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SADC officially launches renewable energy centre

SADC officially launches renewable energy centre

By Joseph Ngwawi

The establishment of a regional centre for renewable energy in southern Africa is expected to go a long way in ensuring the harmonisation of standards in a region inundated with an influx of various solar products and technologies.

This was one of the main sentiments expressed during the official launch of the Southern African Development Community (SADC) Centre for Renewable Energy and Energy Efficiency (SACREEE) in Windhoek on 24 October.

The majority of speakers during the ceremony said SACREEE should act as a “clearing house” for setting standards in the SADC renewable energy sector.

Players in the sector are presently allowed to import any renewable energy products and technologies without adhering to any set standards.

According to Botswana Minister of Mineral Resources, Green Technology and Energy Security, Eric Molale, this has seen the region importing products and technologies that were not made for local conditions.

He narrated an incident in which one of his officials purchased solar panels from a Botswana distributor but the products melted within days because they were not made for local conditions.

“SACREEE should, therefore, be our standard setter to ensure that the technologies we are importing is suitable for our climatic conditions,” Molale said.

Namibia Minister of Mines and Energy, Tom Alweendo said in addition to being a clearing house for standards in the sector, the establishment of SACREEE comes at a time when the global renewable energy landscape is fast-changing in terms of the development of new technologies.

“Renewable energy technologies are fast-changing and we need to be able to move with the changes. We believe SACREEE could assist us in this regard,” Alweendo said.

SACREEE would, among other things, spearhead the promotion of renewable energy development in the region.

It is expected to contribute substantially to the development of thriving regional renewable energy and energy efficiency markets through knowledge sharing and technical advice in the areas of policy and regulation, technology cooperation, capacity development, as well as investment promotion.

It has been agreed that the centre should be an independent SADC institution that should be owned and supported by member states for sustainability purposes.

Such a development would give the centre more authority to spearhead efforts to increase the uptake of renewable energy sources in the region.

SADC is working closely with the United Nations Industrial Development Organisation (UNIDO) and the Austrian Development Agency (ADA) to accelerate implementation.

ADA Managing Director, Martin Ledolter said SACREEE would assist SADC to meet Sustainable Development Goal 7 on universal access to sustainable energy services by 2030.

“Our partnership with UNIDO in the global network of sustainable energy centres – of which SACREEE is a member – is a significant example of how we are synergising global efforts so as to make SDG7 a reality for all,” Ledolter said.

According to SADC Executive Secretary, Dr Stergomena Lawrence Tax, about 61% of the more than 300 million people in southern Africa get “their daily energy needs for space heating and cooking by collecting fuelwood, agricultural residue and animal waste.”

“The ongoing initiatives at national level that are stimulated through regional commitment resulted in increase of weighted average on access to electricity from 36% in June 2013 to 48% observed in June 2018,” Dr Tax said in a speech read on her behalf by Dr Domingos Gove, director of Food, Agriculture and Natural Resources at the SADC Secretariat.

ADA supports seven renewable energy centres around the world. The first regional centre for renewable energy and energy efficiency opened in 2010 in West Africa.

Five others have been established in East Africa, southern Africa, the Caribbean, the Pacific region and Central America. Another centre in the Himalayas is currently in the planning stage.

The official launch of SACREEE is part of the First Operational Phase of the centre during which it has primarily focused on developing renewable energy programmes for the region and resource mobilisation.

Initially set to run from 2014-2017, the phase delayed completion by a year.

The Second Operational Phase, from 2018-2021, will focus on activities to ensure sustainability of the centre after the exit of international cooperating partners.

According to the African Development Bank, southern Africa has the potential to become a “gold mine” for renewable energy due to the abundant solar and wind resources that are now hugely sought after by international investors in their quest for clean energy.

For example, the overall hydropower potential in SADC is estimated at about 1,080 terawatt hours per year (TWh/year) but capacity being utilised at present is just under 31 TWh/year. A terawatt is equal to one million megawatts.

The SADC region is also hugely endowed with watercourses such as the Congo and Zambezi, with the Inga Dam situated on the Congo River having the potential to produce about 40,000 megawatts (MW) of electricity, according to the Southern African Power Pool.

With regard to geothermal, the United Nations Environment and the Global Environment Facility estimate that about 4,000 MW of electricity is available along the Rift Valley in Tanzania, Malawi and Mozambique.

SACREEE would, among other things, spearhead the promotion of renewable energy development in the region.

It is expected to contribute substantially to the development of thriving regional renewable energy and energy efficiency markets through knowledge sharing and technical advice in the areas of policy and regulation, technology cooperation, capacity development, as well as investment promotion.

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Sanlam 2018 Annual Results

7 March 2019


Sanlam’s 2018 annual results provides testimony to its resilience amid challenging operating conditions and negative investment markets

Sanlam today announced its operational results for the 12 months ended 31 December 2018. The Group made significant progress in strategic execution during 2018. This included the acquisition of the remaining 53% stake in SAHAM Finances, the largest transaction concluded in the Group’s 100-year history, and the approval by Sanlam shareholders of a package of Broad-based Black Economic Empowerment (B-BBEE) transactions that will position the Group well for accelerated growth in its South African home market.

Operational results for 2018 included 14% growth in the value of new life insurance business (VNB) on a consistent economic basis and more than R2 billion in positive experience variances, testimony to Sanlam’s resilience in difficult times.

The Group relies on its federal operating model and diversified profile in dealing with the challenging operating environment, negative investment markets and volatile currencies. Management continues to focus on growing existing operations and extracting value from recent corporate transactions to drive enhanced future growth.

The negative investment market returns and higher interest rates in a number of markets where the Group operates had a negative impact on growth in operating earnings and some other key performance indicators. This was aggravated by weak economic growth in South Africa and Namibia and internal currency devaluations in Angola, Nigeria and Zimbabwe.

Substantial growth in Santam’s operating earnings (net result from financial services) and satisfactory growth by Sanlam Emerging Markets (SEM) and Sanlam Corporate offset softer contributions from Sanlam Personal Finance (SPF) and Sanlam Investment Group (SIG).

Key features of the 2018 annual results include:

Net result from financial services increased by 4% compared to the same period in 2017;

Net value of new covered business up 8% to R2 billion (up 14% on a consistent economic basis);

Net fund inflows of R42 billion compared to R37 billion in 2017;

Adjusted Return on Group Equity Value per share of 19.4% exceeded the target of 13.0%; and

Dividend per share of 312 cents, up 8%.

Sanlam Group Chief Executive Officer, Mr Ian Kirk said: “We are satisfied with our performance in a challenging operating environment. We will continue to focus on managing operations prudently and diligently executing on our strategy to deliver sustainable value to all our stakeholders. The integration of SAHAM Finances is progressing well. In addition, Sanlam shareholders approved the package of B-BBEE transactions, including an equity raising, at the extraordinary general meeting held on 12 December 2018. Our plan to implement these transactions this year remains on track.”

Sanlam Personal Finance (SPF) net result from financial services declined by 5%, largely due to the impact of new growth initiatives and dampened market conditions. Excluding the new initiatives, SPF’s contribution was 1% down on 2017 due to the major impact that the weak equity market performance in South Africa had on fund-based fee income.

SPF’s new business sales increased by 4%, an overall satisfactory result under challenging conditions. Sanlam Sky’s new business increased by an exceptional 71%. Strong growth of 13% in the traditional individual life channel was augmented by the Capitec Bank credit life new business recognised in the first half of 2018, and strong demand for the new Capitec Bank funeral product. The Recurring premium and Strategic Business Development business units also achieved strong growth of 20%, supported by the acquisition of BrightRock in 2017. Glacier new business grew marginally by 1%. Primary sales onto the Linked Investment Service Provider (LISP) platform improved by 5%, an acceptable result given the pressure on investor confidence in the mass affluent market. This was however, offset by lower sales of wrap funds and traditional life products.

The strong growth in new business volumes at Sanlam Sky had a major positive effect on SPF’s VNB growth, which increased by 7% (14% on a comparable basis).

Sanlam Emerging Markets (SEM) grew its net result from financial services by 14%. Excluding the impact of corporate activity, earnings were marginally up on 2017 (up 8% excluding the increased new business strain).

New business volumes at SEM increased by 20%. Namibia performed well, increasing new business volumes by 22% despite weak economic conditions. Both life and investment new business grew strongly. Botswana underperformed with the main detractor from new business growth being the investment line of business, which declined by 24%. This line of business is historically more volatile in nature.

The new business growth in the Rest of Africa portfolio was 68% largely due to corporate activity relating to SAHAM Finances, with the East Africa portfolio underperforming.

The Indian insurance businesses continued to perform well, achieving double-digit growth in both life and general insurance in local currency. The Malaysian businesses are finding some traction after a period of underperformance, increasing their overall new business contribution by 3%. New business production is not yet meeting expectations, but the mix of business improved at both businesses.

SEM’s VNB declined by 3% (up 6% on a consistent economic basis and excluding corporate activity). The relatively low growth on a comparable basis is largely attributable to the new business underperformance in East Africa.

Sanlam Investment Group’s (SIG) overall net result from financial services declined by 6%, attributable to lower performance fees at the third party asset manager in South Africa, administration costs incurred for system upgrades in the wealth management business and lower earnings from equity-backed financing transactions at Sanlam Specialised Finance. The other businesses did well to grow earnings, despite the pressure on funds under management due to lower investment markets.

New business volumes declined by 13% mainly due to market volatility and low investor confidence in South Africa. Institutional new inflows remained weak for the full year, while retail inflows also slowed down significantly after a more positive start to the year. The international businesses, UK, attracted strong new inflows (up 57%).

Sanlam Corporate’s net result from financial services increased by 4%, with the muted growth caused by a continuation of high group risk claims experience. Mortality and disability claims experience weakened further in the second half of the year, which is likely to require more rerating of premiums in 2019. The administration units turned profitable in 2018, a major achievement. The healthcare businesses reported satisfactory double-digit growth in earnings, while the Absa Consultants and Actuaries business made a pleasing contribution of R39 million.

New business volumes in life insurance more than doubled, reflecting an exceptional performance. Single premiums grew by 109%, while recurring premiums increased by a particularly satisfactory 56%.

The good growth in recurring and single premium business, combined with modelling improvements, supported a 64% (71% on a comparable economic basis) increase in the cluster’s VNB contribution.

Following a year of major catastrophe events in 2017, Santam experienced a relatively benign claims environment in 2018. Combined with acceptable growth in net earned premiums, it contributed to a 37% increase in gross result from financial services (41% after tax and non-controlling interest). The conventional insurance book achieved an underwriting margin of 9% in 2018 (6% in 2017).

As at 31 December 2018, discretionary capital amounted to a negative R3.7 billion before allowance for the planned B-BBEE share issuance. A number of capital management actions during 2018 affected the balance of available discretionary capital, including the US$1 billion (R13 billion) SAHAM Finances transaction. Cash proceeds from the B-BBEE share issuance will restore the discretionary capital portfolio to between R1 billion and R1.5 billion depending on the final issue price within the R74 to R86 price range approved by shareholders.

Looking forward, the Group said economic growth in South Africa would likely remain weak in the short to medium term future, and would continue to impact efforts to accelerate organic growth. The outlook for economic growth in other regions where the Group operates is more promising. Recent acquisitions such as the SAHAM transaction should also support operational performance going forward.

“We remain focused on executing our strategy. We are confident that we have the calibre of management and staff to prudently navigate the anticipated challenges going forward,” Mr Kirk concluded.

Details of the results for the 12 months ended 31 December 2018 are available at