Cape Town to Boost Economic Growth and Infrastructure
Severe load shedding may be casting a dark shadow over the country but the city of Cape Town is doubling down on infrastructure development, giving hope to investors, commercial businesses and city residents alike.
Mayor Jordan Hill-Lewis recently announced an effective doubling in the city’s spending on key infrastructure, including transportation, sanitation and waste management, housing, and most crucially of all: electricity production.
The municipality’s plan, which seeks to avoid the service delivery failures seen in other provinces, is a powerful step forward for Cape Town. Here’s what local business owners and semigrants can expect over the next few years.
R120 billion on infrastructure
Cape Town has always been noted for the reliability of its service delivery and judging by the city’s recent announcement, this reputation will only grow in the years to come.
The City has announced an enhanced spending plan for critical infrastructure, including the following ambitious goals.
Energy security
R1 billion a year will be spent on electricity production and distribution between 2023 and 2028. Over half of this amount will be spent to ensure a healthy power grid.
The following initiatives form part of the power plan:
- Buying three-phase power on the open market for 4-stages of load shedding
- Paying businesses and homeowners competitive rates for their surplus power.
- A voluntary energy saving programme called Power Heroes
- Municipal power production including hydro power, gas turbines, and solar
Day Zero: Never Again
A R5 billion investment in water infrastructure is set to add 300 Mega-Litres per day to the City’s reservoirs by 2030.
This is in order to prevent a recurrence of Day Zero given the cyclical droughts affecting the province.
- Water from the Table Mountain Group Aquifer has been flowing since 2020
- In addition, the Cape Flats Aquifer should start producing ground water supplies by mid-2023
More transportation options
Metrorail has long been a topic of concern, with poorly maintained and typically late trains causing major frustrations for workers and families across Cape Town.
Passenger rail has reached a crisis point and now only serves 2% of all passengers in the metro – and the City is intent on taking over this function from national government and rebuilding the rail capacity that residents once took for granted.
- A generous R6.4 billion has been earmarked for Transport and Roads infrastructure over the next three years.
- R600 million will be spent immediately on the MyCiti south-east expansion, creating a bus corridor between Khayelitsha, Mitchells Plain, Claremont, and Wynberg.
These positive spending priorities are set to secure Cape Town’s future as a well governed, pro-business, and inclusive metro with a commitment to world standard infrastructure.
One of the most exciting aspects of the plan is the ability for businesses to monetise the solar power they’ve been forced to create to cope with load shedding.
Businesses to generate electricity – Electricity to generate business
What makes the City’s infrastructure development plan highly innovative from a commercial property perspective is the prospect of commercial buildings themselves being used to generate electricity, which can be sold to the city at competitive rates.
Cape Town’s expanded commercial footprint, including the Cape peninsula, and the new developments on the West Coast towards Saldana, is home to a huge number of office buildings, warehouses, and other commercial properties.
These commercial properties are rapidly adopting solar power as a backup measure against load shedding. Energy producing buildings are equipped with equipment to produce a tremendous amount of electricity which could be accumulated and sold back to the city at a profit.
Power generated by rooftop solar installations is currently stored in batteries until needed during times of load shedding.
With thousands of businesses investing in this technology and the City of Cape Town expanding its own electricity production capacity, businesses may end up with surplus power to sell back into the grid.
Expect a new wave of semigration as CT becomes energy independent
Cape Town has several impressive infrastructure projects ready to roll out, with many more in the pipeline. The Mother City plans to use its superior roads, water reliability, and power supply to attract investment – and that means a new wave of semigration.
The arrival of investors from other provinces means more demand for Cape Town office space. This should boost developers’ interest in new buildings that will provide even more power for the grid along with a raft of benefits including local employment.
With Cape Town expected to see an estimated R393 million injected into the local economy as it hosts delegates from more than 27 large conferences recently secured by Wesgro, the economic boost to the province looks set to be far reaching.
To benefit from Cape Town’s rise and rise, you’ll need to be here. Contact the Commercial Space team today to view our portfolio of premier office space across the Cape Peninsula.
