Growthpoint Properties (JSE: GRT), the South Africa’s leading real estate investment trust (REIT), is set to launch a certified renewable energy program for its office buildings.
This initiative marks a significant milestone in the country’s renewable energy transition.
Growthpoint’s innovative e-CO2 green energy benefit scheme will debut at ten properties in Sandton, Johannesburg. Set to launch in July 2025, the program aims to deliver green energy through wheeling, significantly reducing carbon footprints and generating Renewable Energy Certificates (RECs) for tenants using advanced blockchain technology.
The e-CO2 scheme, short for “electricity minus carbon dioxide” and pronounced “eco two,” will source renewable energy from water, wind, and solar power. This is made possible through a Power Purchase Agreement (PPA) with Etana Energy, signed at the end of 2023. The agreement allows Growthpoint to wheel electricity generated by independent power producers to its buildings across South Africa.
Growthpoint has secured exclusive rights to purchase 30GWh of clean electricity annually from a hydroelectric power plant developed by Serengeti Energy on the Ash River within the Lesotho Highlands Water Scheme.
This plant will generate 24/7 baseload power, ready for operation by July 2025. From 2026, additional wind and solar energy sources will be integrated into the grid, with potential for further expansion.
Paul Kollenberg, Head of Asset Management: Offices at Growthpoint Properties, emphasizes the importance of this initiative in their sustainability journey. Over the past decade, Growthpoint has prioritized environmental, social, and governance (ESG) strategies, aiming to be carbon neutral by 2050.
The e-CO2 scheme reflects this commitment, providing a model for sustainable business practices and long-term cost savings for clients.
Businesses participating in the e-CO2 scheme will benefit from receiving at least 70% of their electricity from renewable sources. Select businesses may opt for 100% renewable energy, further supporting their ESG targets.
Werner van Antwerpen, Head of Corporate Advisory at Growthpoint, highlights the added value of certified RECs, which can be used for emission reduction reporting or traded on the open market.
Tenants will experience reduced electricity costs, benefiting from the difference between local authority or Eskom price increases and a fixed escalation rate for renewable energy costs over the lease duration.
Although the scheme doesn’t directly shield against load shedding, it contributes to increased generating capacity in South Africa’s electricity network, reducing long-term load shedding risks.
The e-CO2 scheme will initially be available for new leases or renewals in specific jurisdictions and select buildings within Growthpoint’s portfolio. The first buildings to benefit are located in Sandton, including 138 West Street, The Annex, The Place, Fredman Towers, The Towers, Grayston Office Park, Sandown Mews, 12 Alice Lane, Advocates Chambers, and Pinmill Farm.
“We are incredibly proud of this innovative initiative, made possible by a visionary team, dedicated partners, and many passionate and talented people over a number of years. It not only benefits the immediate occupants of Growthpoint’s properties but helps to create a brighter and more sustainable future for South Africa,” concludes Kollenberg.
