Green money, green buildings
FOLLOWING a feasibility study in 2006, the Department of Environmental Affairs (DEA) concluded that its head office in City of Tshwane no longer met the fundamental needs of the staff and was not a reflection of the Department’s environmental and sustainable ideologies.
“The DEA head office project went to tender in 2007 and three bidding consortia put in bids for the project as a Public Private Partnership (PPP),” explains Colin King - Senior Transactor in Project Finance at Barclays Africa. “As Absa, we provided the Imvelo Concession Company bidding consortium with its financial support for the bid. This consortium was made up of Aveng Africa, Old Mutual, Wiphold and Tiso Group, of which Wiphold and Tiso Group were the black economic empowerment partners.
“The Director-General of the DEA, Nosipho Ngcaba, signed the PPP Agreement between DEA and the Imvelo Concession Company in 2012. Imvelo, in turn, appointed Absa as the sole mandated lead arranger and sole hedging provider for the project. To structure the debt financing package, Absa took approximately 50 percent of the senior debt funding and the Development Bank of Southern Africa (DBSA) and Old Mutual Specialised Finance (OMSFIN) took up the balance of the senior debt.
“The most challenging aspect of the building was the DEA requirement to reach a 6-star design rating from the Green Building Council of South Africa (GBCSA). No other government building in South Africa had ever achieved this and there were very few buildings that had achieved 6-star rating from the GBCSA in the commercial field.”
The Imvelo Concession Company bidding consortium appointed Boogertman + Partners as the architects, P D Naidoo & Associates as the Johannesburgbased consulting engineering specialists and Aveng Grinaker/LTA as the construction contractor. In terms of financial advice, the Macquarie group advised the consortium with Webber Wentzel providing the legal advice.
“As mandated lead arranger to the consortium, Absa utilised the legal experience of Werksmans, the technical and environmental expertise of Mott MacDonald, the financial model audit as well as accounting and tax expertise of KPMG (with a particular focus on PPP structures) and the short-term insurance and risk management expertise from Aon,” continues King.
“The project is considered an unqualified success and one of the biggest PPP green projects for the bank. The initial external debt funding requirement of approximately R730 million was subsequently reduced close to financial close, when the Department of Environmental Affairs agreed to fund approximately half of the construction costs of the building,” he concludes.
“This building forms part of the overall drive by Barclays in Africa and Absa in South Africa towards funding Green initiatives,” adds Joanne Bate – Head of Structured Banking Solutions Barclays Africa. “We have supported ‘Green financing’ in large scale renewable energy projects through the REIPPPP programme. Furthermore, the group has focused on smaller projects that reduce the carbon footprint, including retrofits, renewable energy installations and energy efficiency projects. These smaller opportunities have further benefitted from support from the French Development Agency.”
Vonani Mabunda – head of lending products Barclays Business Banking Africa, continues, “Environment House is a major government project but this kind green thinking needs to percolate down to all levels of government buildings and we are very excited to be discussing the implementation of solar power to reduce energy costs in schools and hospitals in Gauteng. These smaller projects all add up and continue to reduce the greenhouse effect in South Africa. Similarly, the home loans division is providing finance for homeowners to install solar geysers. As the power grid comes under more pressure, it is necessary that everyone play their part in reducing energy consumption,” he concludes.. AVENG CAPITAL PARTNERS is a shareholder in the concession company that was established to implement the PPP agreement. It is contracted to the Department of Environmental Affairs for the design, construction, operation, maintenance and finance of Environment House for a 30-year concession period, inclusive of the initial construction period.
Aveng Grinaker-LTA, with its joint venture partner Keren Kula, was contracted to the concession company to design and construct the 27 000 m2 building to accommodate 1305 of the Department’s employees, presenting challenging energy issues, which have been solved in many innovative ways.
At the end of the concession period the building will be handed to the Department of Environmental Affairs.
Integration of the longterm facilities management and operational requirements into the initial design and construction of a building is the cornerstone to the delivery of a successful PPP accommodation project.
“Extensive studies and modelling were done to ensure that the building was optimally orientated to meet the energy consumption requirement of a maximum of 115 kWh/m2/annum.
“The roof of the building is almost entirely covered with solar photovoltaic panels to supply 10 percent of the building’s energy needs from renewable resources.
“The design maximises natural light sources and minimises energy through low energy fluorescent lights and movement sensors,” explains Simon Everitt, business executive for Aveng Capital Partners.
“Historically a major contributor to building’s energy consumption is the air conditioning system. To reduce the energy consumption a centralised energy-efficient two-stage evaporative cooling system, with customised controls for each floor of each office block, has been installed.
“Window actuators automatically open and close the windows for night flushing of the warm air accumulated during the day. The windows are double-glazed and the walls insulated. The building’s architecture provides shade across walls and windows to reduce heat absorption.
“Urban greening, including indoor plants and vertical wall/roof gardens for aesthetics and cooling of the building, all complement the energy efficiency of the building.
“Water efficiency measures are in place to ensure that the building consumes 30 percent less water than a conventionally designed building of a similar magnitude. To achieve this, a rainwater harvesting system, water-wise indigenous plants and efficient irrigation systems were incorporated into the building design.
“One of the latest grey water treatment systems has been installed in the basement to provide water for the gardens.
“Imvelo FM, a company formed by Old Mutual Property Management and Dijalo Facilities Management, has been appointed to manage the building on a day to day basis on behalf of the concession company.
“It has been an interesting challenge and one that we look forward to over the concession period. We feel that the pursuit of energy efficiency in both architecture and facilities management is the way of the future and we would be very interested in bidding for projects of this type in the future,” concludes Everitt.