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Arrowhead makes headway in its solar power rollout

JSE-listed property fund welcomes the government’s planned easing of licensing regulations around independent or private renewable energy projects.
The Aviary in Lynnwood Glen, part of Arrowhead’s commercial property portfolio. Image: Supplied

The solar power rollout plan by diversified South African real estate investment trust (Reit) Arrowhead Properties to install 10 megawatts (MW) of electricity through on-site solar power plants at its properties is well on track, says COO Riaz Kader.

The group, which has a portfolio of retail, office and industrial properties in the country’s major metros valued at around R9.3 billion, has already installed 7.3MW of generating capacity.

“We’re investing around R170 million into our renewable energy initiatives. A significant part of this has already been invested, but the rollout will continue over the next 12 to 18 months with 3.6MW currently under construction,” Kader points out.

“Once all 21 of our solar power plant projects are fully operational, these will generate a total of approximately 16 million kilowatt hours per year.

Sustainability

“Considering the impact of Eskom load shedding, our solar power initiatives add commercial sustainability to our properties. However, it will also boost Arrowhead’s ‘green’ credentials from an all-important ESG [environmental, social and governance] perspective,” he adds.

ESG is becoming a key additional measure of performance in the corporate world, especially with concerns around climate change and environmental sustainability.

Kader says the solar power plants will not only make Arrowhead less reliant on Eskom and reduce the fund’s exposure to the risks of load shedding but will also allow it play its small part in reducing the strain on Eskom, thus allowing the utility to focus on stabilising the national power grid.

He welcomed the government’s recently-announced plans to ease licensing regulations around independent or private renewable energy projects.

“We believe President Cyril Ramaphosa’s announcement around increasing the licensing threshold, from the proposed 10MW to 100MW for independent power projects [IPPs], is a good move and will bolster the rollout of and investment into renewable energy,” he notes.

According to Arrowhead utilities manager Elmarie Engelbrecht, solar energy generation as a percentage of the fund’s total energy use across the portfolio was just over 4% as at its recent half-year period (to the end of March 2021).

“Our medium-term ambition will be to achieve a sustainable energy generation target of 8%.

“Besides load shedding, unsustainable energy costs and increases from Eskom have been a big driver of our investment into solar,” says Engelbrecht.

“Using solar renewable energy also means that we have a lighter environmental footprint. Most of our solar power projects are either via rooftop solar or other embedded solar initiatives.

Water resources

“Arrowhead is exploring further alternative energy generation and water resources to embed environmentally-friendly business operations into our core portfolio. While our renewable energy initiatives, through the roll-out of solar power plants, has gained a lot of traction, the company is also committed to water sustainability measures.”

Engelbrecht says that water projects take longer to finalise as these are dependent on each property’s location and specific circumstances.

The group has already implemented a couple of groundwater harvesting and backup water solutions at its properties.

“We started looking at sustainable water solutions simultaneously with our move to solar a few years back. Water projects are not as straightforward, but we are committed to implementing both renewable energy and water innovations,” she notes.

Vertical renewable energy

Kader meanwhile adds that the group is also exploring a vertical renewable energy generation technology, which would involve generating power from the sides of its office buildings.

“Arrowhead has strategically partnered with three market-leading renewable energy service providers in order to continually push the boundaries on this front and achieve its renewable energy goals,” he adds.

He says the renewable energy drive is “in complete alignment” with the group’s broader ESG objectives and a target to improve its overall ESG rating.

Brought to you by Arrowhead Properties.

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