Region
North West
South Africa

Sector
Alternative Energy
Energy
Environment & Waste

Summary:

Invest North West, the official trade and investment promotion agency for the North West Province, invites you to invest in one of South Africa's fastest-growing provinces. Join other international and local major corporations by choosing the North West Province (NWP) as the preferred establishment destination for your new business venture.

Contact
Hantie Hoogkamer

Email
hantie@inw.org.za

Tel
+27 14 594 2570

Invest North West, the official trade and investment promotion agency for the North West Province, invites you to invest in one of South Africa's fastest-growing provinces. Join other international and local major corporations by choosing the North West Province (NWP) as the preferred establishment destination for your new business venture.

The strategic intent of Invest North West (INW) is to provide vision and direction to key growth sectors within the North West Province (NWP). This is achieved by focusing on investment promotion, trade and investment facilitation, and the provision of proactive business retention and expansion services to established local and international businesses. Committed to providing the highest standard of service, the following value-added services are provided by INW to new and existing investors in the province:

• Identifying and packaging viable investment opportunities
• Facilitating joint venture and equity partnerships 
• Providing information on financing options and investment incentives
• Providing advice on feasibility studies and business plans
• Assisting investors to obtain work and business permits 
• Providing assistance in obtaining suitable land or factory space
• Assisting existing firms to expand and re-invest
• Assisting companies to find export markets for their products

South Africa's North West Province, also known as the 'Platinum Province', is centrally located between Botswana to the north, the financial capital of Africa, Gauteng to the east, and three other provinces - Limpopo, Free State and Northern Cape on its other borders. The North West has abundant mineral resources, a well-developed infrastructure, thriving agricultural and manufacturing sectors and a fast-growing services industry.

The North West Province economy is still dominated by mining but poised for growth across the board. The province is the richest in the country in mineral production, which contributes 38.4% to Gross Value Added Regional (GVA-R). Mining in the North West contributes 2.6% to national GDP with its gold mines producing some 19.3% of the nation's output. Production of platinum group metals (PGMs) is even more impressive – some 64% of the nation's total. As by-products of PGM mining, all the country's cobalt and most of its nickel are produced in the North West. Mining provides 28.7% of employment in the province and 26.2% of all labour remuneration. 

Community services, including government, is the second largest sector, contributing 18.6% to and accounts for 21.8% of employment opportunities in the sector followed by finance which currently contributes approximately 13% to GVA-R and 5% of employment.

Economy
Trade ranks fourth with 10.7% of GVA-R and 12.9% of employment, while the transport sector contributes 7.8% to GVA-R and 2.9% of employment. 

Although the manufacturing sector in the NW Province has not yet reached its pre-crisis output levels, it is fairly well diversified and currently contributes 5.3% to GVA-R and accounts for 5.2% of all employment opportunities. Averaging an annual growth rate of 3% in 2010, the sector in the Province is very dependent on the performance of a few industries (food and beverage, fuel and chemicals, fabricated metals and non-metallic metals industries) in which the province enjoys a competitive advantage.

Agriculture is an important sector in the NW Province contributing about 3% to GVA-R and providing for approximately 8.9% of employment opportunities in the province. 

The Province accounts for about a third of the nation's maize crop and 40% of total sunflower seed production. It also produces over 10% of the nation's cattle, goats, pigs and milk. Structurally, the profile of the provincial economy has changed slightly over the past few years and is beginning to mirror the national economy.

In this regard, consumption-driven sectors (financial intermediation, insurance and real estate, transport, storage and communication, wholesale and retail, catering and accommodation) do not also contribute more to GVA-R but is also growing at a higher rate than production sectors (agriculture, mining, manufacturing, electricity, water, and construction). 

The province needs to diversify its economy more as the primary sectors are particularly vulnerable to external factors such as changes in the global economy and poor weather. As a result, the outlook for mineral beneficiation, manufacturing, the automotive industry, biofuels, financial services and tourism is encouraging.

Renewable energy  
The growing awareness that climate change has direct impacts on human health, sea levels, global weather patterns and ecosystems and hence the future of all life on earth, has stimulated South Africa to adopt renewable energy (RE) options. South Africa is currently the 14th largest greenhouse gas emitter in the world, a reflection both on the country's heavy reliance on coal and energy inefficiencies. 

The White Paper on RE (2003) has set a target of 10 000GWh of energy to be produced from RE sources (mainly from biomass, wind, solar and small-scale hydro) by 2013 (5% of total electricity). The target was confirmed to be economically viable with subsidies and carbon financing. Achieving the target will:

• Add about 1.667MW new RE capacity, with a net impact on GDP as high as R1.071 billion a year
• Create additional government revenue of R299 million 
• Stimulate additional income that will flow to low-income households by as much as R128 million, creating just over 20 000 new jobs
• Contribute to water savings of 16.5-million kilolitres, which translates into a R26.6-million saving

Additionally, the failure to fulfil the increasing electricity demand and the escalating electricity prices is providing incentives for RE and carbon management options which also usually results in improved efficiencies and significant cost savings. 

The sustainable development vision of the NW Province is the elimination of poverty and deprivation, the conservation and enhancement of the natural resource base, and a broadening of the concept of development with the integration of social, economic and environmental considerations in decision making at all levels (North West Province State of the Environment Report). 

In terms of energy demand, mining is the greatest consumer of electricity in the Province using 63% of electricity supplied to the Province, however, nearly 20% of the population in the NW Province does not have access to electricity.

Renewable energy opportunities

Municipal waste
One route for the enhanced delivery of services (energy, water, sewage) is to synergise these development plans so that cost-reduction and increased efficiency is obtained, for example: 

• Agricultural manure and sewage can be used to generate methane-rich biogas with an energy potential of 199 MW
• The municipal solid wastes (MSW) have an energy potential of 304 MW and can be used to produce energy either through combustion to electricity, biogas (landfill gas) or using biomass-to-liquid Fischer-Tropsch technology

Energy from biogas is appropriate for households, agriculture, SMME, municipalities, industry and mining with the added benefit of reducing the costs of treating wastes that may translate into improved efficiency of municipal services and additional environmental benefits.

Wind power
Wind power is most applicable for the agriculture and SMME sectors. Wind power is feasible for some parts of the province where average wind speeds are greater than four metres per second. Wind pumps are also an attractive option to enable irrigation of crops, which is often necessary for many parts of NW that receives little rainfall, but this may increase soil degradation through salinisation. The pumping of water can enable the storage of the wind power potential energy that can be recovered through hydroelectric, thereby increasing the capacity factor of the renewable energy supply. 

Off-grid solar strategies for rural areas
Mini grids or off-grid strategies and hybrid technologies will be the most appropriate options for supplying RE to many rural communities and cottage industries, mainly because of the limitation in the electricity transmission grid and the fact that the majority of people live in rural areas (approximately 65%).

Solar technologies
There is favourable solar insulation space to install solar energy technologies. 

• The application of domestic solar water heaters (SWH) has the greatest benefit with consideration of the energy return per unit cost with little environmental detriment or changes in land use. 
• The application of concentrated solar power (CSP) and concentrated solar thermal (CST) are appropriate for industry, mining and municipalities.
• The application of photovoltaic cells (PVs) for electricity is appropriate mainly for households, but agriculture, SME, municipalities and industry can also benefit. 

The greatest potential for solar is in the western parts of the province (more land availability and higher solar insulation), but the lack of a mainline transmission grid will limit large-scale CSP projects that aim to feed-in to the electricity transmission grid.

Exporting

South Africa participates in a number of preferential trade relationships, both regional and bilateral. It is a signatory of the General Agreement on Tariffs and Trade (1947) (GATT), which is managed by the World Trade Organization (WTO). 

South Africa is committed to the principles of these organisations, and to increasing South Africa's global competitiveness. Tariffs have been reduced, and non-tariff barriers are being phased out. 

South Africa and the North West Province have placed greater importance on forming strong economic trading blocks to gain access to key markets. The South African government has actively pursued negotiations for an agreement on trade, development and co-operation with the European Union (EU). This agreement will pave the way for developing secure markets in the EU for SA businesses. 

South Africa has also turned its attention to pursuing agreements for greater South-South co-operation. The move to establish trade relations with Mercusor via a free trade agreement with Brazil and India, is top of the government's export-oriented trade agenda. This will facilitate greater trade with South America and the East.

South Africa's participation in the Southern African Development Community (SADC), comprising 14 sub-Saharan African countries, allows access to a market of approximately 170 million, which is expected to grow at an annual rate of around 3%.

For more information on these investment opportunities contact Invest North West:

Hantie Hoogkamer – investment facilitation manager: renewable energy

Tel: +27 14 594 2570
Fax: +27 14 594 2575/6
E-mail: hantie@inw.org.za
Website: www.inw.org.za