Published in Engineering News | 17 February 2023
A local premium prepared food and beverage business has secured the services of Pretoria-based engineering consultant BBEnergy to enable more responsible water use and improved water management systems by implementing an energy and water utility model as South Africa’s water infrastructure continues to deteriorate.
An investee company of mid-market private equity investment firm Agile Capital, BBEnergy has developed various water projects on behalf of clients over the past four years?
“Wastewater is often regarded as an unavoidable operational cost. Reusing treated wastewater has become a cost-effective and reliable source of process water and reduces demand on surface and ground water sources, as well as public wastewater treatment facilities,” explains BBEnergy business unit leader Jannes Bester.
Operating and maintaining water and energy management infrastructure, is often not the core business of BBEnergy’s clients, but managing this infrastructure has become key to the success of their businesses.
Think of the 330 jobs lost in 2021 following dairy products manufacturer Clover’s closure of South Africa’s largest cheese factory in Lichtenburg, in the North West, owing to “ongoing poor service delivery” by the Ditsobotla Local Municipality.
Having tried to engage the municipality for years on service delivery, Clover moved production to Queensburgh in Durban, citing large losses owing to long-standing water and electricity disruptions as the municipality had failed to maintain the relevant infrastructure.
Potable water supply shortages have become a significant challenge for various municipalities in South Africa owing to ineffective or poorly maintained infrastructure, and with climate change mostly affecting underdeveloped and possibly underfunded emerging markets, it is becoming a global problem, Agile Capital CEO and founder Tshego Sefolo tells Engineering News.
The poor state of local water infrastructure is exacerbating water contamination, impacting on South African’s basic human right to fresh drinking water. As a result of poor water quality, health and environmental issues are increasing, with agriculture and food security significantly affected, he elaborates.
“The country’s mining activities also continue to add to water contamination, owing to acid mine drainage, for example. To ensure responsible environmental practices and good governance, companies are required to consistently test water at mines according to mining licence regulations, as do farms to ensure crop quality and yield.”
Consequently, Agile Capital invested in Pretoria-based environmental monitoring and testing laboratory Aquatico in 2014 and intends to invest in other companies with good growth prospects in the water sector.
“This would include companies supplying consumables and equipment into the water sector, as well as services, such as water treatment,” explains Sefolo.
He believes South Africa’s ailing public water infrastructure will drive public–private partnerships in the local water sector, and will assist in expediting governance tools such as the Blue Drop and Green Drop programmes to help improve water quality in South Africa.
The country’s water challenges are also an opportunity for water-intensive companies to take proactive steps to secure their water supply and quality, as well as regulate their water consumption and treatment, advances Sefolo.
“Although government is responsible for the basic infrastructure, there are energy, economic and other issues in the mix, and it does not have the capacity to solve all these problems from a financial and skills perspective.
“For the private sector to invest, and ensure good business principals are implemented, is a win-win situation as this increases its ability to effectively develop infrastructure that works.”
Agile Capital believes that investing in businesses that have a positive impact on and implement effective environmental, social and governance policies is not only the best business practice but also drives sustainability of businesses and, ultimately, job creation and economic growth. “Agile Capital intends to continue investing its funds in established businesses in various sectors, including in manufacturing and service oriented companies,” concludes Sefolo.
