Closing Africa’s infrastructure gap is a top priority in order to put the continent on a path for double digit growth and sustainable development, according to world- renowned professor of economics Prof Jeffrey Sachs.
“There is no choice. Africa needs 10% per year of economic growth in the next 15 years,” said Sachs. The only way to achieve this was to focus on large-scale investments in trans-national infrastructure projects in power, roads, broadband, and other core regional infrastructure needs.
The professor was speaking the sidelines of the Third Financing for Development Conference in Addis Ababa, Ethiopia, on 13 July. The event had the theme “Unlocking public and private capital for African infrastructure” and was organised by the New Partnership for Africa’s Development (Nepad) Agency and Sustainable Development Solutions Network (SDSN).
The conference ends on 16 July. It is organised under the auspices of the UN’s Financing for Development office.
Thousands of delegates have gathered to set the new financing architecture for a new global partnership. Its outcomes will also address the issue of means of implementation, referring to the “how” the goals set out in the post-2015 development agenda can be achieved.
Support for Nepad goals
Sachs is the director of the SDSN and special adviser to UN secretary-general Ban Ki-moon on the Millennium Development Goals. For Africa to realise the 2030 timeframe, he urged the global community to rally around the Nepad agenda, as the continent’s strategy for implementing cross-border infrastructure projects. “We need to help support Nepad achieve its goals,” he said.
The Nepad Agency has identified Africa’s most important infrastructure needs within the context of the Programme for Infrastructure Development in Africa (Pida), which provides the framework to implement 51 priority programmes and projects in the sectors of energy, transport, broadband and trans-boundary water.
Chief executive of the Nepad Agency Dr Ibrahim Mayaki said Africa’s challenge was not a lack of resources, but a lack of bankable projects. “We need to invest in the capacity to invest.” It was about proposing structured projects, he said.
Mayaki spoke about the complementary instruments that had been developed to build the necessary capacity for early-stage project preparation and the Africa50 Fund to finance the implementation of Pida and other regional infrastructure projects.
He also underscored the important role of regional economic communities in providing the enabling environment for project implementation, through harmonised policies and regulatory frameworks.
Regarding how to crowd in investment, Sachs encouraged African economies to forge partnerships with East Asia, tap into capital markets and strengthen continental bodies such as the Nepad Agency and African Development Bank.
The Nobel laureate for economics and professor at Columbia University, Prof Joseph Stiglitz, noted that financial markets had “failed to translate pools of savings into productive investment”. There was a need to better match these large-scale resources with the financing priorities of developing countries. “The world has the resources with which to do this. Allocating more of these resources to inclusive development would be good for the global economy.”
The best way for Africa to achieve its infrastructure goals was to tap into a Global Infrastructure Investment Platform (Giip), Stiglitz said. The objective of Giip was to put forward an ambitious proposal that would allow long-term investors to ramp up their infrastructure asset holdings, with an allocation target of up to 10% of assets under management over a 15-year horizon.
The Nepad Agency, SDSN, UN Conference on Trade and Development and Washington think tank Brookings Institution agreed to set up a working group that will move Africa’s regional infrastructure financing agenda forward.
HEADS of state of the Brics countries will gather in Ufa, Russia, this week for the grouping’s seventh summit, which comes at a particularly challenging time for Russian diplomacy. Precipitated by the conflict in Ukraine, Russia is barred from Group of Seven/Group of Eight processes and increasingly estranged from the West.
It intends to use the Brics summit to project itself as a major global power.
By holding the summit at the same time as the annual meeting of the Shanghai Co-operation Organisation (SCO), Russia is attempting to impress its Central Asian neighbours and highlight its growing strategic co-operation with China, co-organiser of the SCO. This also sends a message to the West that Russia has other platforms on which to challenge for global power. Russia’s agenda preferences can be conceived along two axes: global security and politics; and economics.
Brics national security advisers are meeting regularly, discussing a range of international issues such as the rapidly evolving situation in the Middle East. To the extent that the Brics can agree on co-ordinated positions on such difficult issues, this will presumably build the group’s coherence over time.
Offsetting this potential is their disagreement on how to reform the United Nations Security Council — a key gap since it is at the apex of the global security architecture. Accordingly, Russia emphasises economic co-operation.
Discussions at the Ufa summit are broadly divided into two parts: the financial co-operation package and the evolving Strategy for Brics Economic Partnership.
The strategy is too general and vague and unlikely to grow in substance at Ufa. Perhaps, for this reason, the Russians are pushing for a move beyond a strategy “on paper”, to identify concrete trade and investment projects up to 2020.
Nonetheless, three top priorities appear to have been identified in the Brics economic strategy discussions.
FIRST is co-ordination on e-commerce, and Russia proposed the establishment of a working group. This was apparently downgraded to a limited agreement to convene a dialogue leading, possibly, to the establishment of a working group.
More cynical observers of the Brics believe Russia wants to use this discussion to market a cellphone operating system they have developed.
Second are ongoing discussions about trade facilitation. These centre on the creation of a virtual working group on trade and export promotion agencies. There have also been discussions about establishing a single window for electronic processes connected to trade.
Third, China has proposed closer collaboration on intellectual property rights regimes. Observers are understandably sceptical of the prospects and co-ordination possibilities, since the focal points in each country are not obvious. But agreement has ostensibly been reached to exchange information on member states’ systems.
At Ufa, there will be much discussion of the two signature Brics achievements to date: the Contingency Reserve Arrangement and the New Development Bank.
Given the closed nature of Brics processes, it is difficult to discern SA’s positions on the grouping’s economic agenda but some contours are apparent.
SA seems to regard the economic partnership strategy as being weak and less of a roadmap of how to get things done than a “ticking the check box” exercise for Russia to notch up some “success”.
For SA it is not clear how the strategy will promote more value-added exports and attract investment in minerals beneficiation or processing at source. The draft trade ministers joint communiqué is seemingly noncommittal and soft.
SA has some challenges with agreeing to create a single window for trade facilitation. It has to navigate through legal arrangements within the Southern African Customs Union, especially on external agreements SA has with third parties that may see the free movement of goods in the common customs area.
Although the government supports India’s proposed business travel card, modelled on the Schengen visa arrangement, SA views it as unfair that its liberalised visa arrangement for the Brics countries has not yet been reciprocated.
SEVERAL working groups have been set up under the auspices of the Brics Business Council: for manufacturing, ICT, small business and finance. The president of the South African delegation to the council, Brian Molefe, proposed new working groups for deregulation and agribusiness.
South African business is interested in common issues affecting Brics trade and investment and specific issues pertaining to particular companies and industries — such as pharmaceuticals — for which they want to identify important platforms for joint technology development.
They support the trade facilitation agenda in principle, but want progress in promoting transparency in the financial incentives each country makes available to its companies, and progress in approvals for businesses from other Brics countries.
They want to promote “fair” trade. The concern is that SA has the lowest average import tariffs of all Brics countries, but implements the fewest nontariff barriers.
South African business representatives to the Brics Business Council are concerned about how the government is managing the Brics process.
It is regarded as too bureaucratic and there is a strong feeling that the government is not prepared to tackle the real issues, such as “fair” trade.
There are problems within the council. Brazil has not been driving the process, and Russia and China are represented primarily by state-owned enterprises — unlike India, Brazil and SA — with the interests of the private and state sectors not being sufficiently aligned.
The Brics process seems to be of limited use to South African business.
Promoters of the Contingency Reserve Arrangement argue that it will provide “insurance” to SA in the event of investment status downgrades by the ratings agencies, and an ensuing capital flight — an increasingly likely proposition. SA could tap these resources during balance of payments crises, enabling the government to cover calls on forex reserves.
However, the Contingency Reserve Arrangement is not capable of providing more than an initial first line of support. The amount SA could call from it is capped at $6.5bn — 130% of its contribution of $5bn — a small fraction of the daily turnover in South African currency markets.
Clearly, a lot more money would be required to prevent a run on the rand, assuming the South African Reserve Bank wishes to intervene to prevent a slide in the currency, which it does not. In the extremely unlikely event that such funding was to be sought, it would come from the International Monetary Fund (IMF). The Contingency Reserve Arrangement rules explicitly provide for this. The idea put forward by some Brics promoters, that the Contingency Reserve Arrangement will enable the Brics countries to avoid IMF conditionalities, therefore holds no water.
SOUTH African officials have indicated they will seek to revive African infrastructure development as an important issue for the Ufa communiqué. They are of the view that this lost momentum during the 2014 Brics summit. There is much speculation about the New Development Bank’s Africa Regional Centre, whose agreed establishment is regarded as a diplomatic victory for SA.
The government is still working on the Africa Regional Centre’s articles of association. There seems to be agreement it will be located in Johannesburg. It could, in effect, be a “mini New Development Bank”, targeted at African markets, but it is not clear how it will relate to the New Development Bank’s head office in Shanghai, and what autonomy it will enjoy.
The Brics Business Council has expressed an interest in playing an advisory role in the New Development Bank, as it wants more say in project selection and the disbursement of funds. But there is no clarity on the interest rates that will be charged; how small and medium enterprises will be treated; the methodology to be applied in selecting projects; and how considerations such as sustainability will be integrated into project design and selection.
Further complicating matters, the government recently decided to join the Asia Infrastructure Investment Bank, which will be heavily focused on infrastructure projects in Asia. It is not clear what the strategic value of this move is — apart from earning kudos from China. But it could erode the effectiveness of the New Development Bank and the Africa Regional Centre.
The Brics agenda for Ufa is ambitious. It is important SA identifies its clear interests and thinks carefully about its allocation of resources vis-à-vis potential returns.
The Green Building Council of South Africa (GBCSA) has enjoyed massive growth greening in the commercial property sector in which it has reached a significant milestone with 100 Green Star SA certifications.
GBCSA on Wednesday celebrated the commitment shown by the commercial property sector and that the green building movement has gained significant momentum with the achievement of 100 Green Star SA certifications.
In 2009 the country’s first green certification was awarded by the GBCSA. In April 2014 the country celebrated 50 Green Star SA ratings and, only a year later, this had doubled to one hundred, with 25 certifications awarded in the first quarter of 2015 alone.
Established in 2007, the Green Building Council of South Africa (GBCSA) has pioneered transformation of the South African property sector by promoting and facilitating environmentally sustainable building practises, from the design phase to construction and operation.
At a media presentation Brian Wilkinson, CEO of the GBCSA, said Achieving 100 certifications indicates the commercial property sector’s commitment to sustainability and resource efficiency in response to growing cities and related challenges to energy infrastructure.”
This clear signal of the move towards green building is particularly significant as buildings are responsible for around 40% of the world’s end-use energy consumption through their on-going operation, buildings are amongst the main contributors to climate change.
“There are multiple incentives involved in green building initiatives”, says Wilkinson, “Ultimately the upward trend in the number of buildings being certified and those applying for certification illustrates that awareness and perceptions around environmental issues have changed and evolved. Energy efficiency and the financial rewards notwithstanding, green building is the right thing to do.”
There are over 1.8 million square metres of green certified space covered by the 100 Green Star SA certification – or the equivalent of 263 rugby fields.
Given the sustainable, green implementations in these building projects, their positive impacts are far reaching. The 100 Green Star certified projects achieve the combined annual savings of 131 million kilowatt hours of electricity – the equivalent of powering 9,130 households for a year. This takes massive pressure off South Africa’s struggling power grid.
The 100 certifications also save a total of 176 million kilograms of carbon emissions – the same as taking 44,096 cars off the roads, or 5,000 full Boeing 747 flights travelling from Johannesburg to Cape Town.
Plus, they save 171 million litres of drinking water, which equates to the daily water requirements for nearly 86-million people for one day.
All these savings also have a meaningful impact to the bottom lines of the businesses that own and occupy these green buildings. In addition to creating more sustainable and productive environments, the financial incentives of operating green buildings are also being realised, particularly in the face of South Africa’s water scarcity and increasing energy costs.
Wilkinson stresses: “Green Star certification allows for the recognition and reward of environmental leadership and the GBCSA could not have reached 100 certifications without support and innovation from across the industry.”
Wilkinson explains that with green building accelerating in South Africa, as its extensive benefits are being increasingly recognised, it has become essential for a rigorous, standardised system that rates just how green projects are with tangible results to back up these claims. This is what the GBCSA’s Green Star SA rating tools do. GBCSA developed the Green Star SA rating system and is the official certification body for green building projects.
A Green Star SA rating guarantees that businesses live up to their green building claims. Independent assessors are employed to evaluate submissions and allocate points based on the green measures that have been implemented. Certification is awarded for 4-Star, 5-Star or 6-Star Green Star SA ratings.
Of the first 100 Green Star SA certifications in South Africa, nine were awarded 6 stars which represents world leadership in green building.
The one hundredth building certification by GBCSA with a 5-Star Green Star SA Existing Building rating was officially awarded to Kirstenhof Office Park in Paulshof, Sandton. It is owned by Growthpoint Properties, South Africa’s largest JSE-listed Real Estate Investment Trust (REIT), a GBCSA Platinum Founding Member and the owner of the biggest portfolio of green buildings in the country.
Its elegant Cape Dutch design buildings are located on Witkoppen Road at the Rivonia N1 off-ramp. Kirstenhof Office Park’s long list of green features include energy efficient lighting including fluorescents fitted with high frequency ballasts; flow restrictors on all taps; an operation waste and materials management plan and a storm water management plan to limit disruption of natural hydrology, minimise pollution and site deterioration.
Norbert Sasse, CEO of Growth point Properties, comments, “It is an honour to receive the 100th Green Star SA rating from the GBCSA. Growthpoint is committed to the sustainability of the environment and the communities in which we are invested through our properties. We want our buildings to be places where business in South Africa can thrive, with quality, healthy, productive working environments that also offer savings on utilities consumption and costs.”
Gauteng leads South Africa with the largest number of certified Green Star SA projects – an impressive 55. It is followed by the Western Cape with 29, KwaZulu-Natal with 11, the Eastern Cape with two and Limpopo with one. GBCSA has also certified two international ratings.
“Congratulations to the GBCSA and the industry as a whole on this achievement,” says Robin Lockhart-Ross, Managing Executive of Nedbank Property Finance. “As a bank whose reputation is built on its commitment to the environment and sustainability, we are proud of our own achievements in championing the cause of green buildings not only by financing and occupying these, but also through our sponsorship of the Existing Building Performance Rating Tool and the GBCSA annual convention, a platform that is aimed at ensuring that the ‘green’ agenda is maintained.”
Wilkinson says: “The increase in pace in green building in South Africa has been phenomenal. From a single Green Star SA certification only five years ago, to 50 certifications last year, and 100 certifications now, the green building movement in South Africa is certainly gaining momentum.
“The positive impacts these buildings are having on our environment is meaningful, and becomes more significant with each green building certified. We would like to congratulate South Africa’s commercial property sector on this landmark achievement, and encourage them to continue to create sustainable, green buildings.”
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South Africa has announced its list of preferred bidders for the fourth round auction of renewable energy projects.
The country will add about 1,000 mw of power in this round, industry insiders told Reuters.
Named “Windows 4″, the renewable energy bidding rounds have invited bids for a range of renewable projects such as wind, photovoltaic, biomass and small scale
South Africa, the most advanced economy of the Dark Continent, has been struggling to keep its grid in order and to meet consumer demand owing to a lack of capacity building since the end of apartheid.
It still depends on coal for 95 percent of its energy production.
The country is looking to introduce green energy into its mix on a larger scale.
According to Reuters, some of the possible bidders include Building Energy, Italy; Enel Green Power, Italy; paper maker Sappi and BioTherm, Johannesberg.
Also Germany’s state-controlled development bank KfW announced last week that it had granted the power utility Eskom a 4 billion rand loan to help modernise its power grid and to connect new renewable energy projects to the system.
Source: GreenTech Lead
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