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South African Business 2021

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Welcome to the ninth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa. This issue has a focus on economic recovery plans which have been put in place to tackle the challenges thrown up by the global Covid-19 pandemic. National government’s focus on infrastructure and the use of Special Economic Zones is highlighted, together with a feature on the nascent maritime economy. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at

OVERVIEW KwaZulu-Natal

OVERVIEW KwaZulu-Natal and all of the breweries making beer across South Africa. Discussions about feed-in tariffs will have to be finalised before the huge potential of the relevant sectors can be fulfilled with regard to energy generation. If national utility Eskom is broken into separate business units then the likelihood of the tariff discussions taking place will greatly increase. Funding Enel Green Power has adopted a new approach to funding its renewable energy projects. Law firm Norton Rose Fulbright has concluded a R3.5-billion financing arrangement with Absa and Nedbank which treats five wind farms to be built by Enel as one project, resulting in better terms. This is the first time such a method has been adopted in Africa. Investec intends listing a renewable energy fund on the JSE, to be called Revego Africa Energy. In addition, private banking clients of Investec may now receive loans to fund the installation of solar power in their homes, which payment can be linked to the home loan. The support of two of South Africa’s biggest institutional investors, the Industrial Development Corporation (IDC) and the Public Investment Corporation (PIC), has been crucial in getting the renewable energy sector off the ground. They have also played a role in helping communities fund their participation in community trusts. Many partnerships between local and international companies have been established. ONLINE RESOURCES IPP projects: National Energy Regulator of South Africa: South African National Energy Development Institute: South African Photovoltaic Industry Association: South African Renewable Energy Council: South African Wind Energy Association: South African partners are often local energy companies and representatives of residents. Typically, a community trust is established to represent the interests of the local community. Investment by black people into the renewable energy programme is not limited to community trusts. Pele Green Energy is engaged with a photovoltaic plant at Touwsrivier in the Western Cape as a shareholder and as a provider of construction management services. Once the facility starts generating power, Pele will operate and maintain the plant. Among the international investors active are Enel Green Power (Italy), Scatec Solar (Norway), Globeleq (UK), Mainstream Renewable Power (Ireland), Gestamp Renewable Energies and Abengoa (Spain), Solar Capital (Phelan Energy Group, Ireland), SunEdison (USA), ACWA Power (Saudi Arabia), China Longyuan Power Group (China), Engie (France), juwi Group (Germany) and Tata Power of India. The last-named company recently sold to partner Exxaro Resources its 50% stake in Cennergi, which owns two wind farms in the Eastern Cape. Partnerships with foreign utilities or power companies are becoming more common, in part because the competition is bringing down the price which bidders are offering to sell power. This makes it difficult for South African firms to compete on their own. Many foreign investors such as large national utilities have strong reserves of cash and do not need to borrow money. The bank created by the five nations of BRICS, the New Development Bank (NDB), has made 0-million available to Eskom to help it integrate power from renewable energy sources to the national grid. ■ SOUTH AFRICAN BUSINESS 2021 60

ICT Data centres are booming. OVERVIEW As South Africa joins the global trend towards online shopping and with the first networks rolling out 5G in 2020, data centres are going up all over the country. Teraco stores data in Johannesburg, Durban and Cape Town. A second 30MW site is under construction in Brackenfell to complement the existing facility in Rondebosch (pictured). Microsoft Azure has facilities in Cape Town and Johannesburg and Amazon has two sites in Cape Town. Huawei Cloud Services will use a partner company in Johannesburg to store its data. Africa Data Centre (ADC), part of the Liquid Telecom Group, has purchased a Tier IV data centre in Johannesburg, previously used by Standard Bank. A 2019 study by Microsoft found that the cloud ecosystem will create around 112 000 new jobs in South Africa by 2022 (IT Web). The number of permanent employees of Amazon Web Services reached 7 000 in October 2020. Acuity Consultants was quoted in 2019 as saying that software developers’ salaries had risen by 30% in a year (Business Times). A new entrant to the South African market relies entirely on the cloud. Uniconta, an enterprise resource planning (ERP) system for small and medium-sized businesses, opened its first offices in Cape Town in 2019, a precursor to plans to expand elsewhere in Africa. Cell C became South Africa’s third mobile operator in 2001, following MTN and Vodacom. Cell C was in the news early in 2020 when it defaulted on interest payments on a loan and this had an effect on the shares of Blue Label Telecoms, which owns 45% of the operator. When Cell C’s results were announced in October 2020, reference was made to a turnaround strategy. Telkom, which became the country’s fourth operator in 2010, intends selling its cellphone towers and masts (estimated to be worth about R12-billion) in order to invest in 5G. The Council for Scientific and Industrial Research (CSIR) in Pretoria will host a new body aimed at preparing South Africa for the Fourth Industrial Revolution (4IR), the South African ONLINE RESOURCES Business Process Enabling SA: Independent Communications Authority: Technology Innovation Agency: SECTOR INSIGHT Vodacom is rolling out 5G. Credit: Data Centre Map Affiliate Centre of the World Economic Forum. The Small Enterprise Development Agency (Seda) runs the SoftstartBTI ICT incubator in Midrand and Tuksnovation, a hightech incubator, at Pretoria University. Several incentives relevant to companies and educational bodies in the ICT sector are available from the Department of Trade, Industry and Competition (dtic). The Information Technology Association (ITA) is the trade and employer body of the Information Technology industry in South Africa. The ITA represents more than 200 companies which supply information technology equipment, systems, software and services. Members include IBM, Microsoft SA, Siemens, SAP and Axiz. ■ 61 SOUTH AFRICAN BUSINESS 2021

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