procurement and Construction (EPC) provider and provide Operation & Maintenance as well as Asset Management services to the power plants. The value of Scatec’s Development and EPC contract for the project is approximately ZAR13.7-billion.

“We are excited to be partnered alongside Standard Bank to back this largest-of-its-kind battery storage system by Scatec which aims to deliver predictable clean energy to South Africa’s grid at a significant scale and at a critical time. This investment builds on our existing partnership with Scatec across multiple clean energy initiatives and financial solutions across the African continent. BII is proud to back a project at the forefront of renewable energy technology that has the potential to be scaled commercially, ” says Iain Macaulay Director and Head of Project Finance, British International Investment, Africa and Pakistan. British International Investment is the new name for the UK’s development finance institution and was formerly known as CDC Group.

“This a project that strongly aligns with our ambition to scale climate-infrastructure investment in South Africa to address critical challenges, boost productivity, support sustainable climate solution and accelerate inclusive growth throughout the economy.”

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Averda Ink Landmark Deal to Support Waste Management in South Africa  

International Finance Corporation (IFC) is providing a $30 million loan to Averda, one of the largest privately-owned integrated waste management companies in Africa and the Middle East. 

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Southern Africa marked as major green exporter on roadmap for Hydrogen

In March this year, the South African Department of Science and Innovation (DSI) published a Hydrogen Society Roadmap for South Africa (HSRM) outlining a national hydrogen strategy to realise domestic energy security needs, while also positioning the country to export green hydrogen and ammonia to Europe and Asia.

According to Jackwell Feris, Director at commercial law firm Cliffe Dekker Hofmeyr (CDH), the development of the hydrogen economy in Africa will support effective broad global decarbonisation, allowing countries to meet their climate goals and create sustainable economic growth for African countries and the rest of the world. “There are enormous opportunities for Africa to be a key player in the clean hydrogen value chain,” says Feris. “In fact, several regions have the potential to develop into major global export hubs for hydrogen and other areas with the potential to provide domestic demand for end-use applications of hydrogen.”

From a Southern African perspective, he says this region has favourable solar conditions for the production of green hydrogen, with countries like Namibia and South Africa being ideally situated to become export hubs for green hydrogen.

“This is why it is critical that South Africa and Namibia push to become one of the first movers in this market,” says Feris. “There are already a number of international jurisdictions like South America and Australia who are already in a good position to do the same.”

Feris says South Africa needs to expedite the process in order to secure the demand, which begins with securing policy and regulatory frameworks that are attractive to investors but also balance the current and future needs of the country.

Feris points to Spain as a perfect example of why policies and regulations are so important. In 2006, the Spanish government implemented a programme called “The sun can be yours” in which it encouraged small-time investors to buy into solar farms throughout Spain. While this was successful for some time, the policy was not robust enough and the Spanish government ended up reducing its subsidies, which become a red flag for investors who in turn made claims against the government.

“We cannot develop this new market into new economic territory without due consideration for the economic needs and restrictions of our national goals and priorities. The system needs to be sustainable from the word go.”

Hydrogen is going to affect the entire global economy. From the different forms of hydrogen, they all need to shift to a greener form of energy – which is hydrogen.

The competitive advantage of Namibia is that there is more land and fewer people, so the natural move would be to become an export market.

Looking at what the global commitments are in terms of the 2021 United Nations climate change conference, COP26, is that there will be a bigger push for hydrogen, and  Africa most definitely has a role to play in this. If Africa collaborates to create this industry across jurisdictions for African growth, we can attract investment while decarbonising the global economy.

Is it realistic for South Africa to do this? Director at CDH Margo-Ann Werner says in terms of exporting hydrogen, this would have to be a collective effort by the government and private sector, and Sasol has already taken the lead on hydrogen creation. If we want investors to invigorate growth in this market, it all hinges on creating an enabling policy framework. In a South African context, we do have a few gears that will enable a hydrogen economy.

The country is already the world’s largest producer of Platinum Group Metals (PGM), which are one of the main ingredients in the production of green hydrogen, and is also well endowed with available land and renewable resources to provide the energy sources for green hydrogen production.

Existing local infrastructure will allow for the production of blue, grey, black, and brown hydrogen, with the possibility of pink hydrogen arising. This puts South Africa in a unique position to gain a competitive advantage in harnessing hydrogen to create a whole new electricity market, which South Africa desperately needs.

“We are seeing drives in government that are specifically focussed to push the infrastructure drive and securing the resources needed to facilitate security of supply, and conservation of water”, concludes Werner.  “It’s not going to be an easy road. It is going to be complex and dynamic with a lot of moving parts across private and public sectors. We still need more clarity, more security, and more commitment, but it will be worth it”.

READ MORE ON PAGE 44 OF GREEN ECONOMY JOURNAL 52
READ MORE IN GREEN ECONOMY JOURNAL 49 ON PAGE 28
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The 9th edition of Africa’s largest Manufacturing Conference & Exhibition has been acknowledged as a massive success by all who participated.

Once again this illustrious annual event has brought together manufacturers, government officials, capital providers, business owners, industry leaders and professional experts.

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UN DSG: Keep goal of 1.5°C alive by closing climate finance, mitigation gaps with urgent, robust action

Following are UN Deputy Secretary-General Amina Mohammed’s closing remarks, as prepared for delivery, to the Commonwealth Heads of Government Meeting’s Climate Change Side Event “Keeping 1.5 Alive — the Glasgow Climate Pact and Building Momentum towards the twenty-seventh Meeting of the Conference of the Parties to the United Nations Framework Convention on Climate Change”, in Kigali today:

We are at the mid-point between the twenty-sixth Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26) and COP27. The Glasgow Climate Pact, the main outcome of COP26, laid bare huge gaps on mitigation, on finance and on adaptation as well as the actions that needed to be taken over the course of the coming years to close these gaps through just transitions. Let us be frank, almost sixth months after Glasgow, we are off track. Today we have heard that there is political will behind the Glasgow Climate Pact, and renewed commitment to deliver the Paris Agreement.  But, this intent is not translating into action.

Last year, global emissions were at their highest level ever. The nationally determined contributions submitted last year would result in an increase in global emissions of 14% by 2030.

Science tells us that, for us to be on a credible pathway to limit global average temperature rise to 1.5°C, global emissions need to decline by 45% below 2010 levels by 2030.

The battle to keep the 1.5°C goal of the Paris Agreement alive and prevent the worst impacts of the climate crisis will be won or lost this decade. With each passing day of inaction, the pulse of the 1.5°C goal gets weaker and weaker.

At Glasgow, all countries agreed to revise and strengthen their nationally determined contributions.  Group of 20 (G20) nations account for 80% of global emissions. Their leadership is needed more than ever to bend the global emissions curve towards 1.5°C. Thanks to the COP26 President Alok Sharma for the continued leadership.

On finance, the $100 billion commitment made over a decade ago remains unmet, and the trillions needed to ensure a low-carbon, climate-resilient future are yet to be mobilised.

Developing countries continue to face extraordinary barriers to accessing the finance they need, particularly to protect themselves from the worst impacts of climate change which are happening now.

This story plays out against a devastating backdrop. According to the Intergovernmental Panel on Climate Change, at 1.5°C of warming, people living in Central and South America, most of Africa, small island developing States and South Asia, are 15 times more likely to die from a climate impact. The recent climate discussions in Bonn did not reflect the reality of this emergency.

We have six months to Sharm el-Sheikh. The window to demonstrate that the countries are taking serious steps, as agreed in Glasgow, has not yet closed. We still have hope that it can be done.

This means countries bringing forwards new and enhanced nationally determined contributions, underpinned by concrete policies.  Especially from those that have not yet done so, and those major emitters that are not yet on a 1.5°C pathway. We need to go a step further. And this is why the Secretary-General has called for coalitions of support around key emerging economies to accelerate the transition away from coal.

It means donors providing clarity on when and how the $100 billion promise will be met, as well as providing the road map for the doubling of adaptation finance. It is a handshake that is not only fair but that will also help address the trust deficit. It also means multilateral developing banks playing their part in mobilising the trillions of needed private finance. We need to see concrete progress towards reforming rules around eligibility and burdensome access criteria that many developing countries face.

Local solutions need to be supported. Loss and damage needs to be seriously addressed. Youth need to be taken seriously and meaningfully engaged.  We must keep focused on protecting the most vulnerable.

This is why the Secretary-General has called for 100% coverage of early warning systems over the next five years.

One out of every three persons in world is not covered by an early warning system. These persons are predominately in least developed countries and small island developing States. This is unacceptable when we know we have the technology and the tools to achieve this.

Multilateralism is under strain, yet the Commonwealth has the potential to lead the way and provide a model for cooperation. You are a diverse group of countries, spanning many regions of the world, languages, religions and cultures. You include major economies, both developed and developing. You include those already suffering from the impacts of climate in action. And you unite around common values.

So, today, I end with this appeal to you, Commonwealth leaders. Let us not step back from our commitments and revert to the lowest common denominator.  We must close the gaps on mitigation, adaptation, finance and on loss and damage with urgency and ambition.

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Bringing Africa’s voice to the heart of Europe… The 24th annual Africa Energy Forum returns live and in full capacity from 21-24 June at Tour & Taxis in Brussels

As the world debates the role of Africa in the new-energy-future, what do stakeholders on the on the continent need to create and enabling environment to support the billions of dollars flowing into their economies?

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