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Norwegian investment fund for developing countries Norfund has committed to invest R360-million in South African renewables investor and developer H1 Capital, while UK development finance institution (DFI) CDC Group will commit R240-million.

The transaction represents a joint vision by the two DFIs to mobilise climate finance to Africa and back clean infrastructure projects across the continent.

The investment from Norfund and CDC, which will soon be renamed British International Investment, will help to improve access to clean and affordable energy in South Africa.

The increase in clean energy supply will provide consistent power to South African cities, villages, townships, businesses and farms, thereby increasing productivity and encouraging economic growth.

It will also support South Africa’s clean energy goals, as it will enable H1 Capital to fund a pipeline of over 2.4 GW of new wind and solar projects, generating about 6 400 GWh/y. This will contribute to avoiding emissions of 6.2-million tonnes of carbon dioxide a year and help to accelerate South Africa’s transition to clean energy.

Norway International Development Minister Anne Beathe Tvinnereim says the new Norwegian climate investment fund, managed by Norfund, will be the government’s most efficient tool to help accelerate the global clean energy transition.

This will enable development of renewable energy and limit the climate crisis’ devastating impacts on the world’s poor, she adds.

In a joint statement, Norfund and CDC Group state that South Africa has tremendous economic potential, with government setting an ambitious target to generate 20 GW of new renewable capacity over the next decade to address power shortages and decarbonise South Africa’s power generation fleet.

Currently, coal contributes as much as 86% of South Africa’s energy generation.

“South Africa's target to generate 20 GW of new renewable capacity over the next ten years is indicative of the country’s bold steps toward securing a net-zero future for itself,” says UK Minister for Africa Vicky Ford.

In this regard, the UK government plans to invest $16-million in H1 Capital.

“Investments like this reaffirm and follow on from the commitment we have made to South Africa’s low-carbon transition through the $8.5-billion multi-donor Just Energy Transition Partnership,” she adds.

Further, the parties state that the investment in H1 Capital demonstrates commitment by the UK and Norway to act on pledges made at COP26 of scaling climate finance to Africa and deepening collaboration on solutions that will meet Africa’s needs and address climate change.

At the summit, Norway announced the creation of a new climate investment fund to be managed by Norfund, and this capital to H1 Capital will be the first investment under the new fund.

Norfund and CDC Group’s commitment also contribute to United Nation’s Sustainable Development Goal (SDG) seven – affordable and clean energy, SDG eight – good jobs and economic growth, and SDG 13 – climate action.

The transaction also qualifies for the 2X Challenge, which seeks to support businesses that provide women in emerging economies with access to leadership opportunities, quality employment and products and services that enhance their economic participation and inclusion.

Norfund CEO Tellef Thorleifsson says the company is “delighted” to put money to work quickly and effectively through what will be the first investment under the new mandate, with Norfund’s existing partners in H1 and CDC, in projects in line with the energy plans of the South African government.

CDC Group CE Nick O’Donohoe says the investment marks another key step toward fulfilling the group’s pledge to devote greater capital to fund clean infrastructure and to support markets like South Africa on their path toward a just transition.

“This investment signals our strengthened relationship with South Africa and clearly signals Britain’s commitment to help accelerate economic productivity and inclusiv...

Engineering and contracting group Murray & Roberts (M&R) says it will assess liquefied natural gas (LNG) infrastructure opportunities emerging in Europe as part of a strategic effort in that territory to reduce reliance on Russian gas imports following Russia’s recent invasion of Ukraine.

Germany recently announced its intention to build two LNG terminals, one in Brunsbuettel and one in Wilhelmshaven, as a part of a gas diversification strategy.

In addition, the International Energy Agency has released a ten-point plan outlining ways for the European Union (EU) as a whole to reduce its supplies of Russian gas by one-third, including through the building of LNG import terminals and the accelerated deployment of renewable energy.

In 2021, the EU imported 155-billion cubic metres of natural gas from Russia, accounting for around 45% of EU gas imports and close to 40% of its total gas consumption.

M&R CEO Henry Laas said the group’s energy, resources and infrastructure (ERI) platform, which had significant LNG experience, mostly in Australia, would assess the new LNG infrastructure opportunities “on a case-by-case basis”.

“We'll have to see what the competitive landscape looks like and what our chances would be to be successful in the region.

“I cannot say [today] whether we're going to be actively bidding for those opportunities, but we will certainly consider them on a case-by-case basis,” Laas said during a presentation of the JSE-listed company’s interim results.

However, he also noted that the ERI platform was already the biggest contributor to the group’s record R61.1-billion order book and that the unit’s growth prospects were limited less by the project pipelines of Australian, Asia and North America than by its bonding facilities.

M&R is hoping to materially increase its renewable-energy orders in the near term, with the newly established Wade Walker Solar business on the cusp of several large orders in South Africa.

Should independent power producer procurement programme projects reach financial close as scheduled in March and April, the order book of its power, industrial and water platform – which has been struggling to grow following demobilisation from the Medupi and Kusile sites – could rise from R500-million to up to R4-billion during the course of the current financial year.

With many of South Africa’s priority infrastructure projects having strategic importance for the development of water resources, Water and Sanitation Minister Senzo Mchunu highlighted several key projects across the country during a virtual briefing of the Portfolio Committee on Water and Sanitation.

In the Western Cape, he pointed to the Clanwilliam dam raising, which aims to provide additional water to improve the assurance of supply for agriculture, provide for water allocations to resource-poor farmers and to address dam safety aspects.

The scope of the work includes the raising of the existing dam wall by 13 m, the relocation of a section of the N7 directly affected by the raised dam wall and the raising of the secondary provincial roads affected by the full supply level in the dam basin. About 143 of the envisaged 262 properties have been expropriated.

The R534-million Nooitgedagt Coega low-level scheme, one of the projects to augment water supply in the drought-stricken Eastern Cape, comprises the construction of a flex mixer, two flocculation channels and settling tanks with six filters.

“This will increase the capacity of water treatment works from 70 megalitres a day to 210 megalitres a day,” Mchunu commented.

The augmentation project of the James Kleynhans bulk water supply in Makhanda is expected to improve water supply for the region and ensure security of supply for the long term.

In the Free State, the Xhariep Pipeline project comprises the construction of major water infrastructure, including abstraction works, water treatment plants, pump stations and a major pipeline, from the Gariep dam to Bloemfontein at a cost of about R10-billion.

“The Section 63 Vaal Intervention, one of the priority projects in Gauteng, includes the upgrading of water infrastructure, refurbishment, operations and maintenance, sustainability, water conservation, water demand management and advocacy within the Vaal area.

“This is meant to deal with urgent matters relating to security of supply and more urgently matters relating to the pollution of the Vaal river, and enhancement of capacity for the embattled Emfuleni local municipality.”

The Umkhomazi water project in KwaZulu-Natal, meanwhile, will provide water for the Umgeni water supply system, which is experiencing water shortages.

The project comprises the provision of bulk raw water implementation by the Trans-Caledon Tunnel Authority and bulk potable water implementation by Umgeni Water. The project is to be fully funded from loan funding.

In Limpopo, Mchunu highlighted the multi-year construction of the Masodi wastewater treatment works implemented by the Mogalakwena local municipality, delivering ten megalitres a day, with capacity for expansion to 15 megalitres a day if needed.

Meanwhile, one of the priority projects in the Northern Cape is the Vaal-Gamagara regional water supply scheme, in the John Taolo Gaetsewe district municipality.

This project entails the functional replacement of the existing steel pipeline with a new pipeline to provide assurance of current and future supply to all users.

In North West, the Brits water treatment works and associated works is set to boost the water supply for the Madibeng local municipality and surrounding areas. The Department of Water and Sanitation’s construction unit has completed 70% of the civil work.

Lastly, water supply in Mpumalanga will be enhanced by the Thembisile/Loskop regional bulk water supply project, which is currently at the tender stage.

Engineering and contracting group Murray & Roberts (M&R) reported a strong recovery in earnings for the interim period to December 31, as well as another increase in its order book, which rose to a record R61.1-billion.

The JSE-listed group reported attributable earnings of R55-million and headline earnings a share of 29c, representing a marked improvement on the R167-million attributable loss and 8c a share headline loss reported in the corresponding period of 2021.

Revenue during the period increased to R13.3-billion (R10.8-billion), while earnings before interest and tax from continuing operations rose to R337-million, from R117-million.

The company reported that it was generating revenue from its order book of between R2-billion and R2.5-billion monthly and was maintaining the order book value at record levels through the systematic addition of new project awards.

The current order backlog includes several multiyear contracts and the group is expecting further order-book growth throughout the 2022 calendar year given that its project pipeline includes near orders of R12.8-billion.

CEO Henry Laas expects most of M&R’s immediate revenue and earnings to be generated by its two international business platforms, while the renewable energy sector could provide an opportunity for its South Africa-focused unit over the medium term.

“Murray & Roberts is well positioned to enable and optimise the capital investments that corporations, governments and institutions will need to undertake to support sustainable human development, as the world emerges from the pandemic.

“The group’s order book reflects these pressing global development needs, as well as significant opportunities in international markets,” the company said in a statement to shareholders.

It will be a challenging six months ahead as Wilson Bayly Holmes-Ovcon (WBHO) “navigates the consequences” of exiting the Australian construction market, says CEO Wolfgang Neff.

“We’ll be dealing with some pressure to manage our Australian exposure.”

However, Neff adds that the exit plan, supported by South African financial institutions, should result in little or no impact to the group’s remaining operations.

“The group has a solid foundation to move forward from, with a significantly reduced amount of risk to the profitable operations in the business.”

WBHO has been in Australia for more than 20 years through a majority shareholding in building company Probuild Construction, as well as a largely civils business, WBHO Infrastructure.

“We all know that WBHO has been underperforming in Australia for quite a few years – especially the last four years have been poor,” says Neff.

This period included A$223-million in losses at some notably poorly managed projects.

An earlier attempt to sell Probuild was scuppered by the Australian Foreign Investment Review Board in January 2021.

“The sale would have recapitalised our infrastructure business in Australia,” says Neff. “When the sale didn’t work out, we immediately implemented Plan B, which was aimed at downsizing and stabilising the business.

“Unfortunately, our efforts to contain costs and restore profitability were negated by the impact of Covid-19 and the specific hardline regulations in Australia.”

These regulations included snap lockdowns, limited people movement and strict quarantine requirements, which resulted in further delays and unrecoverable costs, says Neff.

Within this period, the option to sell Probuild proved impossible, as potential buyers viewed the transaction as too risky, given the strict Covid environment, he adds.

No-one could travel to Australia to perform due diligence, for example, this while losses at the Australian business continued to mount.

“Over time, the South Africa business provided R2-billion in cash funding and substantial parent guarantee support, which peaked at A$178-million in October last year, and is now at A$119-million,” says Neff.

However, “the renewal of guarantee facilities in the context of the historical losses we have incurred, as well as a weakened Australian balance sheet, proved to be very difficult”.

Added to this, the outlook for the Australian construction industry became quite bleak owing to the Australian hardline approach to manage Covid, notes Neff.

“We saw much lower project availability, while the geopolitical tension between China and Australia also didn’t help. Rising inflation, as well as rising material and labour costs in a fixed-cost environment, also added to the pressure.”

“Also noteworthy,” says Neff, “is that we have not been able to travel to Australia in the last two years – the owners of the business were not granted permission to travel to Australia for two years. The risk versus reward simply became untenable.”

This saw WBHO’s board withdraw financial support to the Australian business and, in doing so, cap the exposure of the group to the existing company guarantees.

This will result in the Australian operations being placed in administration as they will be technically insolvent, says Neff.

“This will protect the profitability of the operations of the wider group and the interest of stakeholders going forward.”

Australia contributed around 60% of WBHO’s revenue since 2017, but hardly anything to operating profit, says Neff.

“The losses over the last three years and the current reporting period have eroded almost R3-billion in group earnings. The risk versus reward was simply out of kilter.”

South Africa'a Slow Rollout

Neff notes that the slow rollout of infrastructure projects in South Africa, especially within the South African National Roads Agency Limited space, should be a cause for concern.

Also, of government’s 55 shovel-ready projects announced in 2020, as an effort to counteract Covid-19 and ...

The next-generation Ford Everest, based on the Ranger bakkie, made its global debut on Tuesday.

The vehicle will be launched in South Africa later this year.

The new Everest is to be manufactured in Thailand, with some markets to receive semi-knockdown kits for local assembly.

The current Everest model is produced at Ford’s Silverton plant, in Pretoria, for the local and wider sub-Saharan markets, along with the Ford Ranger.

Everest production is, however, set to cease when Ford moves to focused, increased new-generation Ranger bakkie production at the South African facility later this year.

Three grades of the new Everest will be available at launch, namely Sport, Titanium+ and a new flagship grade, Platinum.

The new sports-utility vehicle has a wider track and longer wheelbase, and carries a strong resemblance to the new Ranger, also set to make its debut later this year.

High-series models are equipped with wireless charging, a leather trimmed e-shifter and an electric parking brake.

Depending on the variant, heated and ventilated ten-way power adjustable memory function seats are available for the driver, and eight-way for the passenger.

Heated seats are also available for the second row, depending on the variant.

Additionally, all occupants now have storage space and, depending on the model, are able to charge their devices with power outlets in all three rows of seats.

The second-row slides with a 60:40 split seatback and the 50:50-split third row, in the seven-seater configuration can be folded at the touch of a button on high series models.

Both the second- and third-row seats have been designed to fold flat to allow for long loads.

To stop items falling out of the back when the tailgate is lifted, the design team created a small lip, known as the apple catcher, at the rear of the cargo area. The team also created an underfloor storage space that helps keep the rear of the Everest organised.

Depending on trim level, the new Everest comes with 8-inch or 12.4-inch digital instrument panels that replace the traditional analogue clusters.

The vehicle also features large, high-resolution portrait 10.1- or 12-inch touchscreens. It also offers the latest Sync system, which comes with voice-activated communications, entertainment and information systems.

Additionally, there is an embedded factory-fitted modem, allowing customers to connect to their vehicles when linked with the FordPass app.

FordPass offers features like remote start, vehicle status check, and remote lock and unlock functions via a mobile device.

The portrait-orientated screen is also linked to a 360-degree camera with split-view display to ensure easier parking, or to assist when negotiating particularly tricky terrain.

In addition, customers can control Everest’s new exterior zone lighting system via the touchscreen or FordPass, which means they don’t have to park, work or camp in the dark.

Engine Line-up

Ford has refined its 3-l turbodiesel V6 engine for the Everest. It is one of three turbodiesel engine options available at launch, depending on the market.

Also available are the single-turbo and the bi-turbo 2-l inline four-cylinder diesel engines and a 2.3-l EcoBoost petrol engine.

Depending on the model, either a six-speed automatic or a ten-speed SelectShift automatic will be available.

The new Everest also comes with a choice of two four-wheel drive systems, underbody protection and off-road selectable drive modes, plus rear locking differential, two tow hooks upfront, and upfitter switches for accessories.

Depending on the market, Everest is also available with two-wheel drive.

Where available, Everest’s dedicated off-road screen displays vehicle information and a front camera view of the terrain ahead, with predictive overlay guidelines designed to help the driver negotiate obstacles.

With a single button press, drivers can view their driveline and diff-lock indicators, steering angle and guides, and vehicle roll-and-pitch angles.

The new Everest ...

Naamsa | The Automotive Business Council says it is concerned about the potential global impact of the Russian invasion of Ukraine.

“The current hostilities pose another potential global supply-chain challenge for the auto industry, because of Europe’s strategic significance to the global automotive ecosystem,” notes the industry body.

Europe is South Africa’s main new-vehicle export market. South Africa also imports a number of parts for its assembly plants, as well as fully built-up vehicles from Europe.

“The confrontation between Russia, on the one hand, and Ukraine, the European Union (EU), the US and their allies in the West, on the other hand, comes at the time when the global auto industry is still working to recover from the impact of Covid-19, the global shortages of semi-conductors, as well as many other supply-chain-related challenges experienced since the beginning of 2020,” says Naamsa.

“We don’t need another global economic disruption. The ripple effect of Russia’s invasion also holds negative consequences for the rand, oil prices, food prices, financial markets, as well as potential earlier and bigger interest rate hikes by the South African Reserve Bank to curb inflation.”

February was too early for the market to register any potential consumer unease about Russia’s aggression, with domestic new-vehicle sales increasing by 18.4%, to 44 229 units, compared with the same month last year.

Of total industry sales, an estimated 84.9% represented dealer sales, with 10.1% of vehicles entering the country’s rental fleets. About 1.2% of new vehicles were sold to industry corporate fleets, with the remaining 3.8% procured by government.

The new-passenger-car market reached 29 563 units in February, a 22.4% gain on the same month last year.

Sales of new bakkies, vans and taxis increased by 9.4%, to 12 290 units.

Medium-truck sales grew by 7.5%, reaching 572 units, while heavy-truck and bus sales jumped by 23.5%, to 1 804 units.

February new-vehicle exports from South Africa increased by 12.3%, to 32 867 units.

Following an extended downward trajectory in export sales since the second half of 2021, the increase during the month could, potentially, mark the start of a renewed

upward momentum in vehicle exports for the balance of the year, says Naamsa.

Looking ahead, the industry body says the recent growth-positive National Budget provided some good news for business and consumers, with a cut in corporate income tax, adjustments in personal income tax brackets, and a zero per cent hike in both the fuel and Road Accident Fund levies.

However, this relief may be short-lived as fuel prices have now hit record highs.

The vehicle emissions tax rate on passenger cars and double cab bakkies will also increase from April 1.

Mineral Resources and Energy Minister Gwede Mantashe indicated on Tuesday that his department will seek to “refocus” South Africa’s just energy transition debate as it prepares to finalise its policy on the matter.

In an address to the Africa Energy Indaba on Tuesday, Mantashe indicated that the Department of Mineral Resources and Energy (DMRE) intended initiating “a wide-ranging public dialogue and consultation process in this year” on its ‘Just Transition Framework for the Energy and Mining Sectors’.

A discussion document on the framework, which is separate from the work under way on the issue at the Presidential Climate Commission, was released in November and the DMRE received some initial comments from stakeholders in early January.

Mantashe said the DMRE’s framework would be biased towards mitigating the expected socioeconomic impacts on local mining and energy communities.

“It emphasises reskilling of workers as well as creating alternative economic livelihoods for the communities surrounding such energy utilities and mines.”

However, Mantashe also expressed his opposition to an “accelerated transition”, despite the concept featuring in a political declaration signed between South Africa and several developed countries at COP26 in Glasgow, Scotland, and which included an offer of $8.5-billion in concessional climate finance.

“We must not be ambivalent about the just energy transition debate.

“The assumed pendulum swing, or what others call ‘accelerated transition’, intent on replacing one system with another in a flash, is both irrational and dangerous,” Mantashe said in his speech.

Instead, he said the overall response should be “pragmatic” and place people and their livelihoods at the centre.

“The transition resets present economies, changes the nature of industries; gives newer logics to jobs and skills sets required.

“We, therefore, need to engage with this reality in a pragmatic manner, and refocus the debate away from the narrow techno-determinist view to one that focusses holistically on what this means for developing African societies.”

The transition, he stressed, should “aid development and address historical inequalities, not undermine, and exacerbate them”.

In a panel discussion hosted following Mantashe’s input Thulani Gcabashe, who is nonexecutive chairperson of Standard Bank and executive chairperson of Built Africa, said that tension and contestation over the just energy transition could not be wished away.

However, he argued that priority should be given to planning and execution, with a strong initial focus on the retraining and upskilling of workers in the coal value chain.

The former Eskom CEO also urged developed countries to find ways of transferring funds for the transition to developing countries, which didn’t have the resources on their own to mitigate carbon emissions.

African governments, meanwhile, should focus on creating the investment climates and incentives required for attracting new green industries and to produce the minerals required for the transition.

Mantashe agreed that Africa should be a global renewable-energy “trailblazer” but focused primarily on the fact that the continent had many of the mineral resources required for emerging clean energy systems, rather than on its solar, wind and land advantages.

“Our continent has all the minerals required to drive meaningful development at a fast pace.

“We need programmes to enable economic exploitation, beneficiation and exportation,” Mantashe said, adding that international cooperation and private finance were required to unleash the potential in Africa’s energy resources.

Employment and Labour Minister Thulas Nxesi on February 28 released the draft National Labour Migration Bill, which proposes amendments to the Employment Services Act, for public comment.

The Bill proposes that the Minister set quotas for the total number of documented foreign nationals with work visas who can be employed in certain economic sectors.

Further, the Bill aims to provide a framework to facilitate and regulate the employment of foreign nationals in South Africa, the employment of South Africans abroad and the reintegration and employment of South Africans residing or working abroad into the South African economy.

"The proposed National Labour Migration Bill aims to achieve balance across four areas, including addressing South Africans' expectations regarding access to work opportunities, given worsening unemployment and the perception that foreign nationals are distorting labour market access," Nxesi said.

He added that the Department of Home Affairs was also reviewing existing legislation and strengthening the Border Management Authority to secure porous borders and allow for the orderly movement of people through ports of entry only.

"The National Labour Migration Policy covers broad but interrelated areas where policy gaps exist, including labour migration governance and management, data for evidence-based policy monitoring and evaluation, as well as covering labour migration into and from South Africa," the Minister noted.

The Department of Employment and Labour researched extensively and benchmarked the proposed policy against international standards and the policy was based on international best practices, Nxesi said.

"It has become increasingly apparent that, given the rapid expansion of international migrations flows, South Africa needs to develop appropriate policies to effectively manage this," he said.

Further, South Africa is a signatory to various international conventions governing rights of migrants and refugees, and all the policies being proposing have been developed in the ambit of the Constitution. Government must ensure that it protected migrants and their families in accordance with international standards and guidelines, Nxesi noted.

Additionally, the proposed policy would also be implemented in the context of regional integration and cooperation imperatives at the Southern African Development Community and African Union level, he pointed out.

"The National Labour Migration Bill goes hand-in-hand with the proposed Employment Services Act amendment Bill by providing a policy framework and legal basis to regulate the extent to which employers can employ foreign nationals in their establishments while protecting the rights of migrants."

The proposed amendment Bill provides a framework that will enable the Minister to set quotas for the employment of foreign nationals and the quotas may apply to a sector of the economy, an occupational category or geographic area. The Minister can establish quotas in a sector only after consultation with the Employment Services Board and considering public comments, he explained.

Meanwhile, the Bill proposes that: "A person who employs a foreign national to work within the territory of the Republic of South Africa must employ such foreign national on terms and conditions of employment that are not inferior to those which would be provided to a South African citizen, permanent resident or refugee."

"This has been a sensitive issue and the labour market is distorted where people are exploiting desperate migrants by giving them low wages and without conditions of employment attached or the benefits they are supposed to enjoy," Nxesi said.

"The proposed amendments to the Employment Services Act of 2014 aims to limit the extent [to which] employers can employ a number of foreign nationals in possession of a valid work visa and codifies the implications for the employer to engage foreign nationals to promote, among other, that they only employ foreign nationals entit...

Renewed turmoil in the trucking industry has prompted the Road Freight Association (RFA) to again call for urgent intervention by the South Africa Police Service (SAPS).

The All Truck Drivers Forum (ATDF) has called on truck drivers not to operate on Monday.

ATDF action has been reported in parts of the Eastern Cape, KwaZulu-Natal, Gauteng and the Northern Cape.

The forum focuses on a number of issues, including the employment of non-South African truck drivers by some fleet operators.

Past activities by disgruntled truck drivers have included the closure of highways and the burning of trucks.

“Once again, the road freight and logistics industry is being held ransom and attacked by parties who are unhappy with conditions or matters within the sector,” notes RFA CEO Gavin Kelly.

“The RFA has repeatedly called on the SAPS to protect the lives and health of our drivers, to protect the vehicles and cargo of our members and to ensure that, whilst there is the right to highlight and discuss issues, that the blatant disregard of anyone else's right to safety, security, employment and the opportunity to operate a business for the betterment of all cannot be tolerated.”

Employers not registered with the National Bargaining Council for the Road Freight and Logistics Industry must be dealt with, notes Kelly.

“Those officials who are open to bribery and corruption, who refuse to perform their duties in terms of the mandates given to the various departments, must be censured or disciplined.

“We cannot continue to absorb these attacks,” adds Kelly.

“The compliant operators are being continually attacked and pushed out of the sector. South Africa is losing any sense of safety and efficiency in terms of moving goods through the country to the ports. We are beginning to feel the backlash from neighbouring countries. We must fix this now!”