Green Economy Journal Issue 49

Economy
G R E E N
journal
ISSUE 49 | 2021
CLIMATE FINANCE:
Funding renewable energy
across the spectrum
HELLO HYDROGEN: Is hydrogen the next mega industry?
THOUGHT LEADERSHIP: Are cities to blame for Covid-19?
TECH, SUSTAINABILITY, TRADE: A snapshot of Africa in the next five years

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PUBLISHER’S NOTE
Dear Reader,
I feel like the cork holding back investment in the green economy is
about to be blown out!
The RMIPPPP preferred bidders, popular or not, will likely reach
financial close early next year, and the REIPPPP BW5 preferred
bidders will follow not long afterwards, and with some luck the
winners of all three rounds of phase 1 of the Eskom Battery Energy
Storage Flagship Project will be announced.
These projects will result in billions of US dollars being invested
in South Africa and will trigger a multiplier effect throughout the
whole economy.
At the same time, REIPPPP BW6 is scheduled for release along with
DMRE bids for battery energy storage, gas, and coal being slated for
now-ish. The DMRE plan for coal is now facing opposition through
high court litigation brought by the Centre for Environmental Rights
on behalf of: groundWork, Vukani Environmental Justice Movement
in Action and the African Climate Alliance. Power to them!
Gas has arrived. Literally, with DNG (Karpower litigant in the
RMIPPPP legal matter) receiving their first consignment of LNG from
Holland. Clearly, DNG is set to become the next oligopolist in South
Africa and wants no competition from the likes of the Turks.
Meanwhile, the private sector continues to be suffocated by
energy and water constraints, and one pollution crisis after the
next, a state of affairs that is leading companies to seek ever greater
autonomy from state and local government services, and this is set
to become a mega-trend over the next few years. SMES in the green
economy are waiting in the wings to facilitate this shift, may the
finance community please facilitate this in a less risk averse manner
going forward.
Onwards and upwards as we conclude 2021!
Enjoy!
G R E E N
Economy
journal
EDITOR:
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REG NUMBER: 2005/003854/07
VAT NUMBER: 4750243448
PUBLICATION DATE: November 2021
G R E E N
Economy
journal
6
8
12
NEWS & SNIPPETS
SPECIAL REPORT
A snapshot of Africa in the next five years
THOUGHT LEADERSHIP
Are cities to blame for Covid-19?
18 FINANCE
The DBSA: developing development
22 FINANCE
A chance to change history in SA
28 HYDROGEN
Hydrogen in SA gets the green light
08
16
Gordon Brown, Publisher
www.greeneconomy.media
33 WATER
What’s mine is yours. By SAGISA Process
Engineering
EDITOR’S NOTE
As President Rhamaphosa said in his address at the Cop 26 Energy
Session, bold action must start with accelerated decarbonisation
of our energy systems. This involves harnessing new technologies
to reduce our dependence on high-emission fossil fuels, including
unabated coal power. It requires that we move to more sustainable
and cost-effective energy sources.
A feasibility study for South Africa’s first hydrogen valley has just
been completed. The hydrogen valley will serve as an industrial
cluster bringing various hydrogen applications in the country
together to form an integrated ecosystem (page 28). Don’t miss The
race to green hydrogen in Africa on page 30.
While the energy transition is necessary for reducing global
carbon emissions, this transition must also be fair and just. The
financing partnership announced at COP26 between South Africa
and a consortium consisting of France, Germany, the UK, the US
and the EU aims to support our just transition to a low-carbon
economy. On page 22, we discuss climate finance for the transition
away from coal and don’t miss the article on page 18, which looks at
the phenomenal work that the Development Bank of South Africa is
doing in this space.
All this and so much more in Issue 49 of The Green Economy
Journal.
Alexis Knipe, Editor
All Rights Reserved. No part of this publication may be reproduced or transmitted in any way or
in any form without the prior written permission of the Publisher. The opinions expressed herein
are not necessarily those of the Publisher or the Editor. All editorial and advertising contributions
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copyrights and permissions. The Publisher does not endorse any claims made in the publication
by or on behalf of any organisations or products. Please address any concerns in this regard to
the Publisher.
34 WATER
Not all droughts are the same
37 WASTE
The potential of waste in a circular economy.
By Interwaste
39 CIRCULARITY
Making the circular economy a reality.
By NCPC-SA
41 WATER
The worth of water. By SAGISA
42
VALUE CHAINS
Building resilience in manufacturing
and supply chains
42
48
4 5

NEWS & SNIPPETS
NEWS & SNIPPETS
PRESIDENT RAMAPHOSA: COP26 ENERGY SESSION
“There is no longer any doubt that climate
change presents a critical and urgent threat
to humanity. This is so because it will have
devastating consequences for our economies
and societies if we do not take action now.
Bold action must start with accelerated
decarbonisation of our energy systems. This
involves harnessing new technologies to
reduce our dependence on high-emission
fossil fuels, including unabated coal power.
It requires that we move to more sustainable
and cost-effective energy sources.
While the energy transition is necessary
for reducing global carbon emissions, this
transition must also be fair and just. For many
developing economies this requires massive
investment in alternative energy sources and
other infrastructure. It requires substantial
support for workers and communities
throughout the coal value chain who stand to
lose their jobs as well as their livelihoods. A just
transition requires finance and support from
wealthier nations to enable low- and mediumincome
countries to protect employment and
to promote development.
THE WORLD’S LARGEST
FLOATING WIND FARM
The 50MW Kincardine Offshore Wind Farm is
located 15km off the coast of Aberdeenshire,
in water depths ranging from 60m to 80m.
The Kincardine project was started in 2014
by Allan MacAskill and Lord Nicol Stephen,
now both directors of Flotation Energy plc. In
2016, Cobra Group became the main investor
in Kincardine Offshore Wind Farm. Cobra Wind
has been responsible for project delivery,
engineering, construction, installation and
commissioning.
The development uses the highest capacity
wind turbines ever installed on floating
platforms. Kincardine will generate over
200GWh of green electricity a year, powering
over 50 000 Scottish households.
Aaron Smith, chief commercial officer,
Principle Power, says: “Kincardine is further
showing the readiness and commercial
potential of floating technology. With 80% of
the world’s offshore wind resources in deep
water areas, floating technologies like the
WindFloat® open several new geographies to
harness the boundless supply of clean energy
contained therein.”
Courtesy: KOWL
In South Africa, we have committed to
ambitious emission reduction targets. Achieving
these targets will require the transformation of
our energy system at an unprecedented speed
and scale. This will include the decommissioning,
the repowering and the repurposing of coal-
ENERGY COUNCIL LAUNCHED
fired power stations and the roll-out of
renewable energy. But our ability to do so will
be determined by the extent of support that
we receive from developed economies.
The Political Declaration that we announced
this week with the governments of France,
Germany, the UK and the US, as well as the
EU, represents an important breakthrough
in this effort. Through this partnership, an
initial amount of $8.5-billion will be mobilised
over the next three to five years to support
South Africa’s just transition to a low-carbon,
climate resilient future. This will enable us
to implement our ambitious goals and to
develop a model for a just transition that we
hope can be used elsewhere.
We are entering a brave new world bound
together by our common destiny as humanity.
We owe this to ourselves, to one another and
to the future generations.”
The world’s largest floating wind farm.
The Energy Council of South Africa has been launched by founding members from across the
energy value chain, both public and private. The Council will play a leading and collaborative role
in the development and transition of the country’s energy sector.
The initiative is led by CEOs from Anglo American, Central Energy Fund, Eskom, Exxaro, Industrial
Development Corporation of South Africa, Sasol, TotalEnergies South Africa and naamsa, who will
serve on the interim board.
POST-COP26 REFLECTIONS
Various outcome statements from UNFCCC Conference have been published:
• The launch of the Adaptation Research Alliance (ARA), a coalition of
global adaptation actors that will catalyse investment in action-oriented
research and innovation for adaptation that strengthens resilience in
communities most vulnerable to climate change.
• The publication of a Joint Nature Statement by the Multilateral
Development Banks, committing to give nature more prominence in
their policies, analyses, assessments, advice, investments, and operations.
• The development of the COP26 Health Programme, which will enable
transformational change in health systems globally to protect both
people and planet while elevating the trusted voices of health
professionals to present the health argument for higher ambition on
climate change action.
• The formation of the Zero Emission Vehicles Transition Council.
• The commitment to four new “Missions” to catalyse investment to
NEW MARKETS FOR IPPs
After a continent-wide search, with entries from 27 countries across Africa, award-winning
Dr Gideon Idowu from Nigeria is the third recipient of the annual Jennifer Ward Oppenheimer
Research Grant of US$150 000.
Idowu’s research explores how, through poorly enforced environmental laws, Africa
contributes significantly to global marine plastic pollution, as well as the contamination of its
own freshwater bodies, upon which many rural populations depend for drinking water. Idowu’s
study intends to provide scientific evidence of the impacts of microplastics, to inform policy and
attitudinal changes across the African continent.
accelerate technologies to facilitate urban transitions, eliminate emissions
from industry, enable carbon dioxide removal and produce renewable
fuels, chemicals, and materials.
• The launch of the Breakthrough Agenda which commits countries to
work together to make clean technologies and sustainable solutions the
most affordable, accessible, and attractive option in each emitting sector
globally before 2030.
• The commitment to the Global Action Agenda on Transforming
Agricultural Innovation.
• Support for the conditions for a just transition internationally.
• Focus on the Energy Transition Council.
• Support of the product efficiency call to action, in recognition that high
energy consuming products are a key driver of the growth in energy
demand, and the proliferation of energy efficient equipment and appliances
is an important part of sustainable economic growth and development.
The amendment to schedule 2 of South Africa’s Electricity Regulation Act allows privately generated power to be transmitted across the national
grid to company facilities in a willing-buyer willing-seller model, known as “wheeling”.
This will also facilitate power transmission from sites with good wind and solar resource to businesses whose locations are not conducive to
cost competitive renewable energy production. Larger plants could potentially sell energy to several separate customers based on their electricity
needs. Unlike in other markets abroad, where an IPP’s excess capacity can be sold back into the national grid, here the onus to find a power
purchaser will rest with the IPPs.
The threshold increase will stimulate an entirely new market for power trading in which actors will position themselves as brokers, linking
private generators with customers.
The South African connection management interface space, already thriving on a small scale, can now look forward to the prevalence of much
larger deals. While the infrastructure for it is already in place, the regulatory frameworks for wheeling are still being set into law.
RESEARCH GRANT AWARDED
By Paula-Ann Novotny, Webber Wentzel
COVID MASKS
UNMASKED
Since the start of the pandemic, disposable
masks are lying discarded all over the country.
According to Brendon Jewaskiewitz, President
of Institute of Waste Management of Southern
Africa (IWMSA), the problem is snowballing.
“Studies have shown that globally, about
130-billion disposable masks are being used per
month. That equates to an astounding 3-million
per minute,” Jewaskiewitz says. He emphasises
the issue of single-use masks and their disposal
can’t be addressed without acknowledging that
it is part of a bigger plastic pollution problem,
and that human behaviour is at the core of it.
6
7

SPECIAL REPORT
SPECIAL REPORT
A snapshot of
AFRICA IN THE NEXT
FIVE YEARS
Tech, sustainability and trade trends
Source: UN, Fitch Solutions
We believe that this rapid growth in urban populations will also see
increased focus on the use of new technologies and leapfrog innovations
as well as sustainability, particularly through growing the renewable
power sector, emissions reduction efforts and increasing restrictions on
single-use plastics.
Africa: Urban population by sub-region, mn (2000-2035).
The rapid pace of urbanisation in Africa is being driven by three
key factors: rural-to-city migration, in-city population growth and
the modernisation of previously rural population clusters, where rural
areas are transforming themselves into urban spaces because of natural
population growth and accumulated density. The establishment of
new cities in SSA has seen limited success in alleviating pressure on the
more established cities in recent decades, particularly in West Africa.
The fortunes of Yamoussoukro (established in 1983 in Côte d’Ivoire)
and Abuja (declared the capital in 1991 in Nigeria) offer important
lessons for investors in consumer-facing sectors and current planners
of new cities. Abidjan and Lagos are still significantly more populated
than the other major and/or capital cities in these countries. Populations
continue to prefer migrating to or staying in the larger, more established
cities with better infrastructure, more vibrant commercial hubs and
proximity to ports and economic opportunities. We believe that across
the region, countries will seek to increase investment in infrastructure,
particularly through expanding and connecting existing cities and towns,
through strengthening public-private partnerships and increased use of
technology-driven solutions.
KEY SECTOR TRENDS
Infrastructure. Businesses in the construction, energy and transport
space can capitalise on the urgent need for development and expansion
of existing cities. The infrastructure gap can be bridged through a
significant rise in public-private partnerships (PPPs) for infrastructure in
major cities through the development of tolled roads, low-cost housing,
In this special report, Fitch Solutions
unpacks the broader medium- to longterm
trends in technological adoption,
and a stronger push for ESG, as potential
drivers of long-term economic and
social development on the rapidly
expanding continent.
Around 603.5-million people in Africa are urban residents, and
by 2030 we estimate that this will rise to 817-million, and
further to 1.47-billion by 2050. Sub-Saharan Africa (SSA) is
leading the growth, as the share of the urban population is projected
to increase from 41.8% in 2021 to 46.8% and 58% by 2030 and 2050
respectively. With this rapid growth in urban clusters, economies
across the region will see increased demand for goods and services
particularly for consumer facing sectors such as food and drink, retail,
autos, agribusiness, healthcare, ICT as well as industries such as power
and construction.
8
9

SPECIAL REPORT
SPECIAL REPORT
Source: UN, Fitch Solutions
DEMAND ACROSS KEY SECTORS
Africa: Urban population, mn (2025). Note: Circled numbers indicate
urban clusters of over 500 000 for countries with two or more clusters.
sanitation, electricity, health and education. Governments that prioritise
cooperation with the private sector through measures such as PPPs will
see the most investment in sustainable electricity generation sources in
their respective markets.
South Africa, Morocco and Egypt boast the most diverse and largest
industrial bases in Africa and face the most significant pressure to move
towards sustainable energy sources for critical value chains. According
to the latest available data from ClimateWatch, South Africa accounts
for around 1.06% of global greenhouse gas emissions, while Nigeria’s
contribution stands at 0.73% and Egypt accounts for around 0.6%.
PRESSURE TO REDUCE EMISSIONS WILL DRIVE GREEN INVESTMENTS
Regional issues about
sustainability will remain mainly
company-driven to support
brand image.
Power. Liberalised power generation markets and vast solar power
potential will make Egypt and Morocco the renewables generation
growth outperformers in Africa over our forecast period to 2030. By
investing heavily in the expansion and improvement of their transmission
and distribution and generation infrastructure, Angola and Zambia will
see the most significant improvements in power grid efficiency over the
decade, reducing losses from the grid and improving the reliability of their
electricity supplies. Kenya and Morocco will be the most conducive power
markets for sustainable investment in 2021, with the most attractive
balance between renewables generation, grid efficiency and share of
renewables in overall generation.
Telecoms, media and technology. The pandemic has enabled new
digital-centric opportunities for growth, mainly driven by increased
restrictions on movements. In key markets, such as Ethiopia, growth will
be driven by new users coming online. In the region’s outperformers, we
have highlighted cloud, streaming and manufacturing as key areas where
Big Tech will lead. The African telecoms market is poised to provide longterm
demand for data centres as it undergoes significant technological
development. Data centre investments will propel demand and broaden
the range of IT solutions available in the market, supported by global
players Microsoft, Huawei and Amazon Web Services investing heavily to
bolster their presence in the region.
On the downside, power supply challenges in key markets will increase
reliance on costly alternative energy solutions, raising operational costs
for investors. In addition, the dearth of adequate, secure IT infrastructure
means that many countries will be increasingly vulnerable to data theft
and growing cybercrimes, necessitating investment in cybersecurity.
Retail. The Covid-19 pandemic resulted in significant disruptions to the
retail sector as consumers ability was limited to movement restrictions and
restrictions on retail store operations. Consumers adapted to eCommerce
as it offers a safe and convenient way to make purchases. We expect
eCommerce to remain a part of SSA consumer’s purchasing patterns over
the coming years. This will be supported by the region’s high mobile internet
penetration rate and increasing investments in eCommerce services by
consumer facing business such Mass Grocery Retailers (MGR) and clothing,
footwear and accessories retailers. Video on-demand services are in the early
stages of development and adoption in the SSA region as it has historically
been dominated by pay-TV services. However, over the coming years, we
expect streaming to make up a larger share of entertainment consumption,
particularly as players in the industry are making efforts to invest in content
that appeals to audiences across the region.
Healthcare. Digital health will strengthen healthcare operations, while
telemedicine will increase health access in rural areas. Growing mobile
phone ownership and internet access will further facilitate growth
in digital health after the pandemic, although challenges remain.
Environmental sustainability in the medical device industry is still a minor
issue considering the health benefits associated with the sector. Complex
supply chains due to an over reliance of imports in SSA contribute
to greenhouse gas emissions, but a complete ban on plastics in the
medical device industry is still very unlikely and sustainable packaging
will continue to become increasingly important. Regional issues about
sustainability will remain mainly company-driven to support brand image.
Autos. Digital logistics start-ups and rising M&A activity will be key in the
development of tech-enabled freight and logistics solutions across SSA.
This will drive growth in new commercial vehicles sales in the region.
Ecommerce proliferation across the region is helping to drive last-mile
delivery solutions and this in turn will boost light commercial vehicles
and motorcycle sales. The growth of ecommerce and e-logistics will drive
sustainable transportation initiatives as firms embrace environmental, social
and corporate governance (ESG) initiatives by renewing Africa’s ageing CV
fleet that is often more polluting and promote electric vehicles (EVs).
Although the sustainability drive in Africa will lag that of the rest of the
world, there are a few pockets of the continent’s automotive industry that
READ REPORT
THOUGHT [ECO]NOMY
greeneconomy/report recycle
AFRICA BEYOND THE PANDEMIC: Tech, Sustainability & Regional Trade
Transformation | Fitch Solutions [September 2021]
The Covid-19 pandemic has catalysed stronger progress towards digitalisation across key
industries targeting Africa’s rapidly urbanising population. Sustainability will be more of a focus
area, though targets will differ by country, and key initiatives will gain traction in varying degrees
across industries, with the consumer and retail, autos and technology sectors best placed to lead.
Heavy industry will also play a key role, as the region’s population is set to benefit from higher
electrification rates and a recovery in domestic and global demand for products as well as stable
and strong long-term trade growth, which will support road and port infrastructure construction.
The report reveals:
• How Covid-19 has accelerated e-Commerce and digital health uptake in SSA
• The outlook for Africa’s data centre market
• The acceleration of sustainability initiatives in SSA’s food and drink industry post-Covid-19
ORDER REPORT HERE FOR US$995
fitchsolutions.com
offer opportunities to improve sustainability. E-logistics firms will be at
the forefront of purchasing EVs as the income gained from transportation
services rendered will be used to cover some of the purchasing costs. We
note that as businesses in Africa increasingly drive towards a higher degree
of sustainability, they will find it easier to source funding for sustainable
projects amid the ESG investing boom.
Logistics and supply chains. Deeper regional trade integration in the years
ahead will allow countries to specialise and exploit economies of scale,
thereby improving productivity and growth. However, pandemic-induced
logistics bottlenecks have thrown global supply chains out of sync since
2020, causing delays at ports, causing container shortages and recordhigh
shipping rates in 2021. On the other hand, economic disruptions due
to the pandemic have accelerated plans to boost economic diversification
and supply chain resilience all around the world, and Africa is no exception.
Increased digitalisation and streamlined customs procedures are key
measures that will strengthen economic growth and deepen regional
integration over the coming decade. Benefits will be concentrated in a
few countries with strong logistics, security stability and those that are
increasing efforts to ease trading across borders through strengthening
hard and soft infrastructure.
Source: Our World in Data, Fitch Solutions
Africa and key markets: CO2 emissions, per capita (1990-2019).
25 55 61 65
Intra-Africa supply
chains: digitalisation
to unlock
opportunities
Sustainability in Africa’s
autos: EVs, natural gas
and ICE vehicles offer
opportunities
The top power
markets for
sustainable power
investment in Africa
Cooperation between public
and private sector key for SSA
power sector development
post-pandemic
This commentary is published by Fitch Solutions Country Risk & Industry Research and is not a comment on Fitch ratings’ credit ratings. Any comments or data included in the report are solely derived from Fitch
Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
10
11

THOUGHT LEADERSHIP
THOUGHT LEADERSHIP
Are Cities to Blame for
COVID-19?
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the
age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the
season of Light, it was the season of Darkness, it was the spring of hope, it was the winter
of despair, we had everything before us, we had nothing before us, we were all going
direct to Heaven, we were all going direct the other way – in short, the period was so far
like the present period, that some of its noisiest authorities insisted on its being received,
for good or for evil, in the superlative degree of comparison only.”
Charles Dickens, A Tale of Two Cities (1859)
Until recently, many experts prophesied an urban future but now the pandemic has made
that future less clear or, more precisely, the definition of urban more problematic. Covid-19
has upended our fundamental relationship with the city. But even if Covid-19 had not done
so, it is time to re-imagine our fundamental relationship with the city anyway. Covid-19
has just shone the spotlight on to the problem.
BY LLEWELLYN VAN WYK, B.ARCH; MSC. (APPLIED), URBAN ANALYST
A
central theme arising out of the pandemic is whether Covid-19
signals the death of the city. As Tony Matthews puts it: “Many
urban dwellers are redefining their sense of place in response to
Covid-19. We may not view our cities the same way after this pandemic.
Our perceptions and priorities may change, perhaps permanently. As
we start planning for cities after this pandemic, we should recognise
this task is as much philosophical as practical.” 1
Pandemics do challenge existing perceptions, values, and paradigms
about the meaning of progress, modernity, and success. Covid-19 is no
different and is also challenging prevailing perceptions about urban life.
When a major global shock occurs, such as Covid-19 (or 9/11, or potentially
future climate change related events), it fundamentally challenges all
orthodoxy by stressing hitherto covert systemic fault lines, which are
unable to withstand the unleashed forces.
Bruce Schaller perhaps sums it up best when, in the CityLab, he writes,
“The oldest trope in America is back: Cities are bad. Cities mean density
and density means human contact, and human contact, in the crucible
of the pandemic, means illness and death.” The problem, he writes, is not
cities and density. 2
David Madden too observes that cities are once again being cast as
threats to public health and social order and that some commentators
believe there will be a mass exodus from cities, a trend accelerated by
home working, and that large, dense cities are no longer viable.
Samuel Kling, a Global Cities Fellow at the Chicago Council of Global
Affairs, notes the long history of blaming urban areas rather than
economic factors for physical and moral ills. 3 But, he argues, density
can be an asset for fighting coronavirus. He argues that the diagnosis
of Covid-19 as a uniquely urban problem reflects historical tropes about
the dangers of urban space more than current evidence. Citing statistical
analysis, he argues that there is not a consistent connection between
big-city density and coronavirus impacts.
On the contrary, he points out that some of the world’s most heavily
settled spaces – Hong Kong, Seoul, Singapore – have proved to be the
most formidable at containing Covid-19 while in the US, as an example,
small towns in Georgia and Louisiana suffer along with New York City.
He argues that the demonisation of density harkens to the heyday of
urbanisation in the late 19th and early 20th centuries when American civic
leaders and reformers of the time embraced the notion that urban social
problems – disease, poverty, immorality – stemmed from the physical
environments of cities.
This ideology of “moral environmentalism,” as historian Alexander
von Hoffman termed it, formed the foundation of US urban planning
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13

THOUGHT LEADERSHIP
THOUGHT LEADERSHIP
and reform for decades. Now, he thinks, this legacy is re-emerging with
coronavirus, threatening, as it did in recent urban history, to lead to
distorted, ideological responses that malign city life and obscure the root
of the problem.
He concedes that while crowded tenements and inhumane
conditions did indeed have deleterious effects on residents, the moral
environmentalists tended to blame urban spaces while neglecting the
economic system that created these spaces. He argues that the moralists
believed that if changing the urban environment could solve urban social
problems, the economic system of industrialisation could be left intact.
Cities can generate lifesaving
networks of social ties which combat
isolation and mitigate the effects
of disasters.
Therefore, he argues, a standard method for improving impoverished,
overcrowded urban neighbourhoods was simply to demolish them. He
notes that while some urban voices argued for the building of urban parks
to solve urban problems, the weaknesses of this reform vision – and its
strengths – found clear expression in the era’s public parks movement,
which touched cities across the country in the late 19th century.
Landscape architects, such as Frederick Law Olmsted, Charles Eliot,
and Jens Jensen, sought to solve urban social problems through the
reform of urban space. They imagined parks as a vital source of fresh air
and naturalistic beauty – features that take on special gravity in cities
now under lockdown. But they also treated parkland as a mechanism for
solving cities’ thorniest social problems. Critically, parks, predicated on
the idea that space was the problem, did not address the larger system
that created inhumane urban spaces in the first place.
Urban park advocates embraced careful design because they viewed
aesthetic reform as a tool for social reform. It was Olmsted, the movement’s
leader, who stated that the reasons disease and misery and vice and crime
has been much greater in towns could be attributed to a lack of fresh air
and the constant stimulation of bustling city life. In his view, only “relief
from” city life could return residents to “a temperate, good-natured, and
healthy state of mind.”
Olmsted viewed urban life as a threat to “the mind and the moral
strength” of residents. This aesthetic, rather than ecological approach
to urban parks ironically resulted in park landscapes that were in and of
City leaders should remember
their problem is the virus,
not urban life.
14
15

THOUGHT LEADERSHIP
THOUGHT LEADERSHIP
themselves artificial: hills levelled and built up, ponds dug, and existing
vegetation replaced with thousands of foreign and native plants. The
objective never was ecological: in reformist thinking, creating naturalistic
spaces could improve public health alongside civic health, and cure
physical ailments together with moral ones. They believed they could
quell the threat of social disorder by providing a structured, common
space for cities’ motley populations.
Some contemporaries of the time took their belief in parks’ healing
powers to improbable lengths: As historian Paul Boyer writes, one park
administrator claimed in a popular reform journal that with a bigger parks
budget, he could decrease prostitution in his city by 98%.
But here is the critical issue: convinced that the environment was
both disease and cure, park builders put their faith in spatial reform, not
structural reform. More direct interventions – such as social housing,
robust regulatory protections, and the elements of a welfare state – had to
wait for reformers with different worldviews.
Tracy Loh and Charles Leinberger identify three natural enemies of
urbanism: crime, terrorism, and pandemics. In the 1970s and 1980s, they
note, crime seemed like an existential threat to American cities. In the
2000s, it was terrorism. Today they suggest it is pandemics, especially
as Covid-19 sweeps across the country’s dense urban areas. 4 For many
people, these three cases provoke a fear of cities, especially the dense
clustering of diverse populations. This fear can, they suggest, prevent
decision-makers from understanding and implementing solutions to
those problems. Fear can distort the market, leading public, private, and
philanthropic sectors to fail to invest their money into the right places.
And more critically, given the events in Atlanta in June 2020, they add that
fear of cities feeds racism.
But looking at the real dynamics of crime, terrorism, and pandemics,
one can see that, many times, this fear is misplaced. The actual relationship
between urbanism and threats of crime, terrorism, and pandemics is not a
straight and simple line. Noting the prevalence of Covid-19 cases in places
such as New York City, Los Angeles, and Chicago – urban counties that are
the heart of the US economy – it is easy to conclude that the pandemic is
primarily a big city problem.
They point out that when cases are mapped per capita instead of by
absolute number, a different story emerges. Los Angeles and Chicago are
simply places that have a lot of people, and thus more Covid-19 cases.
More tellingly they note that the spread of the virus is driven by crowding
behaviour, not just density, which is why there have been major outbreaks
in rural areas such as Blaine County, Idaho, and Albany in Georgia.
One park administrator
claimed in a popular reform journal
that with a bigger parks budget,
he could decrease prostitution
in his city by 98%.
They point to rural areas suffering relatively higher death rates from
the virus because their hospital systems are quickly overwhelmed and
their populations are underinsured, older, and have more underlying
health conditions, which is all consistent with how the typical annual
influenza affects the United States. They make the argument that cities,
suburbs, and rural areas can all be affected by Covid-19.
Regardless of size or density, all places need to invest in the qualities
that build resiliency. While fear of cities regarding pandemics may be
misplaced, they suggest that the solutions to such crises can have a place
everywhere. They remind us that Covid-19 is not the only crisis we are
facing – climate change, regional divergence, and our aging population
also call for more transformative placemaking.
So, what lessons will today’s city leaders take away from the pandemic?
As in the past, the answer partly depends on how they diagnose the
problem. If they follow the precedent of moral environmentalism, they will
fault the city itself. But doing so distorts the reality of the pandemic and
obscures the systemic policy failures that have made certain places and
While cities are vulnerable
amid the pandemic, they are
not the problem.
populations – particularly the marginalised – far more vulnerable.
A dense urban environment can be an asset in fighting disasters like
Covid-19. Density means cities can more easily concentrate resources and
social services where needed. Residents, in theory, have quicker access to
hospitals and healthcare. And when nurtured by “social infrastructure” –
community centres, libraries, and yes, public parks – cities can generate
lifesaving networks of social ties which combat isolation and mitigate
the effects of disasters. Building on these strengths can make cities more
humane and resilient in the pandemic’s aftermath.
As Covid-19 enlarges the window of policy possibilities, city leaders
should remember their problem is the virus, not urban life. They can
improve their public health and transportation infrastructure by learning
from the dense places that have managed to avoid the harshest impacts of
the virus. They can strengthen the social infrastructure that serves as a first
line of defence against pandemics, supporting neighbourhood institutions
to promote cohesiveness while allowing for distance. They can tailor their
responses to meet the threat of climate catastrophe, which cities – for all
their flaws – remain best positioned to address. They can relieve the deeprooted
inequality that has contributed to Covid-19’s uneven urban spread.
More critically, while cities are vulnerable amid the pandemic, they
are not the problem. Recognising that fact is the first step, to addressing
coronavirus on its own terms, as it appears not just in cities, but also in
suburb and countryside – and to building a more resilient, humane urban
life afterward.
REFERENCES
1 Ibid.
2 Schaller, B. 2020. “Density isn’t easy. But it’s necessary.” CityLab, May 4, 2020. .
3 Kling, Samuel. 2020. “Is the city itself the problem?” CityLab, April 20, 2020. .
4 Loh, T. and Leinberger, C. 2020. “How fears of cities can blind us from solutions to Covid-19.” .
16
17

FINANCE
FINANCE
Our objective is to see projects
become more bankable, fully-financed
and to reach financial close.
projects. This support extends to local community trusts in the form of
equity funding.
While this is a high-risk category, we have managed the risk and
achieved success with these categories of funding from as early as Bid
Window One (BW1) through to BW4, as well as round five and in the risk
mitigation programme.
DBSA was very pleased that several bidders we supported in the
RMIPPPP were successful in being named preferred bidders.
THE DBSA:
DEVELOPING
DEVELOPMENT
Let’s unpack this word “support”. As a development finance institute
(DFI), I assume your support speaks to a more favourable set of
lending terms than what may be available from commercial banks?
For example, aspiring black energy entrepreneurs who would
not necessarily be able to raise an equity portion off their own
balance sheets can apply to DBSA for funding, and would qualify
for assistance?
Absolutely. From a BEE perspective, the pricing of that debt is very
competitive when compared to what certain other institutions charge.
We provide finance to BEEs on a limited recourse basis. We can offer
these because we are comfortable with the revenues being generated
in the underlying project.
The strength of the underlying project allows us to take a position
and provide debt financing to that BEE entrepreneur, at a competitive
level, compared to other BEE funding instruments, such as preference
shares, which are more costly to the BEE entrepreneur. This is DBSA’s
competitive edge.
Recourse versus limited recourse versus non-recourse funding.
What are the points of relaxation between these different categories
of funding?
In this space, the funding that you find is “limited recourse” financing. We
rely solely on the value of the underlying project and not on the lender’s
balance sheets. These are the key principles of project finance, and BEE is
financed on a project finance basis.
Lungile Tom, senior investment officer, DBSA.
Gordon Brown, GreenEconomy.Media, caught
up with Lungile Tom, DBSA, to discuss the Bank’s
competitive edge, an edge with compounding
success that is built from building the success
of others.
GB: What role has Development Bank of South Africa (DBSA) played
in support of the DMRE’s procurement programmes?
LT: DBSA was instrumental in supporting the IPP office (the agency
designated with implementing and rolling out procurement programmes
on behalf of the DMRE) at inception. We provided the seed capital for
the establishment of the IPP office. Since then, DBSA has continued to
support the initiatives of the IPP office.
DBSA has supported several projects that bid in the early and
subsequent rounds of the procurement programmes, by providing senior
and mezzanine debt, and most importantly for the Bank, in focussing on
funding the BEE component.
The DMRE programmes seek to address multiple economic
development imperatives through the various bidding rounds, and
these align perfectly with the mandate and objectives of DBSA.
We assist many black equity partners, including black women-owned
entities, with BEE funding, which enables them to take stakes in the IPP
In the context of the REIPPPP and of the renewable energy sector
generally; what role does DBSA play within the broader value chain?
This speaks to the activities of the DBSA and how we are structured as
an organisation. We have divisions, with some units that work solely on
providing planning services and assistance to various state organs, such
as municipalities and other institutions.
In this context, we move on from planning to project preparation,
where we become greatly involved, and indeed instrumental, in
supporting projects to reach bankable feasibility stage. At this stage, we
can open the project to other funders. We carry a project through to the
stage where other funders come in. And we provide this project support
within South Africa as well as to the rest of the continent.
Key criteria within projects are seldom aligned. They are quite specific
to country and sector, requiring specialised project preparation work.
Our space primarily deals with project finance, and these are bankable
projects ready to be financed, but as indicated we do have a division
focused on project preparation.
18
19

FINANCE
We also fund municipalities and state-owned companies, so the
nature of the finance depends on the structuring of that project or
financial need. Once projects are funded, we continue to oversee the
operations, maintenance, and support the monitoring of outcomes of
whatever infrastructure project it would be.
The municipalities form the biggest chunk of our business, as the DFI.
We already provide capacity and bulk infrastructure support. Adding
another layer of EGIP funding shows how involved we have become in
the entire municipal value chain.
Specific to the REIP, and even more specific to wind energy projects,
how would you define DBSA’s role? What percentage of your
portfolio is allocated to renewable energy and/or wind?
Subject to correction, of our energy portfolio, renewable energy is
approximately 42%. I would say wind projects account for 10% of
the 42%. We see growth in the renewable energy sector in South Africa
aligned with the integrated resource plan (IRP). As DBSA’s mandate is
to facilitate the IRP, we see our portfolio of renewable energy projects
projected to grow to approximately 50% of our total portfolio, with wind
projects likely to account for 15 to 20%. This is a projection, and it will
ultimately be driven by the market and availability of projects under
development in South Africa and Africa.
DBSA is accredited by international organisations like the Green
Climate Fund (GCF) and the Global Environment Facility (GEF). How
does this enable the Bank to fulfil its mandate in the region?
Our accreditation allows us to be more proactive in responding to market
failures or gaps in the market that need to be addressed. This occurs
when the private sector is unable or unwilling to provide funding for a
particular investment type deemed developmentally advantageous.
We worked with GEF in the small IPP programme where we developed
a solution to assist black entrepreneurs to have access to adequate
competitive financing into their project. Likewise, with GCF, in support
of embedded generation because we saw a need for a higher level of
first-class or credit enhancement in those projects. We worked with the
GCF to come up with something concessional to support the bankability
of those projects and to offer more affordable funding.
Let’s talk about DBSA’s support of the small embedded generation
projects under the Embedded Generation Investment Programme
(EGIP). I understand that the initial book is closed. Please outline the
details of the programme.
The EGIP was designed to support projects in the embedded generation
space. These are projects that have private off-takers in the commercial
and industrial space as well as municipalities. We saw a growth in this
sector and identified a need for a first-class credit enhancement in the
capital structure of those projects.
We rely solely on the value of
the underlying project and not on the
lender’s balance sheets.
We provided the credit enhancement in the form of a subordinated
debt, with a higher, more competitive rate than would be offered to
REIPPPP projects, improving the affordability of these projects to endusers.
A facility of this nature is second ranking to senior debt, but also
comes in at a cost that is concessional to the project.
Our objective is to see projects become more bankable, fully-financed
and to reach financial close. We want to see this space grow.
As we saw in BW5, the subscription level was five times the capacity
bid. Nevertheless, there are many projects developed on sites with
available resources and all that’s needed is an off taker. It then becomes
about trying to grow that market, which in turn may allow energy users
to secure their energy supply and trigger further development.
Lungile Tom speaking at Windaba 2021.
CAREER HISTORY
Lungile L Tom is a senior investment officer at DBSA, specifically
focused on project-financed projects across various infrastructure
sectors in South Africa and the rest of the Africa. Tom is a chartered
accountant (CA (SA)) and a 2020/2021 Harvard South Africa Fellow.
Her educational background includes Master of Philosophy (MPhil) in
Development Finance.
9-12 May 2022 | Cape Town, South Africa
Reconnect with
the mining industry
in-person
Mining Indaba will be back in
Cape Town in 2022
Get ready to return to Cape Town as the industry unites to
fuel transformations and collaborations. The must attend inperson
event will bring together visionaries and innovators and
connect you with your next business opportunity.
DBSA WINS 2021 IJ GLOBAL ESG AWARD
The judges identified DBSA as the winner of the Sub-Saharan Africa category, recognising the DFI for its issuance of its first ever €200-million green
bond to target climate mitigation, adaptation or indeed both. The green bond was issued through a private placement with French DFI Agence
Française de Développement (AFD) and structured in alignment with DBSA’s Green Bond Framework, which reiterates the lender’s commitment to
playing a role in the transition to a low-carbon economy. The framework is aligned with the International Capital Market Association (ICMA) Green
Bond Principles.
One judge pointed to “lots of firsts in this transaction”, adding that it was “difficult not to applaud the channelling of such extensive investment
into affordable and clean energy in South Africa”. Another judge added: “It is right and proper that development banks take the lead in ESG and set
an example for others to follow.”
“The bonds have been structured in alignment with the DBSA’s recently released Green Bond Framework, which reiterates the DBSA’s commitment
to playing a role in the just transition to a low-carbon economy; this is the first green bond issuance by DBSA and the first time a South African issuer
issues bonds in Euroclear France.”
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20

FINANCE
FINANCE
A CHANCE TO CHANGE
HISTORY IN SOUTH AFRICA
Climate finance for a transition
away from coal
The announcement made international headlines and is highly
significant for many reasons. The finance offer is large; it has
a strong element of justice; it’s not just about a few individual
projects; and it’s for a country that has long been shaped around its
dependence on coal.
This partnership represents an important opportunity for South Africa
at a critical juncture, if it is approached judiciously and if the domestic
politics can be managed. A failure to engage the partnership strategically
will squander the moment, resulting in an incremental outcome that won’t
unlock the just transition the country so desperately needs. A failure to
tame the politics would put the entire flow of finance at risk.
SPECIFICS OF THE SUPPORT
The financing partnership mobilises an initial R131-billion
(US$8.5-billion) over the next three to five years. Some of this
in the form of grants and some is concessional debt finance
(cheaper than commercial debt). The partnership is intended
to enable a range of outcomes. One is to speed up the process
of moving away from carbon in the electricity system.
South Africa has recently updated its nationally determined
contribution to the international emission-reduction effort.
Importantly, the finance will support the workers and
communities who will be affected as the country moves away
from coal.
Another aim is to support a sustainable solution for the
South African power utility’s debt and ensure its long-term
financial sustainability in the context of power sector reforms.
Lastly, finance will be channeled towards the development of
the electric vehicle and green hydrogen sectors.
In the opening days of COP26, a financing partnership was announced between South
Africa and a consortium consisting of France, Germany, the UK, the US and the EU. The
partnership aims to support South Africa’s just transition to a low-carbon economy.
Essentially a just transition is one where no one is left behind.
BY EMILY TYLER*
22
SIGNIFICANCE OF THE FINANCE
Pitched at an initial US$8.5-billion, the partnership has the potential
to be one of the largest individual climate finance transactions to
date. Large Green Climate Fund transactions hover closer to the
US$1-3-billion mark.
Its justice element is important. It has an explicit focus on supporting
those who face immediate transition impacts, such as the approximately
80 000 coal miners and the communities who depend on them. The
partnership envisages that the climate finance will enable an energy
sector transition, which is different to the usual focus of climate finance on
individual green projects.
The deal is significant because it has been announced despite South
Africa’s coal legacy and influential incumbents. The country has spent over
Global capitalism
is now oriented towards a
low-carbon economy.
100 years building an economy whose competitive advantage is based on
coal as its primary energy source. The legacy of coal is evident in physical
infrastructure, the way the energy sector is organised and the form of
energy sector institutions. It influences the way finance flows and power
sector contracts are written. And there are powerful groupings who have
vested interests in keeping it all this way for as long as possible.
Ironically, it is this legacy that enables South Africa to offer the world
significant and globally cost-efficient emission reductions as it changes
course. South African electricity is the most carbon intensive in the world.
Because renewable energy is now the cheapest form of power supply,
decarbonising the country’s electricity supply by accelerating the phase
down of the coal fleet will yield a large volume of emission reductions at
very low cost, especially compared to more expensive emission reduction
options in other sectors and countries.
But the political and institutional challenges to realising this transition
are very real.
PACING PROVOCATION
The global target of achieving an average of net-zero carbon emissions
by 2050 is an enormous challenge. It requires rapid and disruptive
change as economies and societies globally are decarbonised within ►28
23

FINANCE
FINANCE
THOUGHT [ECO]NOMY
CLIMATE FINANCE TO TRANSFORM ENERGY INFRASTRUCTURE AS PART
OF A JUST TRANSITION IN SOUTH AFRICA | Research report for SNAPFI
project | University of Cape Town [July 2020]
READ REPORT
greeneconomy/report recycle
The just transition transaction (JTT) has been developed in technical detail since 2019 by
Meridian Economics (2020) and making the financial deal is work in progress. This case study
reflects on the JTT, seeking to understand its architecture. The purpose of the study is to
understand the potential of a just transition transaction to accelerate the phase out of coalfired
power and to fund development projects.
The spatial scale of the analysis is national, in that Eskom debt threatens South Africa’s
financial sustainability. Physically, the Mpumalanga province is a key focus of this study. This
province of South Africa contains its central coal basin, most of the coal-fired power stations
are surrounded by poor communities with several small rural towns dependent on coal for
livelihoods. Mpumalanga is a micro-cosm of the challenges of sustainable energy development
in South Africa – environmentally, socially and economically.
35 61 82
What is a just
transition?
South African
interpretation
54
Key elements
of the
problem
The just
transition
transaction
Renewables
ownership
in the just
transition
READ REPORT
THOUGHT [ECO]NOMY
greeneconomy/report recycle
SUPPORTING JUST TRANSITIONS IN SOUTH AFRICA | Just Transition Case
Study | Climate Investment Funds [September 2020]
The term “just transitions” is used to acknowledge that there are multiple framings of just
transitions related to a variety of theories of change and world views. This has resulted in a
situation, whereby there is no one clear definition of just transitions, but rather a range of
positions, principles, and practices.
At the heart of the just transitions discourse(s) is the debate on whether addressing humancreated
environmental challenges, including climate change, inevitably requires choosing
between protecting the planet or precarious jobs and the economies that sustain (and
simultaneously exploit) people and nature. The falsity of the dichotomy is best summed up in
the slogan: “There are no jobs on a dead planet.”
The recent economic and social impacts of the pandemic, including massive job losses,
have provided an illuminating example of the devastating effects of a global systemic shock.
It is imperative for people to recognise that climate change has the potential to introduce or
exacerbate similar systemic shocks. Therefore, attention to climate change and fundamental
change at the global and local scales are of the utmost urgency and importance. Just transitions
focus attention on important questions related to change, including:
- Who decides what kind of transitions are needed?
- How are different groups included in the decision-making processes?
- Who benefits and loses in change processes?
- How can benefits be distributed and losses mitigated in both safe and just ways?
By raising these questions, the concept of “just transitions” highlights the significance of
encompassing issues of inclusivity and justice in change initiatives.
Courtesy of The Conversation
South Africa will need all the
support it can get to keep up
with the pace of change.
three decades. But technology and finance are already driving the
transition. This can be seen in the massive decline in the cost of
renewable energies and the accelerating shift of financial portfolios to
green investments. Global capitalism is now oriented towards a lowcarbon
economy.
As a small open economy, South Africa can neither resist nor control
these forces. And the country is in a vulnerable starting position as one
of the world’s most carbon-intensive economies. There is not much time
to avoid being economically marginalised as wealthier and nimbler
economies mobilise around net-zero goals. South Africa will need all the
support it can get to keep up with the pace of change.
Fortunately, as studies by the National Business Initiative and Meridian
Economics-CSIR show, accelerated electricity decarbonisation has two
big plusses. It is the cheapest way of providing a reliable electricity
supply to the economy. And renewables have the shortest lead time to
build. So they are the quickest and cheapest way to lift the country out
of its current power cut woes.
DAUNTING DETAILS
The just transition partnership announcement has achieved both a
political space and an implementation platform (the taskforce) to
start working out the support details. These details include the type
of financing instruments, what the finance will be used for, the mix of
grant and debt, and financing terms and conditions. An initial scope of
supported actions, financing sources and terms will be identified within
six months, with a full partnership work programme and investment
plan outlined within a calendar year.
Currently, there are many views on what the details could look like.
These include Eskom’s Just Energy Transaction, Meridian Economics’ Just
Transition Transaction and the Presidential Climate Commission.
The taskforce will have to work out how to:
• Ensure that alternative, attractive and sustainable economic
livelihoods are created in the regions that have depended on coal
• Prioritise spending on activities that will help to fundamentally
re-orientate South Africa’s energy sector as opposed to only achieving
incremental change
• Ensure that the grant and concessional finance components of the
partnership leverage rather than crowd-out commercial investment
• Achieve a transition pace aligned with South Africa’s international
climate commitments.
POLITICAL POWER
But if the technical details are formidable, a recent address by the Minister
of Minerals and Energy, Gwede Mantashe, demonstrates that the domestic
politics are even more so. In direct opposition to Ramaphosa’s vocal support
of the partnership and decarbonisation trajectory, Mantashe argued that
South Africa should continue to exploit its coal resources, suggesting that
the partnership is an attempt to pressurise the country to conform to an
international agenda that is not in the country’s best interest.
Despite the economic realities of a global energy transition well under
way, and the increasingly obvious technical, economic and social failings
of South Africa’s coal-based energy system, the political challenges to
leaving the coal legacy path are clear.
09 18 30 32
Objective and
intention of
case study
11
Importance and
principles of just
transitions
Just transition
framework in
the context of
South Africa
Project Case 1:
The Sere Wind
Farm Project
Project Case 2:
Xina Solar One
CSP Project
* Emily Tyler, honorary research associate, African Climate and Development Institute, University of Cape Town
24
25

ENERGY
IT’S A
GO FOR GREEN
The South African Wind Energy Association has put its voice of support behind the
first-of-its-kind green financing deal, announced at Cop26 climate talks.
BY SAWEA
Noupoort Wind Farm.
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board member.
Speaking on behalf of the wind power
industry and the country’s broader
renewable energy sector, this deal,
which comprises multi and bi-lateral
grants, concessional loads, guarantees
and private investment, will provide
impetus for South Africa’s accelerated
uptake of green energy.
“We view our sector as a key implementer
for the country to decarbonise its power
sector and increase its energy availability.
Hence, we look to the various policymakers within the Department of
Forestry, Fisheries and the Environment, the Department of Mineral
Resources and Energy; and the Department of Public Enterprises to
facilitate and lead this transition, which will no doubt be abetted by this
financing deal,” says Mark Tanton, SAWEA board member.
The US$8.5-billion package, committed by the UK, France, Germany
and the USA, is intended to speed South Africa’s transition away from coal
and represents a new model of green financing for emerging economies.
This forms part of the global Accelerating Coal Transition Investment
Programme, formulated by the Climate Investment Funds (CIF). The
programme is the first to target developing countries that lack adequate
resources to finance the shift away from coal, which is crucial to limit the
global temperature rise to 1.5 degrees Celsius by 2030.
“This makes sense as sustainable, cost-effective financing, is necessary
to enable developing countries to be able to implement their climate
change mitigation targets and accelerate the required energy transition
away from carbon-intensive power production to renewable energy,”
adds Tanton, who also reiterated that this announcement coincides
with the expected parliamentary tabling of SA’s Climate Change Bill
this month.
While many details as to the structuring of the funds and exactly how
it will be utilised are still to be ironed out, SAWEA notes there are several
considerations. This includes the just energy transition as well as Eskom’s
need to upgrade and add new transmission lines and renew its distribution
network to accommodate additional green electrons.
“In a nutshell, we need to remove CO 2
from the atmosphere as fast as
possible, and at the same time we need to drastically increase our Energy
Availability Factor, so that we can bring a halt to the ongoing and crippling
load shedding. The answer to all of this is a renewables-dominated power
system, which is also the most cost-competitive system for South Africa,”
concludes Tanton.
Cabinet has endorsed a new Nationally Determined Contribution
(NDC) range of 420- to 350-million tons of carbon dioxide equivalent
(Mt CO2-eq) for 2030, which represented a marked improvement on its
2015 pledge of 614 Mt CO2-eq to 398 Mt CO2-eq.
THE CLIMATE CHANGE BILL
• Provides for a coordinated and integrated response by the economy
and society to climate change and its impacts
• Provides for the effective management of climate change impacts
• Addresses that mitigation efforts should be based on the best
available science, evidence and information
• Gives effect to SA’s international commitments and obligations in
relation to climate change.
27

HYDROGEN
HYDROGEN
The opportunity to create new
engines of economic activity using
hydrogen has been validated through
this feasibility study.
“The study identifies potential projects that could constitute the
South African hydrogen valley and kick-start the country’s hydrogen
economy,” adds Michèle Azalbert, MD of green hydrogen, ENGIE.
Zanele Mavuso Mbatha, CEO, Bambili Energy, says: “We are pleased to
be working with Anglo American Platinum, ENGIE and the government in
developing the hydrogen valley programme for the country.”
HYDROGEN IN SA
GETS THE GREEN LIGHT
THE BOEGOEBAAI GREEN
HYDROGEN PROJECT
The Boegoebaai “green hydrogen” development has been designated a Strategic
Integrated Project (SIP) in the South African National Development Plan and is in the
Namakwa Special Economic Zone. The project’s location and classification as a SIP are
key enablers to exploring Boegoebaai’s potential as a global green hydrogen hub.
READ REPORT
Green hydrogen is a key priority for the country’s economic development. The Department
of Science and Innovation, Anglo American, Bambili Energy, Sanedi and Engie have
completed a feasibility study for South Africa’s first hydrogen valley.
Plus: SA’s race to green hydrogen
THOUGHT [ECO]NOMY
greeneconomy/report recycle
SOUTH AFRICA HYDROGEN
VALLEY | Final Report |
[September 2020]
Three catalytic green hydrogen hubs have
been identified in SA’s hydrogen valley:
Johannesburg, Durban/Richards Bay,
and Mogalakwena/Limpopo. These hubs
have been identified based on locations
with potential for a high concentration of
future hydrogen demand, the possibility
to produce hydrogen (access to sun/wind,
water infrastructure), and contributions to
the just transition.
The hydrogen valley will serve as an industrial cluster,
bringing various hydrogen applications in the country
together to form an integrated ecosystem. The initiative
is part of the work being done to support the implementation
of the National Hydrogen Society Roadmap, which was recently
approved by Cabinet.
SA’s proposed hydrogen valley will start near Mokopane
(Limpopo), where platinum group metals (PGMs) are mined,
extending through the industrial and commercial corridor to
Johannesburg and leading to Durban. The feasibility study can
be accessed in the report box on the left.
Natascha Viljoen, CEO of Anglo American’s PGMs business,
says: “The opportunity to create new engines of economic
activity through hydrogen has been validated through this
feasibility study with our partners. As a leading producer
of PGMs, we have for some years been working towards
establishing the right ecosystem to successfully develop, scale
up and deploy hydrogen-fuelled solutions. These include
investing in innovative ventures and enabling technologies, as
well as forging wide-ranging collaborations across industry, to
fully harness the transformative potential of green hydrogen for
our economy in SA.”
Sasol has been engaging with the Infrastructure and Investment
Office of the Presidency to develop a hydrogen economy in South
Africa. The company has signed a Memorandum of Agreement
(MOA) with the Northern Cape Development Agency to lead the
feasibility study to explore the potential of Boegoebaai as an export
hub for green hydrogen and ammonia. This study is expected to take
approximately 24 months. The outcomes of this feasibility study will
determine the next step of development.
Sasol has signed a MOA with the Gauteng Provincial Government
to leverage Special Economic Zones that have been earmarked as
enablers to unlocking South Africa’s green hydrogen market potential
for domestic use, such as mobility and aviation. In parallel, Sasol has
partnered with the Industrial Development Corporation who will
provide joint funding for the feasibility study.
“We are very excited to be leading this feasibility study as part of
unlocking South Africa’s potential to be a global green hydrogen and green
ammonia export player with the potential for sustainable aviation fuels in
the future. This will also be anchored by local demand for green hydrogen.
It is a tangible step forward for Sasol, as we seek to play a leading role in
establishing the Southern Africa green hydrogen economy,” says Priscillah
Mabelane, executive vice president for Energy at Sasol.
There is potential to create an
ecosystem anchored on localisation
to enable sustainable benefits
for the country.
Sasol continues to advance several catalytic projects to develop both
local and export opportunities in the region. This Boegoebaai project
is one of a number of green hydrogen, ammonia and power-to-X (P2X)
opportunities, which Sasol is assessing as part of its new strategy.
“There is potential to create an ecosystem anchored on localisation to
enable long-term, sustainable benefits for communities and the country.
The project has the potential to provide a significant number of long-term
sustainable jobs, infrastructure investment and skills development in the
country, enabling a just transition,” adds Mabelane. As the lead project
integrator, Sasol will bring together strategic partners along the value
chain and other enabling role players that will drive industrialisation of
the Northern Cape.
POLICY MILESTONES
• In May 2021, South Africa’s cabinet approved the Draft Upstream
Petroleum Resources Development Bill. The bill, which will replace
part of the existing Minerals and Petroleum Resources Development
Act, aims to provide a legislative and regulatory framework that is
conducive to investment in hydrocarbons on the back of significant
gas discoveries since 2019.
• South Africa’s government is expected to approve the Hydrogen
Society Roadmap by 2022.
• Green hydrogen is featured in the South African Renewable Energy
Masterplan and the Automotive Masterplan.
• In July 2021, Sasol Limited and the IDC concluded a memorandum of
cooperation to jointly develop and shape the energy environment to
advance South Africa’s green hydrogen economy.
Source: Fitch Solutions
28
29

HYDROGEN
HYDROGEN
READ REPORT
[ECO]NOMIC THOUGHT
greeneconomy/the upshot
THE RACE TO GREEN HYDROGEN IN AFRICA | Excerpt taken from
report: Africa beyond the pandemic* [September 2021]
*See report on page 8
As countries across the world move towards more sustainable energy sources, Fitch
Solutions examines five major Africa economies (Angola, Egypt, Nigeria, Morocco and
South Africa) that will participate in this transition. The green transition potential of
these states will depend on three key factors: infrastructure, policy and expertise.
Despite vast natural solar and wind potential across Africa, the bankability of green
projects will depend strongly on the investment and legal risk profiles of countries as well as
the development of a conducive sector-specific policy environment.
CURRENT EMISSIONS AND FUTURE TRANSITION
Over the medium-to-long term, countries across the globe will increase focus on the development and adoption of sustainable energy
sources, including green hydrogen. SA, Morocco and Egypt boast the most diverse and largest industrial bases in Africa and face the most
significant pressure to move towards sustainable energy sources for critical value chains. According to the CarbonBrief, Nigeria is among the
top 20 largest emitters in the world, the second highest in Africa after SA in absolute terms.
WHY GREEN HYDROGEN?
The proliferation of low-carbon hydrogen across multiple sectors will be key to achieving global climate goals, in line with the Paris Agreement
signed in 2015 (and COP26). Green hydrogen is distinguished from other types of hydrogen, as it is produced from renewable electricity
making it the cleanest hydrogen format, unlike the incumbent market leaders, grey and brown hydrogen, which are produced from fossil fuel
based energy. Blue hydrogen is also fossil fuel based but utilises carbon capture and storage (CCS) systems to mitigate the emissions and is
also, therefore, low carbon.
Although we expect Africa’s major economies to participate and move towards sustainable energy production and usage, most states in
SSA will lag regions such as Central Eastern Europe and MENA and to a greater extent vis-à-vis developed states. Nevertheless, we believe
that SA is best-positioned to drive the regional energy transition, followed by Morocco and Egypt, and that other traditional oil and gas
producers such as Nigeria and Angola, though lagging, could benefit from leveraging their existing natural resources, infrastructure and
human resource capabilities to participate in production and export of hydrogen.
SUSTAINABLE INDUSTRIAL DEVELOPMENT AND ENERGY TRADE
The use of green hydrogen could benefit multiple sectors, and for Africa these can be summarised into three main categories:
• Mobility. Hydrogen can be used to fuel maritime transport vessels, aircraft, private vehicles and freight trucks.
• Industry. Green hydrogen can be used as a fuel for energy-intensive industries such as the production of green steel. Businesses in the
mining, manufacturing and construction sectors will benefit most by the transition to green steel.
• Trade. Several countries in the region possess vast natural resources (natural gas, solar and wind potential) to produce blue and green
hydrogen, but lack sufficient infrastructure, domestic industrial clusters and supportive regulatory environments to drive higher local
use. Considering this, some states will look to develop hydrogen technologies and position themselves to become major hydrogen
exporters in the short-to-medium term, while transforming local industries on a longer-term horizon.
POLICY DIRECTION AND OPERATIONAL CONSIDERATIONS
The openness to foreign investment coupled with bureaucratic and legal environments will be key to attracting private sector participation in
renewables and green hydrogen production. Morocco, Egypt and SA are more welcoming to foreign investment and offer stronger incentives
for technology and energy industries, relative to Nigeria and Angola. In these states, progressive pro-business investment policies have driven
considerable industrialisation and development of renewable energy sources with notable success in public-private partnerships (PPPs),
relative to Nigeria and Angola.
In terms of bureaucracy and the legal environment, SA boasts strong contract enforceability and performs significantly better than Egypt,
Nigeria and Angola according to our Operational Risk Index metrics for “Trade and Investment Risk”. As seen in Nigeria and Angola, the risk
of slow policy reform momentum and the dominance of large state-owned entities in the energy hydrocarbons sectors will negatively affect
foreign direct investment into green energy solutions.
SA TO SHINE THROUGH TO 2030
SA is well-placed to utilise existing natural resources, such as wind and solar, to produce renewable power for green hydrogen production.
The country will likely attract significant investor interest in green energy as it is the region’s most industrialised economy with the largest
installed non-hydroelectric renewables capacity base in SSA and a strong PPP track record. Looking ahead, the presence of platinum, steel,
energy and related industries in the country, which will allow for efficiency gains in the production and use of green hydrogen. For domestic
use, the government plans to launch a hydrogen corridor, which will involve heavy-duty fuel cells for the country’s air, freight and rail network
as well as trucks. However, we highlight several key downside risks, such as regulatory delays as well as political tensions that might deter
more risk-averse investors.
MOROCCO AND EGYPT TO PROGRESS IN TANDEM
Both countries are well-positioned to export green hydrogen to proximal demand markets, such as Europe. Egypt’s and Morocco’s
non-hydropower renewables sectors will continue to attract significant investment through to 2030, with vast untapped solar and
wind power potentials proving attractive to investors. Egypt outperforms Morocco due to a comparatively higher green hydrogen rewards
profile underpinned by a strong demand outlook, despite greater project and legal risks. Rising competitiveness and falling equipment
costs have made solar and wind power Egypt’s cheapest source of electricity. This will contribute greatly towards the country becoming a
regional electricity and green hydrogen export hub.
ANGOLA AND NIGERIA
In both countries, the development of non-hydropower renewables capacity has been limited due to continued project delays and
regulatory hurdles. Investors are wary of burdensome legal risks and foreign currency repatriation risks, particularly given the long-term
and capital-intensive requirements of green energy investments. Nigeria is mostly likely to rise in the rankings by 2030 as future demand
variables are the key factors feeding into the Hydrogen Suitability Index score for Nigeria. Among these indicators are Nigeria leading the
region in road freight capacity and dry natural gas consumption, while being second in the SSA region (behind only SA) in terms of crude
steel production. However, the most prominent factor is Nigeria having the largest gas-fired power generation capacity in SSA, which
points to the potential for blending hydrogen with the gas to reduce emissions from the power sector going forward.
BARRIERS TO PRODUCTION
There are numerous challenges preventing SSA markets from developing industrial-scale hydrogen production operations, broadly
stemming from the pervasive lack of economic, political and electricity security across most markets. We highlight three key aspects
limiting the region’s capacity to develop its hydrogen production sector at present namely: inadequate renewables electricity supply
and constraints in access to freshwater; lack of existing related utilities and transport infrastructure and human capital; and sluggish
renewables uptake preventing the build-out of green hydrogen industry. Given the high costs of storing and transporting hydrogen,
Egypt and Morocco’s proximity to European markets hold strong export potential in the future.
TRANSPORT LOGISTICS
The low-volumetric energy density of hydrogen (in both compressed gas and liquid forms) makes the storage of hydrogen challenging. This
limitation is felt most strongly in onboard storage, but it is also a risk in the delivery and distribution of hydrogen. Several chemical, solid
state and other approaches (that could lead to higher stored energy density) can be used in countries to manage the use and, primarily,
transportation of hydrogen from point of production to point of use through pipelines, roads and shipping networks.
EXPERTISE NEEDED
Growth in the hydrogen and fuel cell industries will lead to vast new demand for workers in these sectors. Many of these jobs do not currently
exist and do not have occupational titles defined in official classifications. They require different skills and education than current jobs, and
training requirements must be assessed so that this rapidly growing part of the economy has a sufficient supply of trained and qualified
workers. The most critical skills needed to drive the production of green hydrogen are likely to be those from technical workers. Labour needs
will span three core areas that are:
• Research and development, engineering and manufacturing
• Operations and management
• Training, communications and outreach
SA, Egypt and Morocco have strong levels of skills availability by regional standards, particularly for mid-entry level roles, but will likely
need to import workers for more specialised roles. In this way, businesses need to be mindful of the barriers to importing foreign workers and
the added complications in obtaining the necessary travel and work permit documents considering changing restrictions related to Covid-19.
POLICY RISK AREAS
When it comes to local use of hydrogen, we believe that African countries including its largest economies will face numerous challenges in
producing, storing and trading green hydrogen. From a policy perspective, according to the International Renewable Energy Agency (IRENA),
countries need certain key pillars for clean hydrogen development:
• A cohesive national or regional strategy (as seen in the EU, Japan and Australia). Countries also must develop robust industrial policies
across the value chain, particularly for heavy industries and boost PPPs especially in renewable energy development.
• Adequate research and development programmes and plans to boost expertise. In Africa’s case, this will also likely require the import of
foreign workers, particularly in the initial stages.
• For hydrogen trade to occur successfully, coherent regulations are necessary in both the clean hydrogen origin and destination countries,
and policy areas need to be clear and consistent. Additional incentives will be needed to entice various stakeholders to commit to longerterm
purchase agreements of green hydrogen.
• Because the molecules of hydrogen are identical, regardless of the method of production, a certification system, or guarantee of origin,
is needed for end-users to know the sustainable nature of the hydrogen production process for each delivery. Several countries have
already initiated certification schemes, such as the EU’s CertifHy and Australia’s Hydrogen Certification Scheme; however, for international
trade it is vital to ensure that these standards are compatible with domestic processes.
30
31

WATER
MINE WATER TREATMENT TECHNOLOGY
Features:
Upgrade of water to potable
/drinkable standards
Clarification & Disinfection
Filtration
Wastewater treatment
Recovery of precious metals
and minerals
WHAT’S YOURS IS MINE
Mine water recycling and reuse
With the current economic climate, mining is under severe pressure from a financial
front and the existing and long-standing difficulties being faced with water shortages in
the country.
BY SAGISA PROCESS ENGINEERING
tel +27 11 787 0355 email sagisa@sagisa.com
web www.sagisa.com
TIMELESS
Natural clay bricks and pavers
add character and impressive
sustainability credentials to your
project. The enduring hues and
textures are low maintenance
and look beautiful for a lifetime.
THE VOICE OF THE CLAY BRICK INDUSTRY
Wastewater produced through mining can come from
many sources, including precipitation, hydrometallurgical
processes, or acid mine drainage (AMD). AMD is created when
sulphide minerals are exposed to air and water, producing sulphuric
acid. All these wastewaters typically contain heavy metals.
Mine wastewater is collected and left untreated. Regulation requires
efficient treatment of these wastewaters to reduce the risk of harm to the
environment. Sagisa has been working on processes to develop water
reuse applications to alleviate the demand on natural water sources
without adding additional chemical waste being created by the process.
ULTRAFILTRATION
Ultrafiltration is a pressure-driven purification process that separates
particulate matter from soluble compounds using ultrafine membrane
media. Ultrafiltration is an excellent separation technology for wastewater
reclamation.
Ultrafiltration modules feature an outside-in configuration for higher
solids loading. The PVDF membrane material and very narrow pore size
distribution makes the modules a perfect choice for wastewater treatment
and offers high removal of suspended solids, bacteria, viruses and organics.
A typical example of such application can be found at a platinum
mine. The client’s requirement was to reuse water from underground
mining works to reduce intake from the local river. A process was
develop using ultrafiltration membranes in combination with natural
processes.
Mining water is returned to the surface and pumped into a natural
pond to allow settling before flowing though several reedbed ponds for
natural clarification. Water is then processed further with ultrafiltration
membranes to remove all particles larger than 0.03um, including bacteria.
The water was treated to the point where it could be used on the plant
as drinking water for the plant. Another big win with this process was the
increased life of gland seals in the process by using ultrafiltration treated
water, which is well below the required gland seal water requirement.
The total water intake at the platinum mine was greatly reduced resulting
in operational cost savings and a lower impact to the environment.
By optimising the process and evaluating the application correctly,
mines can achieve a close to zero effluent.
Sagisa Process Engineering is focused on advanced separation
technologies for wastewater treatment, to maximize the world’s reusable
water by recovering water, energy, nutrients, and other valuable
components of wastewater streams.
33

WATER
WATER
NOT ALL DROUGHTS
ARE THE SAME
Here’s what’s different about them
There’s growing concern in South Africa about what’s being portrayed as “a national
drought disaster”. There have been anxious suggestions that drought could see many
cities and towns facing their “Day Zero”. This happened during the water crisis in Cape
Town as fears mounted that the taps would run dry.
Courtesy: The Conversation
There is limited recognition of the different types of droughts and
how they affect different sectors of society. For example, dry
periods can devastate agriculture without necessarily affecting
water supplies to cities and industries. Plants in fields and livestock
grazing on natural pasture depend on moisture in the top layers of the
soil. Cities and towns either have large reserves of water in dams or tap
it from aquifers, which are effectively underground reservoirs.
It would be wrong to suggest that there are no drought problems in the
country at present. Parts of the country are officially in drought conditions.
This means that officials acknowledge that the prolonged dry conditions
are now seriously threatening farming activities. And many farmers are
battling to stay in business.
But across South Africa’s 1.2-million sq kilometres, there are also areas
where rainfall has been well below average for a year or more.
Human action has
substantially changed the way
that the water cycle works.
WEATHER PATTERNS
The South African Weather Service produces rainfall maps, which show
this variation. The map for the 2015–2016 season shows a mixture of very
dry and very wet areas, sometimes quite close to each other.
The 2018-2019 season showed a different pattern with the western
half of the country much drier than the eastern, and parts of the Northern
Cape receiving less than 25% of their average rainfall.
Climate scientists, hydrologists and disaster management specialists
have traditionally distinguished between three different kinds of droughts:
• A meteorological drought occurs when rainfall is less than average
over a significant period, often a month.
• An agricultural drought is taking place when a lack of rainfall leads to
a decline in soil moisture affecting pastures and rain-fed crops. A good
way to visualise an agricultural drought is to show rainfall records and
vegetation conditions on maps.
• A hydrological drought occurs when a meteorological drought
significantly reduces the availability of water resources in rivers,
lakes and underground. Currently, except in a few places (Northern,
Eastern and Western Cape and pockets of Limpopo) there is not yet a
hydrological drought in South Africa.
So, the immediate drought problems that need to addressed are those
affecting the country’s farmers. Domestic water supply is problematic, only
a few of these are due to drought and most are due to mismanagement
and poor planning.
RESPONSES
A meteorological drought is usually simply an alert to warn farmers and
water managers that they need to be ready to act in case it continues.
Responses to an agricultural drought depend on the kind of farming
that is undertaken. Livestock farmers are advised either to reduce their
herds or buy additional feed, to compensate for lost grazing. Dry land crop
farmers may delay planting or, if they are brave, space their crops more
widely to give each plant a better chance of getting enough water. They
may also take out insurance against crop failure due to drought.
Drought research should no
longer view water availability
as a solely natural, climate-imposed
phenomenon.
When a hydrological drought occurs, water managers responsible for
supplying towns and cities need to implement previously prepared plans
to restrict water use as storage levels decline, since this determines how
much water can continue to be reliably be supplied.
GOING FORWARD
A group of international academics think that we should change the
way we think about droughts. They point out that human action has
substantially changed the way that the water cycle works by damming
and diverting rivers and pumping water from underground. They argue:
We need to acknowledge that human influence is as integral to drought
as natural climate variability. For the scientists this means that they must
change the way they look at drought: Drought research should no longer
view water availability as a solely natural, climate-imposed phenomenon
and water use as a purely socio-economic phenomenon, and instead
more carefully consider the multiple interactions between both.
From this perspective, Cape Town’s “Day Zero” would fall into a new
category: a “human induced drought”. And, if the citizens of Gauteng don’t
heed the warning to reduce water use to what can be provided by the
Integrated Vaal River System over the next five or six years, they should not
be surprised if they too suffer a human induced drought.
The World Water Council has put it succinctly: The crisis is not about
having too little water to satisfy our needs. It is a crisis of managing water
so badly that billions of people – and the environment – suffer.
(Source: Rand Water)
In South Africa, water consumption has been recorded as:
235 litres or water per person per day. This is 60 litres per day
more than what we should be consuming.
Day Zero is close. Water is a limited resource. Conserve it.
BY MIKE MULLER*
34
* Mike Muller has received funding from the Water Research Commission and the African Development Bank for research and advisory work related to the subject matter of this article. He also advises a variety of
organisations on water related matters including national, provincial and local government, and business organisations including BUSA, AgriSA and SAICA.
35

CIRCULARITY
THA 29-2021
Energy efficiency in practice works
ENERGY SAVINGS
Defy Appliances (Pty) Ltd
Defy Appliances Jacobs, Durban Plant was established in 1932. Currently, the
Defy Jacobs factory manufactures 2 500+- units per day, including free-standing
stoves, built-in ovens etc.
Before joining the Industrial Energy Efficiency (IEE) Programme, Defy realised
that a lot of energy was wasted through leaks in the compressed air system – a
significant energy user – and that more compressors had to be run. The higher
artificial demand also attributed to the lower pressure at point of use.
After attending the energy management system (EnMS) expert-level course, an
EnMS plan was tailored to the plant’s requirements.
Through the IEE Project Defy implemented interventions that included replacing
the compressor, installing metering for compressors and shut-off valves in
production areas, repairing leaks, and upgrading vacuum generators.
Future plans for the company included ISO 50 001 certification. To ensure sustained
energy savings Defy implemented awareness raising programmes, which will
form a big part of achieving its goal of reducing energy by 4% per annum.
To participate in the IEE Project or access some of the free online tools, contact ncpc@csir.co.za
Download the full case study, and others, at www.ncpc.co.za / www.ieeproject.co.za.
South African Industrial
Energy Efficiency Project
AEE Energy Project
of the Year 2020
2%
Overall electricity
bill saved
758 663 kWh
Energy saved
ZAR 811 769
Money saved
790.91 tCO2e
GHG mitigated
ZAR 2 292 700
Investment made
3 Years
Payback period
Making the
circular economy
a reality
On average, South Africans dispose of enough
municipal solid waste to fill an entire football
field 10 metres deep each day, which equates
to 54.2-million tons of waste per year.
BY NCPC-SA
Implementors of Mpumalanga Industrial Symbiosis Programme, Sandile Khumalo (NCPC-SA) and Nomusa Madonsela (DEDT).
The National Cleaner Production South Africa (NCPC-SA) and
the Mpumalanga Department of Economic Development and
Tourism (DEDT) have partnered to tackle this challenge with
the establishment of the Industrial Symbiosis Programme (ISP), an
innovative reuse and recycling solution.
Since the launch of the programme in Mpumalanga (2018), 92 128 tons
of waste from landfill has been diverted. This translates to a reduction of
almost 837 946 tons of greenhouse gas emissions to date.
To achieve this, the Mpumalanga ISP (MISP) hosts matchmaking
workshops for companies and SMMEs teaching them how waste can
be turned into a reusable resource by entering into mutually-beneficial
collaborative agreements.
“So far, MISP has trained about 46 facilitators on implementing industrial
symbiosis and identifying symbiosis opportunities,” says Sandile Khumalo,
who is responsible for MISP, from NCPC-SA.
“Four business opportunity workshops have been delivered in the
province to identify company matches for business opportunities from
waste generated by companies and from the workshops there has been
attendance from a total of 245 attendees who found it important to
attend and to declare their waste needs. The programme has been able
to divert the 92 128 tons after having completed 33 synergies to date.
This from having completed 33 synergies to date.”
According to Khumalo, these figures prove that industrial symbiosis
contributes directly to the province’s efforts to minimise its environmental
footprint and mitigate the effects of climate change.
MISP together with DEDT and its stakeholders have agreed to
prioritise the promotion and creation of green enterprises with the aim
of beneficiating and creating markets for waste in Mpumalanga for its
people, thus ensuring growth in the province’s waste economy.
The programme has been able
to divert approximately 92 128 tons
of waste from the landfill.
For interested companies and SMMEs who would like to know more
about the Mpumalanga ISP and how they can take part, please visit the
NCPC-SA website or email SKhumalo@csir.co.za for more information.
39

WATER
FOOD SERVICE FILTRATION
DEPENDABLE & EFFICIENT WATER FILTRATION
Cleaner, better tasting water by reducing
common contaminants
Improve beverage security and quality
via protection of Carbonation CO₂
Reduced scale build-up, providing an
efficient operation whilst providing great
tasting and looking beverages
tel +27 11 787 0355 email sagisa@sagisa.com
web www.sagisa.com
THE WORTH OF WATER
Water is the most important commodity in the foodservice industry, which relies on the
provision of clean and fresh water for its daily business. Water filtration and treatment
systems used in restaurant applications have become a necessity.
BY SAGISA PROCESS ENGINEERING
The main benefits of implementing water filtration systems for
restaurants are equipment protection, improved quality, taste,
and safety for prepared food products.
Additionally, use of water filtration systems also help in reducing the
hazardous impacts of using plastic bottled water, aiding in the reduction
of the carbon footprint and pollution.
Controlling water quality is vital to a store’s brand identity and
customer loyalty. One may consider incoming water to be fixed, stable
and unchanging, but quality varies widely from region to region and even
street to street.
High levels of dissolved minerals, the use of disinfectants and the
presence of tiny solid particles – or even residual bacteria – may result
in unpleasant taste. And, untreated water may cause scaling on internal
parts, corrosion on metal surfaces, and degrade rubber components
within foodservice machinery. Therefore, having consistent good water
quality is essential in the maintenance of restaurant equipment.
The 3M range of foodservice filtration equipment not only removes
these harmful contaminants, but also by design, realises higher energy
efficiencies from pumps and temperature management systems.
Altum Energy works with property owners across the country to model
their energy needs and facilitate projects, and in most cases the economics is
advantageous, with high rates of return and payback periods as short as 3 years.
Altum Energy is associated with range of preferred suppliers, offering
best-of-breed technologies at ultra-competitive rates.
These systems are designed
to meet the volume, water clarity
and maintenance expectations
of restaurant owners.
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Customer experience is of utmost importance in the restaurant
business. Unhappy customers and unreliable machinery can only lead in
one direction: a negative effect on business. Here are a few examples of
how poor water quality can directly affect business:
• Machines break down more frequently, or work sporadically and may
not be available when they should be generating income and lead to
an overall higher cost of ownership
• Brand reputation may become tarnished. Customers will either leave
or complain if they are unsatisfied with beverage, and even steamed
food, quality
• Unreliable working conditions, regular disruption from service
engineers and handling customer complaints may affect the morale
of staff.
Ultimately this all links back to an increase in running costs for the
business and therefore reduced profits.
Plastic is everywhere. Most of us correlate plastic contamination to
the destruction of our environment. Only a small percentage of plastic is
recycled, but the problem continues to expand into the realm of human
health. Studies confirm the presence of microplastics in bottled water. The
use of plastic bottled water is not just a hazard to public health due to
release of harmful chemicals such as BPA (Bisphenol A) present in plastics
but also an environmental hazard posing severe threat to the ocean and
marine life.
3M Water Filtration Products are simple, effective, and easy-to-install
solutions for commercial foodservice applications. These systems are
designed to meet the volume, water clarity and maintenance expectations
of restaurant owners, fast food chains and convenience store operators,
supermarkets, cafeterias and institutions.
For cold, brewed, ice and specialty beverages, or steamer, combi
oven and other foodservice applications, there’s a 3M solution that’s
ideal for you.
At Sagisa, in partnership with 3M, we are committed to providing your
business with water filters that are as dependable as they are efficient and
flexible. Most of our solutions are also zero water wastage.
REFERENCES
1
2
3
4
5
41

VALUE CHAINS
VALUE CHAINS
Figure 1. More than 75% of the world’s global manufacturing output has been directly impacted by the pandemic. The colour purple in the graph
denotes Covid-19 hard-hit countries. (Sources: The World Bank, Kearney Analysis)
BUILDING RESILIENCE
IN MANUFACTURING
AND SUPPLY CHAINS
Thirdly, the nature of trade between countries, in which the
international flow of goods as a percentage of global GDP has steadily
increased during the past 50 years, is now highly interdependent. The
level of disruption has been amplified, and recovery will take longer. The
scale, complexity, and urgency of the situation means that no single body
can tackle it in isolation. If industries are to ensure business continuity,
protect employees, and shore up supply systems for the future, they will
need to find new approaches, share knowledge, and work together like
never before.
Recognising this, in collaboration with the World Economic Forum
Kearney surveyed more than 400 senior operations and supply chain
C-suite executives to codify the current economic impact on value chains,
share perspectives on the immediate response to the crisis, and identify
the strategies that will be needed to prosper post-Covid-19.
The analysis confirms the level of disruption that has overwhelmed
supply chain operations: more than 80% of respondents indicated that
Covid has significantly disrupted their own setup, with small businesses
the hardest hit (Figure 2).
Covid-19 is severely disrupting manufacturing value chains, with grave consequences
for the global economy. The pandemic has surfaced significant questions about near- to
medium-term supply chain resilience.
BY KEARNEY CONSULTING
While traditionally global value chains have been designed
around optimising for cost-competitiveness, Covid-19
further underlines the need for companies to orient the
design toward “risk-competitiveness”. Certainly, global supply chains
have been knocked – and recovered – before, for example from the
disruptions associated with past crises such as the 2003 outbreak of
SARS, the 2008 financial crisis, or the 2011 Fukushima nuclear disaster.
But this time, as it became apparent very quickly, is different.
First, the emergency is a global one. Unlike SARS, Covid-19 spread to all
continents and more than 180 countries in the space of only a few months,
too quickly for effective mitigating or remedial action. As such, it created
a global demand shock.
Secondly, previous crises have typically been concentrated in particular
geographies or targeted specific sectors, but Covid-19 affected all major
economies. Six of the top 10 world economies in terms of manufacturing
value add are also among the hardest hit by the disease (Figure 1).
Figure 2: Covid-19 has significantly disrupted supply chain operations. Purple denotes Covid-19 hard-hit countries. (Source: Kearney Covid-19
survey as of 10 April).
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Customer support programs
When asked to score how much the virus was disrupting their sources of
demand, for example changes in key markets or consumer behaviour, and
then their supply network, including suppliers and manufacturing centres,
respondents gave an average result of 7 out of 10 (Figure 3).
Three stages of activity will be needed to help supply chains back onto
a more secure, durable footing.
Employee protection
Figure 3. Supply chains have only
moderately adapted to the crisis,
with automotive facing the biggest
challenges. Larger companies’
supply chains adapted better,
especially companies with revenues
greater than US$50-billion.
1. React: immediate actions to ensure business continuity
Taking care of employees was the number one priority for respondents,
and a few active measures to protect both physical wellbeing and mental
health have been put in place, such as the use of personal protective
equipment (PPE), restrictions on employee contact in the workplace,
switching employees to working from home, and travel restrictions
(Figure 4). None of the 300+ respondents said they hadn’t taken any steps
to protect employees.
Companies are also supporting suppliers, customers, and society at
large. Suppliers have been given a helping hand in various ways, from
advances or premium payments to guaranteed purchase promises. Many
firms have repurposed their production lines to produce masks, ventilators,
and other much-needed goods; turned to new types of transportation; or
prioritised orders for vulnerable customers.
Figure 5: Leading companies are taking action to mitigate impact on
customers. Nine out of 369 surveyed companies had not taken any
action to support customers.
One area that could improve significantly however is adapting delivery methods to ensure minimal human contact: only 40% of respondents had put
these measures in place (Figures 5 and 6).
“We see many companies sharing intellectual property – for example, 3D/CAD design files – to allow other companies to also produce ‘their’
products to ensure sufficient supply of high-demand goods.” - Chief commercial officer, technology company
Source: Kearney, COVID-19 survey (as of April 10)
Figure 4: Companies are actively taking measures to protect
employee wellbeing.
Figure 6: Companies supporting society to fight Covid-19.
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2. Recover: strategic longer-term initiatives to increase resilience
Current supply chain configurations are seen as ineffective. Fortyseven
percent of executives surveyed indicated a need to overhaul
manufacturing and supply network to increase future resilience. Supply
chains are too long, too complicated, and too often exposed to tier-2
and tier-3 supplier vulnerabilities in a single source supply. Each of these
factors adds risk, especially in a crisis. Businesses are starting to shift their
focus away from cost and toward being risk-competitive instead.
To make their supply chains more effective in the medium term,
businesses are looking to reduce complexity, increase their use of local
suppliers and manufacturing capacities, and diversify their supply base to
protect supply (Figure 7).
Business leaders also noted the role that advanced technologies
such as artificial intelligence, data analytics, 3D imaging, and additive
manufacturing played as a crucial way of arming themselves to face the
future and adapt to potential disruptions in supply and demand. This
presents a huge opportunity, as the companies who are already making
most use of high-tech tools are demonstrably able to adapt their supply
chains in the face of Covid-19 better than those that don’t.
“Technology and digitalisation enable end-to-end visibility across
the supply chain. Having this visibility – ideally in real time – is key
to proactively run risk analyses and react fast when a crisis hits. We
are currently accelerating multiple initiatives in this area.” - Head of
procurement, healthcare company
Key consideration for future operating models
Key changes to supply chain setup
Figure 8: Upskilling people
and having a consistent riskmanagement
system in place are
key to ensure higher resilience.
Changes to the operating
model must cover all four
dimensions to ensure smooth
implementations. Covid has
changed our ways of working,
which makes changes to the
operating model inevitable.
Figure 7: Dual sourcing, reduced
complexity and localising are the
three key changes that executives
are evaluating. The three levers are
highly interdependent (for example,
dual sourcing often implies
increased complexity). Safety stocks
and resources in supply chain
departments will be rammed up.
Unsurprisingly, the ability to adapt to changing demand and manage risk better are two of the top priorities for businesses coming out of Covid-
19, especially in areas with highly complex supply chains, such as industrials, healthcare, and automotive (Figure 8). As for future operating models,
remote working is here to stay, with an average of 20% of businesses across sectors considering permanent work-from-home solutions. A shift toward
decentralisation is expected, enabling organisations to be more flexible and make decisions quickly.
Because we’re better together.
Relationships will also change. Many companies supported their
suppliers throughout the pandemic, deepening the bonds between them.
These vital connections are perceived as an important way to secure
supply during turbulent times. New collaboration models are also on the
table. Within and across industries, organisations have come together to
share practices, come up with new solutions, and keep elements of the
economy moving. Not every business will survive, and like other periods
of financial difficultly, consolidation may follow.
3. Reinvent: key imperatives to adapt to potential “forever” changes
With widespread disruption already present due to emerging technologies,
climate change, and geopolitical tensions, it’s clear that the pandemic is
acting as an accelerator. Businesses will need to consider five key imperatives
if they’re to succeed in the long term:
1. Be rapid response ready. The crisis has forced a change in consumer
preferences by removing most in-person contact. Existing trends
toward personalisation and sustainable shopping mean it’s likely
that manufacturing and supply systems will need to be able to
adapt to further changes in behaviour. Becoming more sensitive to
demand through increased use of technology and data analytics will
be crucial.
2. Adopt high-tech habits. Companies best placed to adapt during
the crisis were those that were able to make use of advanced
technologies. This will only take on more importance as further
developments emerge. For example, additive manufacturing makes
it possible for goods to be produced directly in the setting where
they’re most needed, while automation and advanced robotics
are increasing production flexibility and making it easier to switch
products across manufacturing locations. All of this points to a
shift toward distribution and manufacturing, rather than the other
way around.
3. Think global, act global. At the height of the crisis, some supply
shortages were caused by lack of capacity. By coordinating logistics
within and across global value chains and using new technologies
to enable much better visibility across the entire ecosystem, similar
headaches could be avoided. Connecting other applications such as
blockchain and IoT sensors together could also speed things up, for
example by reducing customs clearance time.
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Figure 9: New imperatives will emerge from Covid-19, posing significant challenges and opportunities for businesses.
Companies best placed to adapt during the crisis were those
that were able to make use of advanced technologies.
READ REPORT
4. Free tasks from day-to-day operations. Although home working
has been adopted at breakneck speed out of necessity in many
organisations, the shift needed to make it a success is as much
psychological as it is physical. While executives reported a certain
level of cultural resistance to remote working, becoming equipped
to cope with potential future disruption, like successive waves
of Covid-19 or outbreaks of other infectious disease, is of vital
importance. Virtual and augmented reality could provide the means
to enable key tasks or carry out employee training from outside
the factory.
5. Take the united approach. Fighting Covid-19 has driven new levels
of collaboration, for example speeding up the delivery of medical
and essential supplies and getting temporary clinics and hospital
THOUGHT [ECO]NOMY
greeneconomy/report recycle
facilities set up to operate in record time. This experience could be
used and adapted as we attempt to tackle other challenges such as
climate change. While this has been a global crisis, it is not a crisis
of globalisation. By working together, stakeholders can influence
the changes and take the actions needed to bring about the bestpossible
solution to navigate the new global scenario (Figure 9).
If the pandemic has taught us anything, it’s that when we are truly
put to the test, we are capable of astonishing achievements. Hospitals
can be built in a few days. Entire operating models can change. And
collectively, we can do what matters most. By continuing to collaborate,
a manufacturing and supply system can be built that’s more robust than
ever. Because we’re better together.
HOW TO REBOUND STRONGER
FROM COVID-19 | Resilience in
manufacturing and supply systems
| White paper produced by Kearney
Consulting and the World Economic
Forum [April 2020]
Article courtesy: kearney.com
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