South African private hospital group, Mediclinic, has contracted Moshesh Partners, a black-owned alternative renewable energy asset manager, to install solar photovoltaic (PV) systems at six of its hospitals. The group has signed a 12-year power purchase agreement (PPA) with Moshesh Partners (with the option to extend to 25 years).
The solar systems will be installed by Cape Town based C&I solar company, ACES Africa (Pty) Ltd. The systems are set to reduce the hospitals’ energy bills, as well as reduce their carbon footprint.
“The solar PV systems will generate electricity that is supplied directly to each hospital site, affording them cost savings on their monthly power bills, while relieving pressure on the constrained national grid.”
Across the six hospitals, the solar sites installed and managed by Moshesh Partners will have the capacity to generate approximately 4,100,000 kWh per annum, with the largest facilities being installed at Mediclinic Vergelegen and Mediclinic Durbanville. Installations will be rolled out from June to December 2021.
The Mediclinic deal is the first investment out of the Moshesh Partners RECI Fund 1 since it reached the first close of its R2 billion renewable energy and clean infrastructure energy fund in September 2020. Moshesh’s fund seeks to help businesses secure consistent energy supplies at predictable pricing from independent and renewable sources – without capital investment.
“Our investment in the project portfolio includes the full installation cost of the solar PV systems, as well as maintaining them to ensure consistent, excellent performance,” says Daniel Palm, CIO and co-founding member of Moshesh Partners. “Mediclinic will benefit from immediate and tangible savings, as well as consistent energy supply from a renewable energy source, without having to allocate capital expenditure.
“The PPA means that the hospital group will also be protected from excessive power price increases,” Palm adds.
Mediclinic utilising South Africa’s new energy regulations
The deal comes just after South Africa’s President Cyril Ramaphosa announced that self generation power systems of up to 100 MW will now be exempt from licensing by the energy regulator, NERSA. This is set to unlock significant investment potential in South Africa’s C&I renewable energy space and reduce the power supply burden on embattled power utility, Eskom.
Eskom has warned that load-shedding due to a shortfall of power generation is likely for the next five years. While many hospitals have installed diesel or petrol generators to ensure a consistent power supply, these options are expensive to run and generate significant noise and air pollution.
“The energy shortfall is a major risk to our economy,” Ramaphosa said in a televised address on Thursday. “Energy security is one of the priority interventions in our economic recovery plan.
Furthermore, with the National Energy Regulator of South Africa allowing a power price increase of 15% in 2021/2 alone, businesses of all types and sizes are seeking ways to manage their energy costs more effectively.
“Having access to on-site clean, affordable energy will help Mediclinic manage its energy costs while helping us reduce the group’s carbon footprint – a key priority for our business,” says Kobus Jonck, General Manager of Infrastructure of Mediclinic Southern Africa.
