Building on an already substantial investment base, continued cooperation between local, provincial and national government could see an additional R1bn in direct investment pumped into Atlantis over the next five years.
In 2013, GreenCape and the Department of Trade and Industry (dti) signed a Memorandum of Funding Agreement to set up a project management unit to facilitate the establishment of a green technology Special Economic Zone (SEZ) in Atlantis. This work is a collaborative effort between GreenCape as the hosting agency, the City of Cape Town, Western Cape Provincial Government and the dti.
The proposed GreenTech SEZ supports the manufacturing sector to become suppliers and component manufacturers for clean technology, such as renewable energy components.
South Africa aims to generate 17,800MW of electricity from renewable resources by 2030. A significant share of the new electricity capacity is being developed and produced by Independent Power Producers (IPPs) through the government’s Renewable Energy Independent Power Producers Programme (REIPPP.) The proposed SEZ has a particular focus on tapping into the attractive local content opportunities created through this programme.
“The Western Cape is fast becoming a preferred destination for renewable energy and technology businesses and their investors. At least twelve new industrial manufacturing facilities, capable of supplying utility scale projects, have been established in the country in direct response to the REIPPPP, with the establishment of two more large manufacturing concerns in the pipeline. Of these, eight are in the Western Cape,” says GreenCape CEO, Mike Mulcahy.
GreenCape has reported investments in Atlantis totalling R680m over the past three years and says a further R1bn worth of new direct investments has been forecast for the next five years.
After an initial investment of R300m, Spanish owned Gestamp Renewable Industries (GRI) invested in a further expansion of its wind tower manufacturing facility. The company has already supplied 35 of its towers to the Noupoort wind farm in the Northern Cape.
The confidence in the Atlantis green tech hub is clear and expansions by Skyward windows and geotextile company, Kaytech have added an additional R50m and R130m respectively to investments in the region in the last financial year.
“The natural location advantages of Atlantis are being realised, the availability of large greenfield sites and an excellent transport network makes it the ideal location for the fabrication of large components like wind towers and blades. The success of this initiative is a true reflection of what can happen when all three levels of government pull together. Looking past the successes of the past financial year we believe a further R1bn investment over the next five years is not only achievable, but a conservative estimate,” says Mulcahy.
The Atlantis SEZ feasibility report, conducted by Stratecon, estimated that every Rand invested by national government returns R250 in GDP, R34 in tax income and R60 in foreign exchange.
Judging by the investments already attracted through relatively little investment by the Department of Trade and Industry the collective benefits of the focussed work being conducted by national and local governments into industrial development, such as the Atlantis SEZ, is already bearing fruit.
Manufacturing companies based in Atlantis have already benefited from the City of Cape Town’s Atlantis investment facilitation office and incentives.
Not only do large power users enjoy a reduced power tariff, but they also have access to a dedicated office to resolve any local municipal issues such as rates, services, zoning, and building plans. Added to this, Atlantis manufacturers can mitigate future load-shedding through a negotiated agreement with the Municipality. Eskom has also committed to increasing its electricity supply by a further 50% over the coming years, and construction on these upgrades is underway.
“Energy security is critical to the success of any SEZ, and the team has placed considerable effort and focus on this challenge. This is about more than just pricing certainty, it’s about production certainty which is vital for a company looking to compete in a global economy as mercurial as this one,” comments Mulcahy.
Women-owned businesses have also benefitted from the opportunities on offer in Atlantis.
Resolux Africa, a 51% black women owned company, set up a wind tower internal manufacturing facility in Atlantis adding an additional R25m to the investment pot. Resolux manufactures wind tower internals such as LED lights, stepladders, cables and fasteners to supply GRI and others in the renewable energy space.
More than 300 direct jobs have been created in Atlantis in the last two years, which has had a significant impact on the local community. This has been augmented by a concerted local skills development programme which includes high-level welding and solar PV instillation training.
“The investment future is bright. Infrastructure like the MyCiti bus, Fibre optic cable, road upgrades and electricity upgrades combined with good governance, readily available skills, attractive financial incentives and energy security make for a powerful convergence of opportunities. These factors, added to the clear cooperation and alignment across the three layers of government, and the fact that the project is an extremely efficient government spend to create jobs and economic value and already showing notable results, create a compelling investment opportunity in GreenTech,” Mulcahy concludes.