Renewable energy projects for govt buildings could create jobs, boost GDP – De Lille | Fin24

Minister of Public Works and Infrastructure Patricia de Lille.

• Government is testing the market for renewable energy and resource efficiency projects at public facilities.
• The proposed programme would contribute over R253 billion to GDP and create an estimated 146 000 jobs.
• Respondents have 30 days to make submissions for the Request For Information process.

An infrastructure programme for renewable energy and other resource-efficiency projects at public facilities could contribute over R253 billion to GDP and create an estimated 146 000 jobs, according to Public Works and Infrastructure Minister Patricia De Lille.

The minister on Monday issued a Request for Information (RFI) regarding its Intergated Renewable Energy and Resource Efficiency Programme – also known as the Photovoltaic (PV) and Water Savings on Government Buildings Programme. It is a collaboration between the public and the private sector and government anticipates the programme will encourage further private sector investment.

The programme’s aims include lowering resource demand and improving resource efficiency; ensuring water security by reducing demand for potable water; ensuring energy security partly through improved building design; and promoting alternative, renewable energy sources.

The programme was first gazetted as a Strategic Integrated Project in July 2020 as and was part of the pipeline of projects of governments Infrastructure Investment Plan. 

The Department of Public Works and Infrastructure (DPWI) has the largest property portfolio in the country – it in turn consumes a significant amount of electricity and water and generates waste. Studies show the electricity consumption is at 4 021 gigawatt hours and water consumption is at 39 million kilolitres annually. Over 822 kilotons of waste is generated annually. “This equates to an average annual expenditure on electricity and water of R2.4 billion and R1.8 billion respectively,” the department said.

Thus, over a period of 30 years, the programme aims to reduce energy use intensity between 22% and 45% and water use intensity between 30% and 55%. Waste could be reduced and diverted from landfill sites by half. Other environmental impacts include a reduction of carbon and greenhouse gas emissions by over 54.5 megatons.

On the economic front it estimates to achieve savings and revenue of over R401 billion by 2050 – and these funds can then be reallocated to other government priorities. Over R253 billion will be directly contributed to GDP, the department said. the programme is expected to create 3 800 new small businesses – the majority of which are black-owned.

It also presents skills development opportunities for more than 117 000 people and is estimated to create 146 000 jobs. Job creation will be welcomed as South Africa’s jobless is at about 7.8 million or officially at its highest rate on record of 34.4%. Nearly 300 000 formal jobs in the country were lost during the first half of 2021, according to PwC’s estimates. Many of these people moved to the informal sector for employment.

Momentum Investments economists Sanisha Packirisamy noted that the programme would not only boost longer-term growth potential, but could also have “positive spinoffs” for employment creation, and provide opportunities for upstream and downstream sectors in the value chain.

“With jobs being created, there is an additional source of income for consumption expenditure, while suppliers in renewable energy, energy efficiency, water efficiency and alternative waste management are likely to benefit,” said Packirisamy.

The programme also supports the country’s green agenda, said Packirisamy. Most recently, Cabinet agreed to revise South Africa’s Nationally Determined Contributions (NDC) – related to emissions reductions in line with Paris Agreement climate-change commitments. The draft NDC proposed to limit emissions by 2030 within a range of 398 to 440 Mt CO2-eq. The new target for 2030 is between 350 and 420 Mt CO2-eq. The revision comes ahead of the UN’s climate change conference – COP26 – to be held in late October. Parties to the agreement are expected to revise targets every five years.

Amid the growing global trend toward decarbonisation and sustainability, the programme could attract “green-minded investors,” noted Packirisamy. “In SA there is likely to be a growing trend of climate and green bonds and loans issued by large corporates to help transition SA into a low-carbon economy,” said Packirisamy.

The RFI allows government to test market appetite and readiness for such projects. Firms operating in renewable energy, gas, heating, energy efficiency, water efficiency, alternative waste management, as well as ICT and local manufacturers and prospective equipment suppliers are encouraged to participate in the programme, according to De Lill’s spokesperson Zara Nicholson. Potential equity sponsors, commercial lenders, international Development Finance Institutions (DFI), grant funders are also encouraged. 

Various engagements have taken place with local and international DFIs and with local commercial banks on funding mechanisms.

The public has 30 days to respond to the RFI, and the subsequent evaluation is due for completion by 15 November. This will inform the request for proposals which is due to take place in January 2022.