SOUTH AFRICA – South Africa’s biggest private hospital group by market value, Mediclinic, has inked a deal for up to £110m (R2.2bn) in local renewable energy, part of its commitment for carbon neutrality by 2030.
The company did not divulge the volume of power to be sourced from Energy Exchange, but said the move was part of its ambitious goal of becoming carbon neutral by 2030.
South Africa, the continent’s worst polluter, emits millions of tonnes of carbon dioxide into the atmosphere each year, much of it from coal-fired power plants that still provide most of its energy.
Climate considerations have become a greater concern for investors, with some pulling out of local multibillion-dollar coal-fired power plant projects and halting direct funding.
Companies are also trying to curb their reliance on ailing state utility Eskom, which regularly implements electricity outages.
Energy Exchange is an aggregator that allows independent power generators in the country to sell renewable energy for use by industrial and commercial entities.
Mediclinic CEO Ronnie van der Merwe said all divisions of the hospital group were taking steps to reduce their electricity consumption in what would lead to “improved operational efficiency of technical installations, the introduction of various new energy-efficient and renewable technologies, and changes in employee behaviour regarding energy use”.
Remgro, the investment company chaired and controlled by Johann Rupert, is a shareholder in Mediclinic, and is also one of the founding partners of Energy Exchange.
Since Remgro owns a 35% stake in the company, the agreement is subject to scrutiny by the Financial Conduct Authority.
Energy Exchange, whose board of directors is chaired by Phuthuma Nhleko, the former CEO and executive chair of the MTN Group, describes itself as a leading aggregator of electricity across a technology-diverse range of generators.
Companies across various sectors have taken to renewable energy as a means of overcoming the supply challenges faced by the state-owned power utility, Eskom, and several mining firms have moved to start generating their own solar power.
Self-generation by private entities received a boost early this year, when the government lifted the threshold for companies to produce their own electricity without a licence from 1 MW to 100 MW.
Mediclinic said the agreement with Energy Exchange is set to have economic benefits, given that annual tariff increases were expected to be inflation-linked.