20 April 2023: As big energy consumers, shopping centres have traditionally been significant generators of greenhouse gasses, thereby contributing to the climate crisis. However, many shopping centre owners and management teams are working hard to shift this reality, using the large roof spaces of their buildings for solar power installations that massively cut their grid-powered electricity needs.
When businessmen, Hermanus and Danie Wessels, made the decision to reimagine and remodel the Blueberry Square Shopping Centre together with FNB’s Commercial Property Finance team, a commitment to energy efficiency was one of their top priorities. An innovative energy solution was key in delivering their vision to better serve the needs of the diverse communities in and around the Honeydew suburb.
And according to Kyle Durham, Head of Sustainable Finance & ESG Solutions at FNB, the decision to go green together with achieving energy efficiencies is what assisted their alternative energy funding application which ultimately led to FNB delivering the funding that Danie and Hermanus needed.
“For a number of years, the owners of Blueberry Square had encountered challenges in their attempts to transform the shopping centre into an energy efficient and appealing destination for shop owners and shoppers,” Durham explains, “mainly because of the lack of reliable and affordable renewable energy generation options combined with the inability of City Power services to deliver the secure energy capabilities they needed.”
“We could have compromised and scaled down our plans, only developing to the point that was still mostly supported by the available grid-supplied power,” Hermanus says, “however, we felt this type of compromise was not commercially viable for us, as the reduced revenues from a smaller centre simply didn’t make for a sustainable operating model.
Eventually, the significant developments within renewable energy, and specifically solar power generation and storage capabilities, meant that there was an opportunity for Hermanus and Danie to finally put their plans into action and develop Blueberry Square into a full-scale, energy efficient retail development in which tenants and shoppers would never have to contend with unsustainable power supply or the disruptive effects of loadshedding.
Unfortunately, though, they found their plans once again at risk of being scuppered due to challenges accessing the finance, they needed to fund the construction of the energy efficient and resilient retail destination that they envisaged.
“So, they turned to FNB,” Durham says, “and thanks to the innovative thinking of FNBs Commercial Property Finance team, and our desire to help entrepreneurs succeed – especially when they share our renewable energy commitment – Blueberry Square quickly went from a dream to reality.”
Durham explains that, despite the funding requirements of this project being very complex, because it involved taking a finished building, reimagining and renovating it, and then ensuring that it prioritised renewable energy, FNB was never put off. “In fact, we saw the diverse funding requirements as something of a challenge and, our teams worked closely together to deliver a viable solution at a very appealing price point.”
Hermanus says that the vision is for Blueberry Square is to ultimately be 100% sustainable and off-grid, but that there is still a process to be followed to achieve this state. “Currently, we are still receiving grid-delivered electricity from City Power,” he explains, “but this is supplemented by our large solar PV and battery installations, and we still have large generators on-site to give our tenants peace of mind that power interruptions in the future won’t impact negatively on their business operations.”
But he is grateful that FNB was willing and able to provide the innovative finance solutions needed to start Blueberry Square on its journey towards a fully sustainable future, and he says that what really stood out for him was the bank’s willingness to listen intently to his requirements, take the time to understand his vision, and then develop exactly the right finance solution to enable him to achieve the outcomes he wanted.
And Durham points out that the energy efficiency priority of the developers actually played a big part in realising that finance solution. That’s because, rather than seeing the renewable energy requirement as an additional challenge, FNB Commercial viewed that component as an opportunity to motivate for the rest of the funding needed.
“In the end, the Blueberry Square of today owes its existence to the collaborative spirit that is so pervasive across FNB,” Durham explains, “and it was inspiring to see how the teams from different areas of the business came together to overcome the complexities involved and deliver a bespoke solution. More importantly, that solution not only helped Hermanus and Danie achieve their vision, but also aligned with FNB’s own vision of transforming South Africa’s built environment so that it makes a tangible contribution to the realisation of the country’s vital sustainable economy.”
