Delegates at the recent 5th Annual Africa ESG, Impact Investing & Sustainable Finance Summit highlighted the need to move away from outputs and outcomes, towards having a tangible impact, says Sayuri Moodliar, ESG Director at Open Access Data Centres and head of the sustainability function for WIOCC Group.
Focus on finance
Moodliar, who participated in the opening panel session at the summit, says there was a keen focus on financing mechanisms for ESG projects in Africa.
“The financing mechanisms that we're seeing as being very popular include bonds such as green bonds or blue bonds, as well as blended finance - a combination of private investors and public sector funds that are allocated together into a blended instrument. The benefit of that is where you might have the private sector stakeholder reluctant to invest in a project because they might see it as quite risky, having government or other public sector funds being allocated it spreads the risk and can encourage and attract investment,” she says.
“There was also discussion about structured instruments like sustainability-linked bonds and sustainability-linked loans, which are very popular as well,” she says. “In fact, WIOCC also recently entered into two sustainability-linked loans from development finance institutions. Linked to those loans are certain sustainability targets – in our case, our power usage efficiency and our green building certifications. When you meet those targets, then you get a reduction in the interest rate that you pay on the loan. Those are becoming very popular instruments and serve as a way for lenders to encourage companies that they're investing in to meet their sustainability targets.
“From an ESG perspective, the panelists in the opening panel discussion at the summit agreed, and raised that there is this understanding that we need to move away from just ESG outputs and outcomes and that we have to aim to have actual impact,” she says.
ESG in digital transformation
Moodliar says that for WIOCC and OADC, having impact means driving digital transformation in Africa.
For organisations like WIOCC and OADC, digital technology and specifically AI are set to have a profound impact, she notes: “The whole AI move is driving development and business opportunities for industries across the board. With these opportunities come new pressures on data centres and the power that will be required to support AI technologies.
“In addition to driving demand for data centres, there are also significant advantages that AI and other smart technologies like blockchain bring to the digital infrastructure sector. These include the ability to enhance efficiency, scalability and reliability. AI and machine learning also enable predictive maintenance and the optimisation of resource allocation.”
Moodliar highlights the use of renewable energy in data centres, noting there are limitations, particularly in edge data centres. “We recently unveiled an extensive solar installation at our data centre in Durban, but solar is more challenging in edge data centres,” she says. These smaller, edge data centres, rolled out across the country to improve latency, are often situated in shared facilities in urban areas where large-scale solar systems aren’t possible.
Moodliar says WIOCC and OADC are approaching this challenge by finding new approaches to green the environment. “Some of the potential solutions that we see in the industry are data centres partnering with property owners to provide renewable energy in office parks that they lease or operators entering into wheeling arrangements to feed excess renewable energy into the national grid you're in, potentially you have solar panels across the roofs of the office park for all tenants to use,” she says. “There are also other ways of ensuring your energy-efficiency, such as constant monitoring, designing data centres to have improved usage efficiency, and investing in more eco-friendly building materials.”
She says: “At OADC, we are also focusing on our green building certifications, so our new data centres will be designed and constructed in accordance with green building standards like IFC Edge and LEED, which require certain efficiencies in terms of water efficiency and energy-efficiency, as well as the use of materials that are low in embodied carbon.”
Moodliar notes: “We have a company-wide commitment to sustainability, even though achieving it is not always the most cost-effective approach initially. Green building materials can be harder to source and more expensive. However, green building and energy-efficient design have the longer term benefit that your building - and your organisation - are more sustainable.”
Share