Asides

Since its launch in 2014, Grit Real Estate Income Group has managed to attract an impressive number of investors and partners, with a winning strategy. Following its introduction to the Stock Exchange of Mauritius and the Johannesburg Stock Exchange, Grit has reached new heights by becoming the first Mauritian-based company to be registered on the Main Board of the London Stock Exchange. The CEO and co-founder, Bronwyn Corbett, reveals the strengths that make Grit a trusted and indispensable partner in the real estate industry.

Q: You have recently been registered on the London Stock Exchange (LSE). Tell us more about your business and what attracted you to the bourse.
A: Our listing on the main market of the London Stock Exchange represents a step-change in the business that will position the company for significant growth and exposure. The capital raised from the LSE listing will enable our entry into new African territories and consolidate our presence in existing jurisdictions. It will also improve the depth and diversity of our shareholder base, and improve the liquidity of the stock, resulting in the inclusion in varied indexes – specifically the FTSE Frontier Index and MSCI Frontier Index. We are proud to bring our passion and vision for Africa to London.

Grit launched in July 2014 and is the largest pan-African listed real estate company offering investors direct exposure to attractive and sustainable hard currency income streams underpinned by prime real estate assets and long leases to blue-chip international and national tenants. Our focus is on selected African countries with solid fundamentals and high-growth opportunities. We currently operate in seven countries on the continent, including Kenya, Morocco, Mozambique, Zambia, Mauritius, Botswana and Ghana.

As a result, Grit is unbiased as far as real estate asset classes are concerned. We evaluate risk based on tenant strength, in addition to country and property fundamentals, such as the economic growth rate, location and nodal development.
This means we will acquire and hold assets across the spectrum, including commercial offices, retail centres, corporate accommodation, hospitality, light industrial warehousing and logistics centres, provided that it ticks the boxes from a fundamental perspective (right node, right quality, right price and so on), and that a long lease with a reputable international tenant is in place.

Bronwyn Corbett, CEO of Grit Real Estate Income Group

Q: Why expand into the rest of Africa when most of your listed, South African counterparts have tapped into Eastern Europe? What attracts you to these markets and how do you identify targeted jurisdictions?
A: We originally considered various options but something we kept coming back to was our passion for the continent. It’s no coincidence that the company is named Grit because unless you have infinite passion, perseverance and believe in what you are doing, the challenges will very quickly wear you down. We knew that our knowledge, networks and belief in the African growth story is our biggest differentiator and something competitors will not easily replicate.
Collectively, the four senior members of our executive team have more than 65 years of property experience on the continent.

Although each country presents a different investment thesis, we apply several considerations as standard practice when looking at expansion opportunities. These margins of safety include the ability to earn and repatriate hard currency; political and macroeconomic stability; land tenure; and the ability to raise debt.
In addition to this, the strength of the tenant plays a critical role as some of our leases are underwritten by the international parent company.

Q: Tell us more about your recent acquisitions and pipeline transactions.
A: Ghana was, some time ago, earmarked as an expansion country, based on its strong fundamentals. We have been monitoring Ghana’s economic reform with interest since 2014. The real estate market repriced sufficiently for us to expand our portfolio with the acquisition of 5th Avenue Corporate Offices, a three-storey, fully let 5 070 m2 GLA A-grade office complex in the upmarket Cantonments quarter of the capital, Accra.

There is a strong political will to implement REIT legislation in Ghana, which will allow further tax-efficient structuring as well as access to local capital looking for a unique investment offering.

Post the London Stock Exchange listing, we will conclude a number of agreements that have been signed or are in advanced discussions for an additional three commercial buildings in Accra as well as a corporate accommodation asset in Mozambique under-pinned by us.

Q: What potential do you see in sub-Saharan Africa for future growth for the company?
A: A fairly recent study by the Economist Intelligence Unit found that institutional investors now regard the emergence of Africa’s middle class and its growing consumerism – rather than its commodities –as the most attractive aspect of investing in the continent.

Using the theory of purchasing power parity (an economic concept used to determine the relative value of different currencies) and considering the relative prices of non-tradable goods in different countries, Africa is estimated to grow by 30% over the next five years, compared to 10% in other more developed regions.

PwC, in a 2015 report titled Real Estate: Building the Future of Africa, noted that Africa’s retail market is fast developing. This is supported by the continent’s buying strength, which is expected to increase from US$860 million in 2008 to US$1.4 trillion by 2020. Our real estate strategy will be defined by the needs of the African people and the required presence for international corporates on the continent.

Q: What will shape real estate on the African continent over the next 30 years?
A: The largest opportunity also poses the largest threat: rapid population growth will require infrastructure and nodal development apace, necessitating collaboration – not only through public-private-partnerships but also between developers, landlords, tenants and especially, providers of capital. This means real estate opportunities will vary from country to country, and node to node.

In Nairobi, for example, logistics and warehousing assets are outperforming other asset classes by some margin.

Our experience in Zambia has demonstrated that large convenience retail centres in rural areas outperform urban regional shopping centres that have a more traditional mix of luxury and entertainment.

From Grit’s perspective, we will continue to partner with our tenants to provide appropriate accommodation that’s the right fit for them, regardless of asset class.

Q: What potential is there for future retail developments in sub-Saharan Africa, excluding South Africa? Is the market largely untapped, or do you think enough headway has already been made to make the market open and responsive?
A: Significant construction activities in respect of shopping malls are under way in Africa. In Lagos, 10 were under construction at the time PwC released its aforementioned report.

More than 60% of sub-Saharan Africa’s bullish economic growth is attributable to the region’s consumer spending, and most of the world’s biggest consumer goods companies are already operating in Africa. An analysis of major South African retailers expanding into Africa showed that growth in turnover of their African operations were often three times more than in South Africa.

As mentioned earlier, real estate on the continent is still in its infancy. Developers have also learnt that Africa is not a ‘one-size-fits-all’ destination, and what works from a retail perspective in one country won’t necessarily work in another.

Looking ahead, we expect to see rapid growth in both depth and sophistication, especially as regulatory changes and the introduction of REIT status stimulate investments into the asset class.

3rd floor, La Croisette Shopping Mall,
Grand Baie, Mauritius
Tel: +230 269 7090
Email: [email protected]

 

iWayAfrica, a pan-African service provider of telecommunications solutions across Africa, has signed the first Hylas-4 master distributor contract with Avanti Communications, to provide satellite broadband services across sub-Saharan Africa.

The master distributor contract allows iWayAfrica to use the latest Ka-band technology provided by Avanti’s Hylas-4 satellite, which has widespread coverage of sub-Saharan Africa. iWayAfrica will provide affordable high-speed satellite broadband to connect homes, SMEs, schools and enterprises across the region, especially in rural and remote locations where terrestrial networks are limited.

Avanti Communications Group, a leading satellite operator, provides Ka-band data communications services across the UK, Europe, the Middle East and Africa. Building on the success of its previous high-throughput satellites, Avanti’s third satellite, Hylas-4, was launched in April 2018 and is scheduled for commercial service over sub-Saharan Africa from August. Operating with 64 beams from five ground earth stations, Hylas-4 significantly extends Avanti’s coverage to West and Central Africa for the first time.

Michèle Scanlon, MD of iWayAfrica’s VSAT wholesale services division

As a wholesale VSAT provider, iWayAfrica has worked successfully with Avanti since 2014 for its Hylas-2 services in East and Southern Africa. Its appointment as master distributor is a natural extension of the two parties’ existing relationship, bringing even faster broadband services to the rest of Africa. The company has regional offices in Ghana, Kenya, Mauritius and South Africa. ‘With Hylas-4, we are excited to take Avanti’s high-speed service plans to West and Central Africa for the first time. We are actively engaged with our partner network to bring these services online, as well as extending our reach in the region even further to new partners and new territories,’ says Michèle Scanlon, MD of iWayAfrica’s VSAT wholesale services division.

Ka-band satellite services have been designed to deliver high throughput and high-speed meeting the expectation and user experience of today’s demanding broadband customer. Most installations only require a small 74 cm antenna thus reducing the equipment and installation costs associated in the past with broadband via VSAT.

iWayAfrica launched its JOLA broadband service in December 2016 for sub-Saharan Africa bringing flexibility and affordability on Ku-band service plans on IS-28 for consumer and SME segments. JOLA Ka is an extension of those same key service elements of delivering broadband happiness to Africa. ‘With a range of service plans including capped and uncapped with download speeds of up to 35 Mbps and upload speeds of up to 4 Mbps, JOLA Ka has an affordable and reliable option for every type of broadband user,’ says Scanlon.

iWayAfrica offers its partners competitive wholesale rates, sales and marketing support with lead generation, installation training and accreditation, a 24/7 network management centre and access to a dedicated distributor partner portal access. It is part of Gondwana Inter­national Networks (GIN), a pan-regional telecoms investor with corporate ISPs across sub-Saharan Africa that trade as iWayAfrica or AfricaOnline. The group was among the first companies on the continent to embrace the benefits of satellite-based communication and then, driving penetration on the back of the subsequent internet revolution.

GIN’s service offerings are diverse and cover both satellite and terrestrial connectivity solutions and other types of data and value-added services. The group’s service portfolio evolves constantly to address changing market demands and technological advancements. Satellite services include C-, Ku- and Ka-band solutions, while its terrestrial services vary across markets, including licensed and unlicensed wireless, copper, fibre, cellular and WiFi services.

Installation training and accreditation are included in iWayAfrica’s broad range of satellite broadband services

As elsewhere in the world, Africa is seeing an increasing reliance on internet connectivity for all aspects of working and social lives, with governments striving for new digital economies and its associated economic benefits. Yet in Africa, huge coverage gaps, poor quality of service connectivity and high equipment costs remain constraints on ability to drive market penetration. Satellite is a key element of the GIN approach to unlocking connectivity on the continent where more than 70% of the population remain unconnected despite large investments in fibre and other terrestrial services.

With at least 25 years of providing high-end satellite services across Africa to telecoms operators and enterprise customers via its partner network more than 44 markets, iWayAfrica has earned its reputation as a quality provider of services evidenced by its customer base and its consistent industry awards for VSAT operator of the year and best customer service provider of the year.

Tel: Ghana +233 201 699 999
Kenya +254 20 444 0317
Mauritius +230 26 393 22
South Africa +27 86 100 1180
[email protected]
www.iwayafrica.com/partners

 

In a recent interview, Lindiwe Mekwe, acting CEO of Petroleum Agency South Africa (PASA), says that the oil and gas industry has the potential to become one of the top contributors to South Africa’s GDP within the next two decades or so.

This, however, requires that the country attracts sufficient exploration leading to good discoveries, and is based on the assumption that regulatory issues will have been resolved.

‘Oil and gas development is, however, still in the exploration phase if you compare it with the established state of the minerals industry,’ says Mekwe.

Interpretation of geological and geophysical data suggests that South Africa has potential for major oil and gas discoveries both on- and offshore. Current proven reserves offshore include the gas and condensate fields off Mossel Bay (F-A and E-M fields), which have been in production for decades, and new proven reserves in the F-O gas field. Off the west coast, there are proven gas reserves in the Ibhubesi gas field, where Sunbird Energy, together with partner PetroSA, is planning a development that will include a small-scale LNG plant.

Onshore, there are proven reserves in gas fields operated by Tetra4 in Virginia (Free State province), currently being used to fuel a local bus network. Coal-bed methane has also been discovered in the Waterberg region of Limpopo by Anglo as well as by Badimo Gas and partners Kinetiko Energy, near Amersfoort, Mpumalanga.

Lindiwe Mekwe, acting CEO of Petroleum Agency South Africa

PASA’s role is to regulate these and other such operations on behalf of government, and to perform the major functions of promotion of investment in exploration; regulation of exploration and production activities; and archiving and distribution of geological and geophysical data to would-be explorers. ‘It’s only through this data that we’re able to determine and process how much onshore and off-shore resources may exist, advise on investment and help mitigate risks,’ says Mekwe.

There is an excellent case to be made for investment in South Africa’s burgeoning oil and gas exploration and production sector, with shale gas representing a major opportunity. The US’ Energy Information Administration (EIA) has reported that South Africa has some of the largest potential shale resources in the world in the Karoo geological basin. The EIA has reported a potential shale gas resource of 380 trillion cubic feet (Tcf), while PASA’s own estimates are 205 Tcf.

The recent discoveries of major gas deposits off both Mozambique and Tanzania also send a very positive message for the east coast. The deepwater areas of the west and south coasts are completely unexplored and may hold vast potential.

However, there are challenges that PASA faces in attracting qualified explorers to South Africa. One of these is the delay in the finalisation and enactment of the new Mineral and Petroleum Resources Development (MPRD) Amendment Bill. PASA expects that a recent announcement by Minister of Mineral Resources Gwede Mantashe will speed up the enactment of the bill, which is with Parliament before being presented to President Cyril Ramaphosa for sign-off.

Regulatory uncertainty has resulted in a slowing down of exploration activity over the past few years, which has been exacerbated by the dramatic fall in the oil price. Exploration companies that have made discoveries have also been loath to proceed to production or struggled to fund development operations while the impact of the regulatory environment on their operations has been uncertain. Finalisation of the bill should revitalise the industry, just as the oil price is recovering.

Another major challenge for the industry in South Africa is the lack of infrastructure such as subsea and overland oil and gas pipelines. In countries with a mature oil and gas sector, established infrastructure makes development costs far lower and monetisation of discoveries far less of a hurdle. However, the South African government is committed to developing oil and gas infrastructure over the next 10 to 15 years.

South Africa is not known as an oil and gas-producing country, such as the likes of Angola or Nigeria. There is risk associated with exploring for oil and gas in an area such as South Africa where the geology is not as conducive to oil and gas formation and trapping, and this presents a further challenge to explorers.

South Africa’s oil and gas sector has the potential to emerge as a top contributor to the country’s GDP

The current fiscal regime applicable to oil and gas exploration as well as production recognises this risk and comprises fees related to exploration, corporate income tax, royalties, fiscal stability agreements, and payments to the Upstream Training Trust.

The trust is an NPO that contributes towards the development of scientific and engineering capacity in South Africa for the upstream petroleum industry through investment in the development of young people, with a specific focus on historically disadvantaged individuals. The agency was instrumental in creating the trust, as well as in its inclusion in oil and gas exploration agreements, and sees its activities as an imperative for transforming the industry. Transformation of the industry is high on PASA’s agenda and it is working closely with both the industry and government to achieve a more balanced approach to participation and ownership.

Traditionally, the oil and gas business and the energy business in general, has been and remains a very male-dominated domain. The agency would like to see this change and supports initiatives such as Women in Oil and Energy South Africa, and the American Association of Petroleum Geologists’ Professional Women in Earth Sciences.

While there are now more women involved in the industry locally, it is by no means representative, and so Mekwe calls on her male counterparts to recognise the potential of women, particularly in the executive realm.

In today’s world, oil and gas are arguably the most critical energy resources, and PASA is in total support of those entering the South African oil and gas exploration and production industries. The agency is fully committed to ensuring that the government and policy-makers sustain the sector for the benefit of all involved and will do everything in its power to advance the industry.

Tel: +27 (0)21 938 3500
Fax: +27 (0)21 938 3520
[email protected]
www.petroleumagencysa.com

 

CAPTIONS:

Lindiwe Mekwe, acting CEO of Petroleum Agency South Africa

South Africa’s oil and gas sector has the potential to emerge as a top contributor to the country’s GDP

Business in Africa is synonymous with mining, which forms the backbone of the economy of many countries on the continent. Not only is it considered one of the biggest catalysts for development in many African nations, but is also a source of employment and global trade exchange.

In 2017, South Africa’s Chamber of Mines estimated that the country’s mining sector constituted 6.8% of its economy. The mines in South Africa employed a total of 464 667 people by the third quarter of 2017, up from 457 290 at the end of 2016 – largely thanks to industrial minerals such as iron ore, chrome, coal and manganese.

So despite a challenging period – the release of the reviewed Mining Charter, industry unrest, monopoly and unethical business practices – South Africa’s mining industry is persevering, ‘helped by a gradual, improvement in the world economy’.

Mining-related companies and suppliers have also had to adapt to these conditions. One company that is flourishing and making a difference in the mining industry is Invincible Valves, which supplies locally manufactured and imported valves and accessories for a range of sectors, including the mining, petrochemical, power generation, water, sewerage and general industries.

Under the leadership of MD Pam du Plessis, the firm is seeking to grow through diversification – enhancing its existing products and introducing its own range of valves, Inval, which she describes as ‘a quality product with a price acceptable to the market in this day and age’.

Pam du Plessis, MD of Invincible Valves

Du Plessis, as a female entrepreneur in a predominantly male industry, is proud of the strides the company has made. Her contribution to the industry has helped her earn numerous recognitions, including the prestigious 2017 Enterprising Women of the Year and Moving Mountains 2017 awards. She was also recently named as one of the 30 most daring CEOs in business by Insight Success magazine.

AN INNOVATIVE VALVE COMPANY
Established in 1982 and located in Germiston, on the East Rand, Invincible Valves has almost four decades of experience in distributing, manufacturing, reconditioning and rubber-lining valves. Its own registered brand, Inval, features a comprehensive range of valves, including a broad spectrum of low pressure valves. 

Invincible Valves distributes its own range of valves as well as products on behalf of some of the biggest manufacturers in South Africa.

Du Plessis is committed to upskilling her staff through the company’s education and training centre

Built on the foundations of commitment, honesty and loyalty, the company is known for its exceptional customer service. It provides a ‘one stop shop’ to customers, supplying any additional requirements necessary for the valves’ application. The company offers many ancillary services such as rubber-lining of pipes, fittings and valves as well as reconditioning of valves.

As an approved BBBEE Level 4 supplier to all major industries within South Africa, Invicible Valves boasts expertise and experience across a broad spectrum of industries and applications, with a wide range of valve products at its disposal.

THE DRIVING FORCE
Du Plessis credits her success to her father, whom she regards as her role model. ‘He is the person who introduced me to the world of business at a very young age and has supported me in every moment of my life,’ she says. 

Having benefited from the support of family, Du Plessis in turn has been motivated to uplift her employees by upskilling them, and attributes the company’s success to the fact that it provides staff with the required training for their respective areas.

Her goal is to empower as many people as she can and has played an active role in establishing a fully equipped education and training centre on the company’s premises in Gauteng, South Africa, which was built in response to the absence of an efficient training facility of this nature in South Africa.

The recently opened centre offers courses delivered through the South African Valve and Actuator Manufacturers Association. In addition, ABET and basic business and life skills training courses are offered to staff, interns and the local community within which the company operates. Du Plessis says: ‘A number of these are offered to young students from local technical high schools, along with all staff members within our organisation.’

33 Shaft Road, Knights, Germiston, 1406
Tel: +27 (0)11 822 1777 / +27 (0)11 026 7413
Fax: +27 (0)11 822 3666
[email protected]
www.invalve.co.za

Barak Fund Management (Barak) is an African-focused fund manager operating in the credit space, with funds diversified along the yield curve. Barak has become synonymous with trade finance, given the flagship Structured Trade Finance Fund has close to a decade-long track record with a 100% hit rate. With in excess of US$1 billion assets under management – the majority of which are concentrated in trade and working capital – the team of more than 60 spans across Africa and extends to Europe.

Other funds in the short end of the curve (deals maturing within one year) include the Barak Impact Finance Fund and the Barak Sharia Trade Finance Fund. For deals requiring trade finance and expansion capital, the Mikopo Structured Credit Fund, employing leverage, targets borrowers who need funding for less liquid assets maturing within four years. The Barak Asha Impact Fund is a closed-end vehicle, targeted purely at agricultural assets with measurable socio-economic development aspects.

Barak manages longer-term asset-backed deals and projects, mainly focused on agri-financing requirements

With transactions in more than 25 countries, predominantly in sub-Saharan and East Africa, and collateralised by no less than 30 commodities (approximately 15 commodity sectors), the fund manager has deployed in excess of US$2.5 billion since inception for both inter-regional and cross-continental trade. With demand from African SMEs for growth and expansion capital, Barak is extending longer-dated funding, enabling growth and develop-ment within segments of economies that were previously excluded.

The Cayman-domiciled funds are managed outside of Mauritius, with the advisory and main operations in Johannesburg, South Africa. Other locales – primarily for deal origination and/or representation – include Cape Town, Nairobi, Abidjan, Accra, London and Switzerland.

The team has the advantage of agility, superior market penetration, expansive networks and the ability to manage exposures in order to transact successfully. Barak’s strategies focus on fully funded or syndicated debt in the African growth and expansion capital finance space, using asset-backed loans with various forms of collateral verified by independent collateral managers.

With extensive expertise and experience, the fund manager is well positioned to monetise opportunities

Africa presents nuances, which – with the team’s considerable insight – are addressed. Barak mobilises decades of combined expertise, proprietary relationships, market presence and stealth in order to monetise opportunities. The senior management team is a hand-picked group of specialists with significant expertise in agricultural commo-dities, structured trade finance, logistics and loan management.

The Barak investment approach is based on the principles of discipline, diversification, collateralisation and downside-case scenario valuation. The company acknowledges that Africa presents numerous risks including but not limited to macroeconomic, political, liquidity (currency) risks, over and above traditional business risk. Each investment is approached with a stringent on-boarding process – using desktop and on-the-ground due-diligence processes – in order to determine the viability of a potential project’s funding.

Deal originators have the advantage of accessing capital along the yield curve, enabling multiple business requirements to be addressed. Thus, as a business owner in Africa, Barak presents an opportunity to obtain finance in line with business require-ments, and to ensure it creates a strong partnership for the long term.

Extensive networks are key to enabling growth of deal pipelines, with more than 70% of clients being repeat borrowers. Barak has the benefit of extensive technical expertise on a per-sector basis, specialising in agricultural commodities, resources and renewable energy. Deal originators are also active in metals trading, accessing markets across the continent open to a select few. By creating additional trading opportunities for borrowers within its network, Barak strengthens relationships, adding further value.

Barak aspires to be the partner of choice given its reliability, flexibility and understanding of generally uncharted terrain.

With a growing lack of funding due to increasingly difficult regulatory constraints in banking, Barak is a key partner for traders and businesses, enabling seamless business continuity in the face of broad regulatory stringency.

14 Marbella Road, Pellegrin, Trianon,
Quatre-Bornes, Mauritius
Tel: +230 698 0397
[email protected]
www.barakfund.com

There is a need for more lawyers that are able to represent the growing energy sector, be that in environmental practice or regulatory compliance and downstream project agreements, says Barrisford Petersen, BBP Law founder and MD. ‘This is a landscape that is going to be in constant flux, given the constant development of new technologies in the energy sector, which makes this aspect of the law very compelling.’

As devoted as he may have been over the past few years, in presenting a strong argument for oil and gas to have its own legislation and, therefore, be removed from the Mineral and Petroleum Resources Development Act (MPRDA) of South Africa, – Petersen has decided to diversify the BBP Law practice and include the whole energy sector in the provision of legal services.

‘The writing was on the wall even as far back as 20 years ago,’ he says. ‘The oil and gas industry has been through innumerable difficulties, and as long as it remains regulated in its current manner under the MPRDA, we will not be considered by multinationals as a viable investment destination for exploration, let alone production.

‘With proposals and amendments on the table for the past four years, we are no further from the starting point.’

Such frustration has provided new opportunities for BBP Law, and Petersen is excited by the addition of energy to its portfolio of specialised legal services. With energy matters reflected more today, given worldwide calls for reductions in carbon emissions and growing power demands, South Africa’s environmental acts appear to be more concise and appropriate, providing the legal profession with improved clarification and clearer interpretation than the MPRDA.

Barrisford Petersen, founder and MD of BBP Law

Following recent appointments to the legal panels of the Department of Public Enterprises, Saldanha Bay Municipality, PetroSA, Engen, SA Forestries Company Limited and the Independent Electoral Commission, there is now a need for BBP Law – with its team of bright, young lawyers and the support of more seasoned attorneys – to focus its presence and activities on the instructions of these panel appointments, so that they can grow in experience.

With diversification into energy, the practice has employed a number of newly qualified lawyers who, together with Petersen’s son, Brent (who was recently admitted as an attorney), are well set to service this sector and BBP Law’s expanded legal services.

‘Our senior attorneys are mentoring and developing the juniors, and I see them advancing our diversified portfolio of legal services.’

While oil and gas remain his passion, right now Petersen is content to focus on ensuring a good, diversified legal practice, ‘one that works in resources’ and has a reputation for advancing the views of his clients within the parameters of regulation.

If this means he needs to pick up his sword and challenge the country’s energy policies as he does with oil and gas, he will do so, ‘as often as it takes to ensure we have legal frameworks that our investors and clients – both local and international, can work within’, he says.

Petersen adds that there is lots to be excited about in terms of how power could be generated in South Africa in the future, even currently. ‘There are very stimulating opportunities, not least of which is the importation of liquefied natural gas [LNG].’

LNG projects have the capacity to underpin exploration and production of indigenous gas, which could alleviate South Africa’s dependence on coal. The proposed LNG-to-power programmes will have at least two industrial ports producing some 3 000 MW that would be sold to the national grid supplier Eskom, which will alleviate, if not solve extensively, the energy demand-versus-supply failures that it has been experiencing over the past decade.

‘LNG development has been offered to independent power producers and, should trajectories prove true, by 2040 LNG-to-power expansion will lead us into shale gas and deepwater offshore field creation,’ according to Petersen.

Shale gas, however, comes with its own set of problems. ‘While there have been uncertain legislative delays in the commitment to shale gas exploration, we need to keep pushing this. Largely the challenges relate to environmental impacts, and highlight the concerns of action groups – like the Karoo Action Group – that oppose shale-gas mining through fracking, in particular the consequences of which are cited as harmful public health issues.’

Petersen says that, fundamentally, the base building blocks to solving these problems lie in legislation and how to mitigate environmental risks at grass-roots level.

‘If there was lots more investment in shale gas right now, the landscape would be very different because legislators would be under pressure to push for amendments,’ he says, adding that it’s similar to the oil and gas predicament. ‘If regulations are enabling, investment would be flooding in. In some ways, shale gas is like the icing and the cherry on a cake, but without the cake itself.’

Further compounding the dilemma is that the cheapest form of energy delivery in the country currently is coal, but as Petersen points out, the majority of countries that advocate for the non-use of the commodity are those that have environmental challenges, and ironically may have already over-utilised the resource.

‘I believe that given we already use coal effectively to generate energy, and should we begin to manage it more effectively, we can continue to use this abundant resource, and realise cost-effectiveness. But the country is a signatory on mitigating carbon emissions, and rightly so. Therefore I’m not sure how we can solve this problem.’

Which brings us right back to gas. ‘The best form of domestic energy in terms of environmental impact is gas. It is obviously always better to source your commodity locally than to bring it in, but this takes us into the regulatory framework debacle, which I have been fighting for decades and will continue to do. It’s a catch-22 – we just keep going around and around.’

Petersen believes the solution lies with having independent oil producers partnering with the state through a hybrid of production- sharing contracts. The incentives, he says, will allow more royalty income and tax relief. He provides a simple formula, and one that he has presented to the relevant authorities many times.

‘Exploration can be encouraged by permitting a greater and/or accelerated cost recovery, and the oil barrel split can be negotiated between the oil company and the government. What is then being given away is a proportional share of the barrel and not a national heritage. The state will always own its resources.’

This formula mimics that of many African countries that have separated oil and gas from their mining legislation, so it’s not that South Africa doesn’t have case studies it can refer to. It’s a fact too, according to Petersen, that many multinationals seem to prefer operating in other African states where there is a good fit in the fiscal regime for their exploration activities.

‘South Africa is really losing out. Not only have we gone too far down the oil and gas rabbit hole in terms of legislation, but we have also been impacted as a consequence of the global oil price.’

Subsidies would help. As it is, the government has been indirectly subsidising the production of renewable energy, such as wind and solar farms but, while this has been successful, Petersen points out that on a cost per KW, it is still cheaper to focus on gas, particularly domestic gas.

BEE and beneficiation will also be advanced through an enabling legislative environment, let alone employment opportunities and skills development. This is an aspect BBP Law is devoted to, given its Level 1 BEE status.

Tel: +27 (0)21 913 1384
Fax: +27 (0)86 691 4998
[email protected]
www.bbplaw.co.za

The majority of JSE-listed companies are multimillion-rand entities with significant geographic footprints and multiple suppliers and clients, which results in a diverse set of risks all along the value chain. These risks need to be quantified and transferred to an insurer for a monthly or annual premium. As part of ensuring the overall health and continuity of a public company, risk management is a requirement, especially in light of economic volatility, as well as the increasing frequency and severity of climate change and ongoing cyberthreats. To follow are essential insights and risk-specific insurance options.

‘Like a change in the weather, business disruption is inevitable,’ says Quinten Matthew, executive head for specialist business at Santam. ‘Protecting fixed, moveable and people assets is critical. We’ve seen dramatic increases in natural catastrophes recently and from our experience, businesses that use insurance to mitigate climate change risks are more likely to survive disruption.’

Santam’s interim results for the six months to June 2017 showed an 8% growth in gross written premiums for specialist business. In the period under review, the underwriting performance of the commercial and corporate property classes came under pressure after an increase in large corporate property claims – tough economic times often filter through to claims as maintenance and safety standards are compromised. ‘For the rest of the year, we will be expanding capacity in the areas of risk management and surveying, with our under-writing and risk management actions focused on the commercial and corporate property classes of business,’ according to Matthew.

Santam will grow capacity in risk management for commercial and corporate property businesses

In addition to business interruption insurance, cyber insurance is also becoming a necessity for just about any business. The ubiquitous nature of technology has catalysed a correlating rise in exposure to online threats. During 2017, numerous organisations – from governments to NGOs to giant multinationals – have been targeted (and infiltrated) by hackers.

In September, Equifax (a credit rating agency based in the US) was the target of a cyberattack that resulted in the credit records and personal information of almost half of America’s population being exposed – an indictment of the company’s online security controls.

Regardless of the industry, it seems that all companies now face cyber risks. Cisco’s mid-year Cyber Security Report, which included a survey of nearly 3 000 security leaders across 13 countries, revealed that even in the most responsive industries (such as finance and healthcare), businesses are mitigating less than 50% of cyberattacks they know are legitimate.

Santam offers bespoke insurance solutions based on comprehensive risk analyses

Of the cyberthreats investigated within the public sector, 32% were identified as legitimate, but only 47% of these were eventually remediated. Among the retailers interviewed, 32% said they lost revenue due to attacks in the past year, with about a quarter losing customers or business opportunities.

With a multitude of specialist insurance options available, Matthew says it’s about determining which offering strategically aligns with a business’ working risk model. He advises all JSE-listed entities to obtain property and casualty cover as protection against the cost of physical loss or damage to buildings. Additionally, he suggests third-party liability cover and the advance loss of profit coverage to dispel the effect of business interruptions. Being adequately protected is vital for companies looking to expand across Africa, as each country presents a different set of risks.

Santam has an expansive footprint throughout the continent and engages with companies and projects across all sectors. Following the acquisition of RMB Structured Insurance (now called Santam Structured Insurance), and coupled with its vast footprint and tailored skills, the company has incorporated specialist regulation-compliant expertise to cater for an extensive range of risk mitigation and transfer capabilities.

The pricing of specialist insurance to cover JSE-listed entities is subject to the comprehensiveness of the risk analysis conducted, which can require political and social risk-mapping assessments depending on a company’s scope and scale, as well as its risk culture and appetite.

‘Business resiliency starts with effective risk management, and specialist insurance is the key to long-term survival,’ says Matthew. According to the 2017 PwC Risk in Review survey – a global study of corporate officers across 30 industries and spanning more than 80 countries – aligning risk management with strategy at the point of decision-making is critical in enabling organisations to react faster to risks and disruptions. Decision-makers are advised to embed risk management into both strategic planning and tactical execution.

Building 2, 11 Alice Lane,
Sandton, 2196
Tel: +27 (0)11 912 8000
www.santam.co.za

On any given day, more than 8 billion mobile devices are powering up and connecting people around the world. No matter where or who you are, your mobile phone is a lifeline – keeping you in touch with work, family, information and entertainment on the go.

However, all that talking, texting, searching and posting takes power. It’s also not always easy to find a wall plug to charge up. And in excess of 3 billion people in the world either cannot afford electricity or simply can’t access it via the traditional grid.

The robust SunStream portable solar panel provides reliable energy for charging mobile phones in all environments

Even if you are lucky enough to have abundant access to the grid, chances are high that you have had at least one instance where your phone battery died when you needed it most. Indeed, without a source of dependable power, the mobile revolution will fizzle out rather quickly.

Enter US-headquartered SunStream Energy, a fledgling newcomer determined to provide everyone under the sun with the highest-quality solar charging solution for mobile phones, batteries and other devices.

BORN IN AFRICA. MADE IN THE US
Company founder John Anderson made it his life’s work to develop a reliable solar solution after a pivotal trip to Uganda in 2011. While there, he witnessed energy poverty first-hand and realised the potential of mobile connectivity to create upward mobility.

With a background in solar module manufacturing, Anderson was asked to help people in Uganda with a solar-powered cooking device. He successfully developed a current strong enough to boil water using solar PV instead of solar heat, yet he was surprised by the response of the villagers when they asked him if the cooking system would be able to charge their mobile phones. They explained that having a connected phone was of the utmost importance as it enabled people to communicate with family, call for help if needed and conduct business. Initially, Anderson was sceptical – weren’t there products on the market already that fulfilled this need? The villagers assured him there wasn’t anything available that was reliable or durable enough to work consistently. So Anderson went back to his two-car garage in Colorado and focused on making a small, portable solar panel that would work for the larger market.

SunStream products are waterproof, drop-proof and charge many devices as fast as a wall plug

Anderson says that it was a wild ride in the beginning, but they kept building and learned from every failure.

Eventually, they were ticking boxes on functionality. As fast as a wall plug? Check. Works underwater? Check. Fits in a pocket? Check.

On 6 March 2013, Anderson charged a smartphone with a SunStream panel. Fast-forward to today, where the products – made in the US – are on shelves across Africa.

BUILT TO LAST
SunStream arguably makes the most durable and reliable solar chargers on the market. Their products are inspired by an enabling mission – to offer people a way to stay safe and connected everywhere, every day.

The result is revolutionary solar technology that streams electricity directly into devices, even in the harshest outdoor conditions. SunStream panels are portable, drop-proof, waterproof, and they’re able to charge many devices as fast as a wall plug.

A NEW KIND OF SOLAR
Other solar products require internal electronics, such as a chipset, circuit board, inverter or other charge controller to create energy. This results in an automatic loss of usable energy. SunStream panels are different.

With chipset-free charging, SunStream’s technology converts sunlight into electricity instantaneously at a 99% throughput rate, making it the most efficient and reliable portable solar panel on the market.

It’s also the first technology in the world to combine two extremely difficult international compliance standards into one unit. The technology is both USB 2.0 DCP-compliant and has a UL 1703 PV module certification.

The company was granted a US Patent and Trademark Office utility patent for the core power methodology innovation in July 2015, and has been given 47 design patents throughout the world.

Block B, Agri-Hub, 4,
77 Witherite Road, Pretoria,
0184, South Africa
Tel: +27 (0)12 007 1500
[email protected]
www.sunstreamenergy.com

Founded in 2000, the J&J Group has grown using a multifaceted growth model, which has included start-up joint ventures, partnerships, and acquisitions of both growth and mature companies.

The primary goal of the J&J Group is to identify, structure and invest in businesses to the mutual benefit of all stakeholders involved. The group remains steadfast in its pursuit of growing its business, community and government relationships to continue delivering value-creating enterprises.

Relationships with strategic partners have been a key element in guiding its growth, allowing the group to build a variety of mutually beneficial partnerships and working relationships with companies such as Old Mutual, Rand Merchant Bank, AREVA, Verizon, the Tata Group, Murray & Roberts (VRESAP, UCW), Dr Reddy’s Laboratories, Bombardier, Macquarie Bank and SolaireDirect.

The J&J Group has been an integral part of numerous development projects

SECTORS OF INVOLVEMENT
Transportation
The J&J Group has a significant stake in the Gautrain Rapid Rail Link (Gautrain), further solidifying its commitment to growing the infrastructure portfolio.

Gautrain is a private-public partnership (PPP) that provides a fast passenger train service connecting South Africa’s financial capital, Johannesburg with Pretoria (the administrative capital, Tshwane) and OR Tambo International Airport.

Energy
An important part of the vision of the group is to support ongoing initiatives that contribute to the development of energy supply and resources in both South Africa and the rest of Africa.

The J&J Group holds ownership control of Util Labs – an energy technology company that has developed a smart-grid solution involving end-to-end, real-time, bi-directional measurement monitoring and control throughout the low-voltage network.

Financial services
The J&J Group has built a presence in financial services through its flagship holding company, Macquarie First South.

In August 2006, First South Securities concluded a merger with the corporate advisory arm of Macquarie Bank Africa, the global, Australia-based bank, thereby creating Macquarie First South.

Macquarie First South provides a range of financial services, including a stock-broking service that covers a full research team and a trading and settlement service to institutions, as well as investment banking advisory services. In the latter part of 2015, the J&J Group exited the partnership.

Healthcare
The J&J Group entered the healthcare sector in 2004 with the establishment of Venture-pharm, which developed a joint venture partnership with Dr Reddy’s Laboratories, trading in generic medicines. The group exited this investment in 2010.

Infrastructure
The J&J Group has spent the past few years steadily growing a pipeline of infrastructure opportunities in South Africa, SADC region, the rest of Africa and the Middle East, with a particular focus on renewable and conventional energy, telecoms and transport infrastructure. Through its partnerships with Areva and Lesedi Nuclear Services, the group has been able to participate in the bid submissions for Eskom’s nuclear power plant programme.

Adding to its portfolio of infrastructure providers, the group also holds a 50% stake in Kutluano Engineering Consultancy, an engineering consulting and project-management firm that owns EON.

ICT
The J&J Group had, until the latter part of 2016, a significant presence in the South African ICT industry. Its principal investment was in TATA Consulting Services South Africa, (TCS SA), which is a major global player that has rapidly expanded its presence in Southern Africa.

The group has since exited this partnership but has agreed to work with TCS SA on project-by-project basis.

RENEWABLE ENERGY
The J&J Group, together with Old Mutual and SolaireDirect, owns two solar farms outside Vredendal and Aurora in the Western Cape.

These projects are part of the Department of Energy’s Renewable Energy Independent Power Producer Procurement programme (round two) and have already been commissioned, providing a total of 20 MW (10 MW each) to the Eskom grid.

J&J DEVELOPMENT TRUST
Good companies make good products. Great companies go further by giving back. The J&J Development Trust is a means to making the world a better place.

BACKGROUND
Trading as the J&J Group, Jay and Jayendra (Pty) Ltd is a South African-based investment holding and management company with investments in a select group of companies.

Over the past 18 years, the company’s targeted investment areas have included road and rail concessions; telecoms; financial services; and conventional and renewable energy. Its most significant investments in PPPs include the following:

  • The Gautrain – a rapid transit system linking South Africa’s financial and legislative capitals (Johannesburg with Pretoria) with OR Tambo International Airport. Consortium members includes Murray & Roberts, Bombardier, Bouyges and SPG.
  • The Vaal River Extension Substation Augmentation Project (VRESAP) was a PPP project designed to transport raw water through a 122 km steel pipeline from the Vaal dam to Secunda. Consortium members included Murray & Roberts, Group 5 and WK Construction.
  • As part of the Protea Parkway Consortium, the J&J Group reached preferred bidder status for the construction, maintenance and operation of the Western Cape N1/N2 toll road.
  • As part of the Prison PPP project, the J&J Group reached ‘best and final offer’ (BAFO) stage.
  • The group also reached BAFO stage on the design, finance, construction, maintenance and operation of South Africa’s Department of Foreign Affairs premises.

The J&J Group had roots in the IT sector and continued to have a significant presence in the market through its principal investment in TCS SA. The group also had a significant stake in Verizon Business South Africa, a subsidiary of the US-based telco that provides advanced IP, data, voice and wireless solutions to large businesses and governments from around the world.

The J&J Group has also built a presence in financial services through its flagship holding company, First South Financial Services. In 2006, First South concluded a merger with the corporate advisory arm of Macquarie Bank Africa. The merged company provided a range of services, including stockbroking services that covered a full research team and a trading and settlement service to institutions as well as investment banking services.

Since its establishment, the J&J Group has built good, mutually beneficial relationships and partnerships with several global companies. These are anchored by Old Mutual, the LSE-listed financial institutions, which is a significant shareholder in the J&J Group.

Other significant international companies with which the group had concluded business partnerships include Areva, Verizon, Tata Group, Macquarie Bank, Bouyges, Dr Reddy’s Laboratories and Bombardier.

The J&J Group has a strong group Executive Team comprising Jayendra Naidoo (Chairman), Tladi Ditshego (CEO) and Nazir Alli (Resident Adviser).

South Wing, The Place
No. 1 Sandton Drive, Sandton, 2196, P O Box 784738
Sandton City, Sandton, 2146, South Africa
Tel: +27 (0)11 301 5000, Fax: +27 (0)11 783 8653
[email protected]
www.jandjgroup.com

Healthy societies can only be built on pillars that include peace and security, respect for human rights and the rule of law. It is the entrenchment of the law and the deepening of the capacity of the judiciary that enables a country to flourish. True democracy cannot exist without it.

South Africa’s Chief Justice, Mogoeng Mogoeng, explains that where the rule of law is observed, little or no room exists for unconstitutional regime change or election rigging. ‘This is so because courts can always be approached to ensure compliance with the regulatory framework that governs elections and a change of government. Proper observance of the law deepens democracy because it enables the holding of free and fair elections regularly and as prescribed.

Proper observance of the law deepens democracy, says Chief Justice Mogoeng Mogoeng

‘Additionally, government and democracy-supporting institutions ensure compliance with the Constitution and the law.’

The Constitution upheld by South Africa is considered one of the most progressive in the world – so much so that US Supreme Court Justice Ruth Bader Ginsburg has heralded it as ‘a great piece of work’. What makes it so, says Mogoeng, is that the aspirations contained within are being given practical expression.

‘Millions of houses have been built for the poor; water and power are being rationed out to the financially under-resourced; and free education and medical treatment are enjoyed by the indigent and children of those earning below the breadline. However, as with all systems, while the Constitution is not perfect, it is innovative and broadly a well thought-out and thorough programme that is directed at meeting the needs of the economically disadvantaged,’ he says.

The checks and balances that South Africa maintains to ensure its Constitution is upheld encompass foundational values of openness, responsiveness and accountability – and these in turn enable good governance.

This is achieved through a number of institutions that have key responsibilities to ensure the strength of South Africa’s constitutional democracy, such as the nation becoming arguably the first on the continent to insulate judicial independence.

With that comes a deeper understanding of just how crucial the rule of law is. ‘Duly promoted and properly enforced rules of law translate into no single individual being able to exercise power that he or she does not have,’ says Mogoeng. ‘There should be no opportunity for anyone to disregard laws or disobey court orders.

Chief Justice of South Africa Mogoeng Mogoeng

‘The rule of law effectively outlaws the impunified abuse of power or government resources. This applies anywhere in the world and is why Constitutional Courts are generally vested with enormous powers.’

The Constitutional Court is the supreme law in South Africa. It is empowered to declare any law or conduct that is inconsistent with the Constitution to be invalid.

In Mogoeng’s words, ‘it bears the responsibility of being the ultimate guardian of the Constitution and its values, as well as ensuring that all branches of government act within the law in fulfilling its constitutional obligations’.

The onus of constitutional enforcement falls to nine judges under the Chief Justice and his Deputy. Appropriately qualified, fit and proper persons are initially nominated by the Judicial Service Commission, after which the public and legal bodies have an opportunity to comment on the suitability of the candidates.

After a public interview and the presentation of 12 candidates (three more than are required), the President of South Africa makes the final decision on the nine appointments. ‘Judges are required to take an affirmation – or oath of office – to uphold and protect the Constitution and the human rights entrenched therein, as well as to administer justice to all persons alike without fear, favour or prejudice,’ says Mogoeng.

‘We take our oath of office and judicial independence very seriously and will do our utmost to protect it.

‘I deal with the matters that come before the Constitutional Court in terms of the law, irrespective of who the parties are – and that’s the principle that is applied to all judges in the country.

South Africa’s Constitutional Court is the ultimate guardian of the country’s highest laws and their values

 ‘In being head of the Constitutional Court, I am responsible for presiding in court and the allocation of cases to judges of that court.’

Mogoeng’s role is far greater than the constitutional arena, however. His role as head of the judiciary includes presiding over the Heads of Superior Courts meetings, the latest of which indicates the collective judges’ unwavering commitment to ensure justice towards the South African populace is dispensed.

‘We have also committed to the development of a system that will allow the judiciary to communicate issues relating to our performance; the use, adequacy and inadequacy of the budget available to us; as well as the infrastructural, logistical and judicial capacity-related challenges we face,’ says Mogoeng.

These are issues the entire continent’s judiciaries face and why the Conference of Constitutional Jurisdictions of Africa (CCJA) has been a catalyst in unifying constitutional justice and arbitration across its member states.

At the time the CCJA was established (in 2011) by presidents and representatives of African constitutional jurisdictions, there was a dire need to promote constitutional justice across the continent.

Mogoeng has served as one of the organisation’s Vice-Presidents, and at the 4th CCJA Congress he was expected to be elected its President. In this capacity, he is cognizant of just how vast and intimidating the jurisdictional diversity in Africa is, as well as the value of the economic advances experienced over the past five years, which have played a significant role in effective and efficient change to African legal frameworks.

‘Judicial independence and the speedy delivery of quality justice to all in an effective and efficient manner has a very important role to play in creating the stability and investor confidence to incentivise more – and new – investment or capital injection in an economy,’ he says.

Whether real or perhaps imagined, the perception that African jurisdictions are (among other issues) corrupt, not impartial and unreliable given political instability or civil unrest has been a factor that has restricted corporate investment.

‘The reality is that the corporate world and potential investors ordinarily require a particular environment to settle down, particularly in developing countries,’ says Mogoeng.

‘Broadly speaking, the environment they tend to insist on is one where peace, stability and constitutionalism exist – and where the rule of law is observed.

‘The success or failure of business often depends on the type of judiciary a particular country has. A compromised or corrupt one could easily ruin an otherwise flourishing business depending on what its members have been offered.

‘A judiciary that lacks independence could shipwreck an investment, depending on who has the capacity to blackmail or intimidate its members or even grease their palms.’

This is something Mogoeng is sincerely passionate about. His view is that in many respects there is a lack of enforcement of corruption-busting legal machinery.

‘Africa desperately needs a truly independent and efficient judiciary in each of its nations to create peace and stability,’ he says.

‘I have no doubt that when citizens know that there is an effective and efficient court system in their country, and that arrest, prosecution, conviction and sentence for the guilty is predictable, then corruption and crime in general will decrease.’

According to Mogoeng, the theme of the 4th CCJA Congress – namely Strengthening the Independence of the Judiciary and Respect for the Rule of Law – highlights the significance of the role of African Heads of Courts in terms of being able to influence legal frameworks that effectively have the ability ‘to see all our courts and arbitration systems characterised by impartiality and real justice’


Private Bag X 1, Constitution Hill, Braamfontein, 2017
Tel: +27 (0)11 359 7400
[email protected]
www.judiciary.org.za