On the 3rd of July, citizens throughout the world celebrated Plastic Bag Free Day. This, hot on the heels of Environment Day and World Oceans Day, both celebrated a few weeks earlier. On all three these days, and throughout the month of Plastic Free July, consumers were encouraged to #beatplasticspollution and join the challenge to “choose to refuse” single-use plastics.
Calls for action such as these make it clear that consumers around the world are tired of visible litter. By responding on social media platforms with zealous passion, they demand to see an end to plastic packaging such as carrier bags, drinking straws and cotton ear buds.
Recognizing an opportunity to gain significant marketing and PR mileage some retailers and brand-owners were quick to respond to these public outcries by introducing alternatives such as paper bags and piloting a compostable bag made from starches, cellulose, vegetable oils and combinations as an “environmentally friendly alternative to plastic bags” to replace all plastic carrier bags, barrier bags and fruit and vegetable bags.
To the uninformed, this might seem an excellent and practical solution to solve an irritating problem. The reality, unfortunately, is far from the truth. Many of the so-called “plastic alternatives” that are now flooding the market have not been properly evaluated.
Offering a compostable carrier bag to consumers sounds good in theory; however further scrutiny reveals that these bags and other biodegradable plastic products will only degrade in a properly managed composting facility and definitely not in the normal suburban compost heap.
According to the internationally accepted standard for compostability (EN 13432), the packaging must be mixed with organic waste and maintained under test scale composting conditions for 12 weeks. If not kept under ideal conditions, these bags will not biodegrade and are most likely to end up in one of the country’s landfills (also not ideal composting environment) or worse – in the recycling stream where it will contaminate the entire stream and render more material unrecyclable.
South Africa has a robust and well-developed plastics recycling industry that provided jobs to more than 52 000 collectors who collect waste that is mechanically recycled into new raw materials (more than 313 700 tons of plastic material in 2017 alone). Thanks to their dedicated efforts and the South Africans committed to recycling, 214 220 tons of CO² and enough landfill space to fill 714 Olympic sized swimming pools were saved in one year – this is the equivalent weight of 560 Airbus A380 aeroplanes, saving enough fuel to keep 178 000 cars on the road for one year!
Unfortunately, the same cannot be said of these replacement materials. All of these products will eventually reach the end of life and will need to be discarded. A non-woven plastic re-usable plastic bag, for example, is not currently recycled in South Africa owing to the fact that the stitching and webbing used in the manufacture of the bag are made of different materials to the bulk of the bag.
Likewise, drinking straws made from alternate materials such as glass or bamboo tubing are neither currently recycled in South Africa nor, collected by waste pickers due to their low value and weight.
On the other hand, when combined with a responsible, well-managed waste management system, a recyclable product not only underwrites and supports a circular economy, but also ensures that precious resources are protected and reused for as long as possible. Rejecting a “fit for purpose” plastic packaging material with a low carbon footprint, in favour of an alternative material that is imported, more expensive, with a higher carbon footprint and potentially uses scarce food resources as raw material could creating an even bigger problem, rather than solve this one.
Plastics don’t litter – people do. Opting for biodegradable packaging is not going to change the human behavior of littering. Consumers need to commit to protecting our environment and educate themselves on the facts around packaging alternatives, as well as the benefits of effective plastic recycling and the correct disposal of materials they no longer need. The marketing jargon promoting these replacement materials should be researched before boldly switching to alternative materials.
Similarly, it is of vital importance that legislators, local government, consumers and the plastics industry continue to work together on developing solutions that are sustainable, well researched and properly evaluated. Only through this combined effort can we ensure that the resources are utilized and managed efficiently and cater to an increasing population seeking the unrivaled benefits offered by plastics packaging when it comes to preventing food waste, extending shelf life of products, and protection against breakage.
Executive Director: Plastics|SA
South Africa’s three main airports have each been awarded four-star ratings for flight punctuality, Airports Company South Africa (ACSA) has announced. The rankings were awarded by global flight information provider OAG.
The maximum number of stars that can be awarded in the OAG On-Time Performance (OTP) Ratings is five, and only the top 10% of airports and airlines are given five stars. ACSA aims to join that 10%.
The four-star South African airports are all owned and operated by ACSA. The best performer amongst them was Durban’s King Shaka International Airport, with 84.8% on-time performance. This was followed by Cape Town International Airport (84.4%) and Johannesburg’s OR Tambo International Airport (82.9%).
“Operating large airports is a complex business that involves coordination and integration among thousands of people who provide the services required for aircraft to be able to land and take-off at the scheduled times,” pointed out ACSA chief operating officer (Ms) Fundi Sithebe. “When running an airport, one relatively small problem in one area has the potential to create a knock-on effect across the system. This is why it is key for management of airports to focus closely not only on the major elements of delivering on-time performance, but also on things that are perceived to be trivial.”
The OTP ratings are determined over a rolling 12-month timeframe. To qualify for a rating, all airports and airlines must fulfil two criteria. Each must have at least 600 operations a month and they must supply OAG with flight status information for at least 80% of scheduled flights during the 12 months.
ACSA is Africa’s largest airport operator, responsible for nine South African airports. In addition to the three already mentioned, these are Bram Fischer International Airport(Bloemfontein), East London Airport, George Airport, Kimberley Airport, Port Elizabeth Airport and Upington Airport.
The trial saw plastic carrier, barrier and fruit and vegetable bags at the store replaced with compostable bags made from starches, cellulose, vegetable oils and combinations.
The compostable bag is produced by an Italian company Novamont. Based on 20 years of research, Novamont had developed a fully biodegradable and compostable bioplastic resin known as Mater-Bi.
At the trial event, Pick n Pay chairperson Gareth Ackerman said much progress has been made since 2003, when the plastic bag levy was introduced in South Africa, to encourage customers to move away from single-use plastic carrier bags, but more needs to be done.
“Sustainable solutions require all parties involved – retailers, government, plastic manufacturers, consumers and recyclers – to work collaboratively and beyond plastic bags to all forms of waste,” he added.
Pick n Pay transformation director Suzanne Ackerman-Berman explained that the bags that were piloted are strong and can be reused. “The important difference [compared with plastic bags] is that they are home compostable. The bags are designed to collect organic waste, such as kitchen scraps, and will compost with the organic waste in a home compost environment.”
The bags will break down after three to six months – depending on the composting system – compared with the reported 500 to 1 000 years for plastic bags. Customers can also bring the bags back to the company’s stores, after which the company will take them to a Pick n Pay compostingfacility.
“Given that this option is still in its infancy in South Africa, there are several considerations to look at before they could be introduced to scale. Currently, for example, there are no integrated large-scale composting facilities available,” said Ackerman-Berman.
Meanwhile, the company last month committed to removing all plastic straws from checkouts and make only paper straws available at its cold-drink kiosks, while store branded earbuds with paper inners will also be introduced.
Additionally, Pick n Pay will introduce 100% recyclable plastic bags in stores from August.
The annual KwaZulu-Natal Manufacturing Indaba, to be held on the 22nd August 2018 at the ICC in Durban, South Africa is a revered platform for assembling provincial manufacturers and businesses to explore growth opportunities, uncover the latest manufacturing incentives and trends, as well as to network and collaborate with relevant contacts vested in the sector. The event has announced its agenda which includes a dynamic offering of engaging sessions discussing a range of thought-provoking topics, amongst which are the 4th Industrial Revolution, maximising the market for manufacturers and accessing new markets for manufacturers.
The conference will host forums on the 4th Industrial Revolution and its implication on manufacturing units within the sector. Well-versed industry leaders will impart their knowledge of opportunity development and management of threats whilst proactively implementing strategies to fortify competitive advantage and boost profits through the digitalisation of manufacturing operations. Panel discussions focused on this theme have been devised to educate both small and large manufacturers on the relevance that Industry 4.0 has to every company, thereby empowering manufacturing facilities to improve their innovation tactics and consequently their bottom-line.
A focussed session will delve into how industry players in the sector can thrive by maximising the manufacturing market making use of government grant incentives. Various tools are available to support industrialists in this endeavour and will be thoroughly unpacked, while a greater understanding of how government can contribute to the success of such firms though various incentives, investment opportunities and financial solutions will also be explored.
Moreover, forums have been set up to educate players of the manufacturing domain about the various financing opportunities available to them. These dialogues will explore funding options to encourage investment in South Africa’s manufacturing facilities, assisting them to initiate and execute potential projects. Numerous conditions are required to be met by candidates in order for businesses to gain access to funding initiatives and these panels will serve as platforms to inform potential applicants thereof.
The Conference programme offers a stage for robust discussion and debate on the everchanging nature of the manufacturing landscape which deems acquiring constant access to emerging markets essential. Managing these changes requires a thorough understanding of economic trends that will have a significant impact on manufacturers. Furthermore, forums led by industry experts will unpack prevalent growth opportunities in the small business manufacturing environment and how these smaller enterprises ultimately enable the accelerated growth of larger, more established manufacturing units.
The productivity debate is a pertinent topic within the manufacturing industry. Adopting technology, cultivating talent across the generations and encouraging skills acquisition are fundamental factors to enhancing productivity rates within the sector. Implementation of such strategies will be explored in detail to encourage manufacturers to grow their establishments and create a competitive edge that will see them at the forefront of the industry.
The KwaZulu-Natal Manufacturing Indaba is where industry players converge to discuss prevailing and future concerns whilst acquiring access to relevant networks, content and ideas that empower individuals and manufacturing units to prosper in this highly competitive sector. The event represents the ultimate marketplace for practical educational opportunities that help industry professionals discover what incentives are available from the Province and government to support KwaZulu-Natal manufacturers in growing their businesses, thereby striving to contribute to South Africa’s manufacturing economy in its entirety.
MORE ABOUT THE MANUFACTURING INDABA
The annual KwaZulu-Natal Manufacturing Indaba will be hosted at Durban ICC , Durban on the 22 August 2018. The aim of the Manufacturing Indaba 2018 and its provincial roadshows is to focus on and boost the growth potential of key industry sectors, namely: automotive, construction, metals, forestry, paper & packaging, chemicals, aerospace & defence, industry products and services, and to provide a platform for informative and interactive sessions with the prime movers of the nation’s manufacturing sectors.
Following confirmed reports of violent intimidation and harassment of its members and their employees by mafia-style business forums on construction sites in KwaZulu-Natal and other parts of the country, Master Builders South Africa (MBSA) – the country’s federation of construction companies – has been alerted of new reports of similar incidents by forums that have now organised themselves in Gauteng.
MBSA Executive Director, Roy Mnisi says the federation is gravely concerned about the spread of this trend to other provinces and has called for the country’s law enforcement agencies to assist in bringing sanity to the sector.
He explains that the forums’ modus operandi is to demand 30% of the entire construction contract price while claiming to be fulfilling government’s mantra of radical economic transformation. “This is being done without regard for the fact that main contractors may have already subcontracted a proportion of the work that often far exceeds 30% of the contract to SMMEs and/or black contractors.”
Due to the often-violent nature of these incidents, construction companies have been forced to delay work on affected projects, escalating their cost and rendering workers on such sites redundant for long periods on end, as efforts are made to deal with these forums.
Mnisi adds that the MBSA is committed to transforming the sector and to providing more support to emerging contractors, but emphasises that the violent and criminal nature of these disruptions has no place in a progressive economy. He warns that the use of violence, intimidation and harassment will only reverse the gains made to date in giving a legitimate voice to the call for transforming the industry.
“As a federation of employers in the building industry, we represent over 4000 members – the vast majority of which are small and medium-sized construction companies. They are sub-contracted at various levels in these major construction projects and, despite having scheduled their work accordingly, now often find themselves idle when work on sites is suspended,” says Mnisi.
In 2016, when similar incidents were reported in KwaZulu-Natal, MBSA engaged the local forums. All parties agreed on a roadmap for transformation and committed to continued and non-violent engagement, amongst other concessions. However, Mnisi shares some challenges experienced in managing the forums’ demands: “With the forums being numerous and, in some instances, not formalised, discussions with some of them sometimes achieve very little, if anything at all. Transformation is a very legitimate issue that must be addressed, but as an industry we are now at risk of losing the traction that we have gained if these incidents are allowed to fester and if we allow members of our communities to embark on illegal activities under the guise of pursuing radical economic transformation.”
He urges all genuine built environment-related business forums to engage MBSA and other legitimate voluntary associations in the sector to work together and find sustainable and lawful ways of addressing the imbalances of the past.
“As a federation, we require all MBSA members to comply with all BBBEE-related laws, Procurement Regulations and the Sector Charter Codes. We are working with our members to ensure speedy transformation of the sector. In 2016 a pledge was made in the form of a Transformation Declaration which commits all our members to programmes for sustainable and meaningful socio-economic transformation of the sector through skills development and wider economic participation. Through this Declaration, we have rolled out a Small Builders Development programme that provides support to largely black contractors. We have also been actively engaging relevant parties and secured commitments on behalf of our emerging-contractor members regarding Preferential Procurement Regulations and late/non-payment issues, because we realise the impact of such matters on small/medium sized construction companies,” concludes Mnisi.
The issue of on-site intimidation by business forums, along with others affecting the industry, will be addressed at the MBSA’s upcoming Congress in Port Elizabeth.
Master Builders South Africa is a federation of registered employer associations representing contractors and employers in the South African construction industry. For more information contact Mr Roy Mnisi on 011205900 or visit https://www.masterbuilders.org.za.
According to the US Geological Survey, more than 99.7% of the Earth’s water is unusable by humans and most other living things, either because it is saline or trapped in glaciers. This leaves a tiny portion of accessible freshwater for humans to use. To add to the pressure, South Africa is a semi-arid region with a mean annual precipitation of 497mm per year, just over half the global average of 860mm per year making it the 30th driest country in the world according to the World Wildlife Fund. In addition, research has indicated that total precipitation in the region has declined, and southern Africa’s water resources are likely to decrease further as a result of climate change and rapidly increasing population growth and urbanization The current water crisis in Cape Town is testimony to this with Day Zero still looming for the city into 2019, and water security very much in the balance. Enter Zero Mass Water’s SOURCE Hydropanels: a world-first technology which uses sunlight and air to make safe, pure drinking water.
Powered entirely by solar, SOURCE extracts pure water vapour from the air and converts it into liquid water similar to distilled. This water is mineralised with magnesium and calcium before being delivered directly to a tap. Completely infrastructure-independent, SOURCE makes water without any external electric or water input. This significant advancement in drinking water access is made possible through the combination of thermodynamics, materials science, and controls technology.
Developed by Zero Mass Water founder and CEO Cody Friesen, a materials scientist and associate professor at Arizona State University, SOURCE utilises an ultra-absorbent material that collects water from the air around it in even arid conditions. Producing an average of 3-5 litres of water per panel per day, the Hydropanels are built in arrays designed to meet the drinking water needs of each application. For developers and architects incorporating smart-home technology into their designs and offerings, SOURCE is a differentiating feature of any modern home. Providing drinking water security and quality without any environmental consequence, SOURCE Hydropanels are vital for every resilient home and community.
For the hospitality sector, SOURCE adds value when built into scalable arrays. The SOURCE Hydropanels are modular and can be aggregated to meet the drinking water needs of a hotel, lodge or office building. “With the high-cost and environmental damage of bottled water, hotels and attractions need a better choice for their guests. Our system provides a daily supply of delicious, high-quality drinking water while offsetting the carbon footprint of bottled water.
With renewable water made on-site, SOURCE offers an infrastructure-free and cost-saving alternative to bottled water, without the hassle or logistics of purchasing and delivering it,” says Friesen. With the technology installed for emergency situations, in municipalities that have failing infrastructures, and homes for families looking for a better drinking water choice, the scope of applications for SOURCE Hydropanels in South Africa is seemingly endless, and will certainly go a long way to ensuring water security for all.
All South African industrial stakeholders – companies, professionals, workers, and unions – with an interest in the future of human labour under Industry 4.0, otherwise known as the Fourth Industrial Revolution, are invited to meet Pepper the robot at Sustainability Week 2018.
Pepper is South Africa’s first client-friendly humanoid robot, recently unveiled at Nedbank’s digital-branch, the NZone, at the Gautrain station in Sandton. Pepper is set to become Nedbank’s newest client service champion in the pursuit of enriching the client experience.
Now Pepper will be joining other top speakers at the Industry 4.0 Workshop on 6 June at the CSIR ICC in Tshwane.
One of the biggest concerns of developing countries is that the conjunction of Artificial Intelligence and automation poses a threat to workers’ jobs. Quite simply, the fear is that workers will be automated out of existence.
By way of reassurance, Pepper quotes a recent report by the UN:
“First off, artificial intelligence, 3D printers and other innovations are generally designed to excel at a very specific set of tasks.” To master an entire occupations takes considerable.
“Secondly, new technologies not only destroy, but also create jobs.” Technological innovation has always enhanced productivity and created new products and markets, generating new jobs.
“Thirdly, just because it is technically feasible to substitute an entire profession with computers, does not mean it will happen. A variety of economic, legal, regulatory and socio-political factors will prevent many occupations from disappearing.”
A recent study found that by 2016, only one out of 270 occupations listed in the A 1950 US census found out of 270 occupations, automation had eliminated only one – elevator operator.
Meet Pepper at Sustainability Week 2018.
Register today at www.sustainabilityweek.co.za
Watch this video for a sneak preview:
The possibility of load shedding by Eskom in South Africa this winter is larger than the Day Zero water crisis that engulfed Cape Town until last month, independent energy expert Ted Blom told Fin24 on Wednesday.
Eskom, however, told Parliament in April that South Africa’s electricity grid is “stable” as the country heads into the winter months when electricity usage rises.
Eskom told Fin24 on Wednesday that load shedding this winter is not likely, as it implemented plans to manage a shift in plant performance and coal-stock levels.
Blom, however, said Cape Town’s Day Zero was avoided by people starting to save water ahead of time. Eskom, on the other hand, only sent out tenders for emergency coal supplies last week after permission was obtained from National Treasury.
Although Eskom’s new board is trying to follow compliance in the process, Blom claims the power utility’s management should have foreseen six months ago already that there would be a problem with enough coal supplies for the winter electricity spike.
Apart from his own knowledge of the industry, said Blom, his claims are substantiated by reliable sources at Eskom.
“Chances are more than 50% that there will be load shedding this winter. Where is Eskom going to find coal? Coal does not just fall out of heaven. You have to mine it. You need skilled miners and equipment for that,” he said.
He suspects Eskom has a coal shortfall of about a million tonnes per month and is of the view that, even when all is in place to obtain more coal supplies, it will take three to five months to catch up on the backlog – in other words, during the winter period.
Eskom issued a statement in April indicating that seven of its power stations’ coal stockpile levels stood at 20 days, below the required target.
Eskom told Parliament’s portfolio committee on public enterprises that the coal supply issues are made worse by the fact that Tegeta is in business rescue.
It also told Parliament in April that it has plans in place to manage its primary energy resources and achieve healthy stockpiles across its power stations.
“Eskom has already admitted that it is between 3 and 5 million tonnes of coal short. That is more than half of its stockpiles,” said Blom.
“Eskom’s board now consists of a lovely bunch of new guys, but they don’t know anything about the electricity industry. At least half of Eskom’s board should consist of people with knowledge of electricity generation and coal mining.
“Electricity is crucial for South Africa’s economy and diesel has already been used for generation since January at a rate of more than R1bn per month.”
In Blom’s view, South Africa’s energy sector needs a major revamp in which regulation loopholes are closed.
“If Cyril (Ramaphosa) is serious, he should upgrade energy generation regulations and avoid rogue behaviour in the industry,” said Blom.
In his view, energy needs to be declared a basic industrial input factor and every measure taken to keep it as cheap as possible.
“Sensible energy policy is probably the most relevant topic in Africa at this time, and the South African policy is clearly not the one to emulate. We need to start our thinking from the ground up, rather than continue with the patchwork efforts of the past. Without affordable cheap energy, economic growth is not possible,” he cautioned.
Blom will be a speaker at the upcoming African Utility Week taking place in Cape Town from May 15 to 17, during which over 7 000 decision makers from more than 80 countries will discuss energy and water issues faced on the continent.
Fin24 reported last week that Eskom said it is not bailing out Gupta-linked Optimum Coal Mine, which is in business rescue. This was in response to a report by City Press, claiming the proposed business rescue plan for Optimum would see Eskom pay twice as much for half the coal it can get from the mine.
Eskom has said it is in discussions with the mine’s business rescue practitioners and no agreement has been reached.
Some of South Africa’s biggest mixed-use developments are evolving into “smart cities” by embracing the latest technology.
Beyond the new urbanism trend – where all daily requirements are within easy reach in walkable precincts – new developments are targeting millennial investors with “smart” features that make a smart city.
Think electric car charging stations, precinct-wide WIFI and Fibre to the Home, significantly enhanced 24-hour security, and assistance in your home for a range of emergencies – at the push of a button. This is the future of development.
What are millennial buyers looking for?
Social commentator Mal Fletcher says: “Millennials expect to create a better future, using the collaborative power of digital technology.”
“Technology is an integral accompaniment to new urbanism as it holds the desirable characteristics of walkable precincts, where residential and office space are combined with gyms, hotels, and a wide variety of upmarket, cocktail bars and restaurants,” shares Nicholas Stopforth, Managing Director of Amdec Property Development.
Increasingly, people want to live, work and play in the same place – a space where they can easily and safely walk to an office, home, restaurant or another amenity. This concept is a mixed-use precinct. When combined with the latest in technology, it becomes a smart city.
And while a smart city has all the latest technological security and lifestyle benefits, these are designed into the development so largely unseen. You won’t find high-rise tower blocks with unsightly satellite dishes adorning the façade. Instead, imagine buildings that offer green design, green spaces, and pedestrianised roads, yet harken back to a feel of traditional, communal village life where all your daily needs are within walking distance.
It might sound contradictory, but it’s not.
Stopforth explains that new developments must offer a range of features to suit the ever-changing trends and demands of modern living. Developers need to expand the range of features that come with this community-driven lifestyle to include wireless internet across the precinct, the latest in access control, panic buttons as well as medical and security assistance on instant standby. The Melrose Arch precinct even has license plate recognition, to ensure increased security for residents and businesses.
Amdec Property Developments is the group behind South Africa’s best practice in mixed-use precinct design both Melrose Arch and Harbour Arch, the fastest selling large-scale development in the country with sales and reservations topping R1billion since its launch in October 2017.
The planned R10billion Harbour Arch on Cape Town’s foreshore, due to open in August 2019, is modelled on the global trend for walkable precincts such as Darling Harbour in Sydney and Canary Wharf in London.
As proof of the desirability of smart cities, Melrose Arch’s latest residential development – One on Whiteley – is already 75% sold out.
Residents at One on Whiteley will benefit from all the precinct’s sophisticated technology systems including fibre internet, back-up generators, license plate recognition, electric car charging stations, and recycling facilities.
But more than just focussing on technology, smart cities are focused on sustainability. And in South Africa, these mixed-use, new urbanist precincts are certainly driving the sustainability trend.
The world over, developers are under pressure to drastically minimise water usage and incorporate eco-friendly technologies that will benefit the planet in the long-term.
“Residents and investors want to know what is being done to reduce impact on the environment,” says Stopforth.
Sustainability is a key focus area in Amdec’s developments, with green building initiatives including refuse recycling, water-saving devices, low-energy LED lighting, and rainwater harvesting.
These will be core features of Cape Town’s new Harbour Arch precinct. With water scarcity being the new normal for the city, developers are required to implement water-wise strategies from the ground up. For this reason, Harbour Arch has invested a lot of time and energy in scenario planning with regards to the drought Cape Town faces.
This has resulted in a shift towards water-conscious design and planning – like rainwater and grey water harvesting, dual-flush plumbing systems, and water storage facilities. The company will also be investigating the viability of installing an on-site desalination plant to take advantage of the abundant ground water available in the foreshore area.
“There is huge benefit in executing water-saving measures at the construction stage, rather than retro-fitting. Not only is it better to have systems in place at the start, but it saves money in the long run,” says Stopforth.
“Ultimately, we need to reduce our impact. A smart development needs to be smart about sustaining our future.”
Source: Leadership Magazine
Growthpoint Properties is the first South African company to issue a Green Bond on the Johannesburg Stock Exchange (JSE). The Growthpoint Green Bonds, for terms of five, seven and ten years, were issued and listed on the JSE on Friday, 9 March 2018.
Green Bonds raise money that is specially allocated for funding projects that result in positive environmental and climate benefits. The R1.1 billion (USD94 million) Green Bonds issued by Growthpoint will be used to fund the green buildings and green initiatives of South Africa’s leading REIT.
The Green Bonds form part of Growthpoint’s R20 billion Domestic Medium Term Note (DMTN) Programme. Growthpoint has a national scale Aaa.za Moody’s rating, with many banks opting to hold Growthpoint paper as High-Quality Liquid Assets (HQLA).
The Green Bonds are priced at 139 basis points (1.39%) for the five-year term, at 169 basis points (1.69%) for the seven-year term and at 200 basis points (2.00%) for the 10-year term above three-month JIBAR.
The bond auction took place on Tuesday, 6 March 2018, and is believed to be the first public auction in South Africa for a 10-year bond for a real estate company.
The Growthpoint Green Bonds constitute green instruments falling within the Green Bond Principles of the Real Estate Sector and the green segment of the JSE’s Interest Rate Market.
Donna Nemer, Director Capital Markets at the JSE, says: “The JSE is proud to welcome Growthpoint Properties to the Green Bond Segment as the first corporate in South Africa to issue a Green Bond. Growthpoint’s successful inaugural Green Bond proves there are benefits in committing to promoting South Africa’s climate-resilient future as well as for being at the forefront of the financial sector’s response to the investment challenges posed by climate change. Growthpoint is laying new foundations for the capital flows needed to achieve the commitments within the South African context for securing investments and jobs in future and is to be greatly congratulated for this.”
Norbert Sasse, Group CEO of Growthpoint Properties, comments: “Growthpoint’s inaugural Green Bonds link our sustainable developments and green buildings with capital markets. This gives investors a unique opportunity to participate in supporting greater environmental sustainability and climate change mitigation and enables them to evaluate the environmental impact of their investment. The work of the JSE, bond arranger RMB and our team at Growthpoint, as well as the interest and support of investors in our pioneering Green Bonds, has been exciting. We are pleased with the results of the issue and the positive response from local and international investors. We intend to continue to be a catalyst for a more sustainable property sector.”
Dirkje Bouma, Growthpoint’s Group Treasurer, adds: “The new Green Bonds give Growthpoint access to alternative sources of funding and allow us to lengthen the weighted average term of our debt book.”
RMB was the lead arranger of the bonds and Delia Patterson, Senior Transactor – Debt Capital Markets Distribution at RMB, explains: “Growthpoint is the first corporate issuer to offer Green Bonds to the debt capital markets and this was very well received with strong interest from a wide group of local investors and specific international funds. Investors appreciate the additional level of oversight that is provided to meet the Green classification criteria and this usually results in stronger appetite at better pricing than the nominal bonds. Through this issuance Growthpoint has successfully positioned themselves as a world-class property fund clearly committed to supporting and investing in environmental sustainability, with their Green Bond Framework and reporting commitment attached to the bonds issued, and with the longest 10-year bond maturing in 2028.”
Among the investors in the new Growthpoint Green Bonds is the African Local Currency Bond Fund (ALCB Fund), an initiative of KfW Development Bank and the German Government backed by additional investors. It aims to promote the development of African capital markets by acting as an anchor investor in primary bond issuance. It has invested around USD70 million since inception in 13 countries. In addition to anchor investments, the ALCB Fund offers technical assistance to cover transaction related costs, including compliance with international Green Bond standards.
Karl von Klitzing, Chairman of the Board of the ALCB Fund, says: “We are delighted to be investing in Growthpoint’s inaugural Green Bond and to be supporting the sustainable real estate sector. As the first corporate Green Bond issuance in Sub-Saharan Africa, it represents a milestone for the market. Growthpoint has developed a comprehensive framework with the Green Building Council of South Africa to ensure investors are well informed of the environmental impact of its green buildings. We hope to contribute towards improved reporting standards as a catalyst for further Green Bond issuance in renewable energy, housing and infrastructure sectors.”
Growthpoint is a leader in green building and climate change mitigation. Over 86 of its properties are green-certified buildings and have a combined property value of R18.7bn.
The proceeds of the bonds will be used exclusively to finance or refinance Growthpoint’s new and existing sustainable green properties and its projects which reduce environmental impact.
It will be mainly used to refinance funding for the green office buildings in the new Growthpoint THRIVE Portfolio and specifically the THRIVE Platinum Portfolio, which includes its top green-rated office properties. Buildings in this portfolio have a South African Property Owners Association (SAPOA) Premium- or A-grade rating. They also have a Green Building Council of South Africa (GBCSA) Green Star SA rating of Four Stars or higher (design, as-built or existing building performance).
In addition, suitable industrial and retail properties with Four-Star Green Star ratings or higher will also be eligible. Environmental projects related to Growthpoint’s buildings that have positive environmental impacts, such as solar energy projects, will also qualify for Green Bond funds.
The green buildings to which Growthpoint will assign proceeds are all independently certified by the GBCSA and their costs assured by Growthpoint’s auditors. Besides annual reporting on each building’s carbon emissions, energy, water and waste, investors can access Growthpoint’s app which records the water and energy consumption on an ongoing basis.
Growthpoint provides space to thrive with innovative and sustainable property solutions. It is an international property company and the largest South African primary REIT listed on the JSE. It owns and manages a diversified portfolio of 559 property assets, locally and internationally. Growthpoint is a Founding Member of GBCSA, a member of the GBCSA’s Green Building Leader Network, a component of the FTSE4Good Emerging Index and has been included in the FTSE/JSE Responsible Investment Index for eight years running. It owns and co-owns the largest portfolio of certified green buildings of any company in South Africa and is recognised as a leading developer of green buildings.