Growthpoint Properties, South Africa’s premier real estate investment trust (REIT), is set to revolutionize the commercial real estate market with its groundbreaking initiative, the e-CO2 green energy benefit scheme.
This innovative program will be implemented at ten properties in Sandton, Johannesburg, marking a significant milestone in the country’s renewable energy landscape.
Growthpoint is positioning itself as a leader in the field by launching this new offering, which will debut in July 2025.
Details of the Renewable Energy Scheme
The e-CO2 scheme represents a major leap forward in South Africa’s transition to clean energy. Through this initiative, Growthpoint will provide green energy to its office buildings using a process known as wheeling.
This involves transferring electricity from multiple renewable sources—such as water, wind, and solar—directly to commercial properties.
Growthpoint’s Power Purchase Agreement (PPA) with Etana Energy underpins this scheme, ensuring the delivery of green energy and generating Renewable Energy Certificates (RECs) for tenants, facilitated by advanced blockchain technology.
Pioneering Partnerships and Power Agreements
In late 2023, Growthpoint secured a landmark PPA with licensed electricity trader Etana Energy.
This agreement will enable the transmission of electricity generated by independent power producers to Growthpoint’s buildings across the country.
Wheeling allows for the exchange of sustainably sourced electricity over long distances, addressing the challenge of limited roof space for on-site renewable energy production in central business districts.
The agreement includes the purchase of approximately 30 GWh of electricity annually from a hydroelectric power plant operated by Serengeti Energy.
This plant, situated on the Ash River in the Lesotho Highlands Water Scheme, is expected to commence operations on July 1, 2025.
From 2026 onwards, additional wind and solar energy will be integrated into the grid, with potential for further sources to be added in the future.
Growthpoint’s Commitment to Sustainability
Paul Kollenberg, Growthpoint’s Head of Asset Management for Offices, highlighted the significance of the agreement in securing 195 GWh of clean electricity annually.
This move aligns with Growthpoint’s decade-long focus on environmental, social, and governance (ESG) strategies and underscores its commitment to sustainability.
Growthpoint aims to achieve carbon neutrality by 2050 and is investing heavily in sustainable practices to set an example for other businesses and support long-term cost savings for its clients.
Benefits and ESG Impact for Businesses
The e-CO2 scheme offers numerous benefits to participating businesses. By using clean, wheeled power, companies can more easily meet their ESG targets, as at least 70% of their electricity will come from renewable sources like wind, hydro, and solar.
Some businesses may even opt for 100% renewable energy. Werner van Antwerpen, Head of Corporate Advisory at Growthpoint, noted that opting into the e-CO2 scheme provides access to certified RECs for ESG reporting and can significantly reduce Scope 2 emissions, which include indirect emissions from electricity use.
The scheme also provides financial advantages. The cost benefits from the PPA are passed on to tenants, resulting in savings on electricity costs.
Tenants will see a difference between the full electricity price increase imposed by local municipal authorities or Eskom and a fixed escalation rate for renewable energy costs, leading to long-term savings.
These savings increase with the length of the tenant’s lease.
Initial Rollout and Future Expansion
Initially, the e-CO2 green energy benefit scheme will be available for new leases or renewals at select properties in specific jurisdictions within Growthpoint’s portfolio.
The first properties to participate in this scheme are located in Sandton and include prominent buildings such as 138 West Street, The Annex, and Fredman Towers.
Growthpoint plans to expand the scheme over time to include more properties and locations.
Conclusion
Paul Kollenberg expressed pride in the e-CO2 initiative, emphasizing the collective effort of Growthpoint’s team, partners, and stakeholders in making this innovative project a reality.
The initiative not only benefits Growthpoint’s tenants but also contributes to a more sustainable future for South Africa.