In his Opening of Parliament Address on 18 July 2024, President Cyril Ramaphosa touted a “renewable energy revolution” in South Africa that the government expects to be the most significant driver of growth and job creation in the decades to come. He signalled unequivocal support from the GNU for the country’s renewables sector, which has lagged significantly behind similarly industrialised countries under the previous administration. Ramaphosa noted: “We already have a huge pipeline of renewable energy projects, representing over 22 500MW of new generating capacity, estimated to be worth around R400 billion in new private investment.”
Amendments to licensing requirements and South Africa’s commitment as a beneficiary of the Just Energy Transition Partnership (JETP) have paved the way for an acceleration in large-scale renewable energy projects and the unlocking of new funding opportunities. In a changed landscape, investors, operators and original equipment manufacturers (OEMs) are poised for this long-awaited boom in the renewables sector.
“Key to the success of these exciting projects is going to be the effective safeguarding of the OEMs’ intellectual property (IP), their blueprints for design, implementation and management, as well as all the source software involved,” says Guy Krige, Executive Risk Consultant at ESCROWSURE. “From the build through to the day-to-day operations, the renewable energy sector demands substantial investment in advanced technologies, from wind turbines and concentrated solar power to sophisticated battery storage. Therefore, IP protection through technology and software escrow is critical to ensuring investor confidence, as well as business continuity and risk management for the operator.”
This is an area where ESCROWSURE has already been operating in South Africa for almost a decade. Krige explains: “Renewable energy projects are highly dependent on proprietary technologies, including innovative solar panel designs, advanced wind turbine software and energy storage. We have several clients in the South African renewables sector where either the investors or operators have initiated an escrow agreement to mitigate the risks of their third-party supplier encountering unforeseen circumstances. Globally, we have seen instances where the OEM, which holds all the IP, goes out of business or is subjected to an unexpected merger or acquisition. Technology escrow ensures that the IP assets of the renewable energy plant are securely held and only released under specific conditions, protecting the interests of both technology providers and licensees.”
The JETP initiative alone plans to mobilise $8.5 billion in its first phase to help power up South Africa’s transition to a climate resilient economy and prevent 1-1.5 gigatonnes of emissions over the next 20 years.
Krige concludes: “If we look at the planned scope and scale of the upcoming investments, then cost-effective technology and software escrow is not optional; rather, it is a vital safeguard for operational resilience and investment confidence when it comes to the development of South Africa’s renewables. One advantage of lagging behind other countries is that we can draw on the tried and tested global best practices such as escrow as we now build our vibrant and sustainable sector. ESCROWSURE is the only recognised and trusted independent third party in South Africa that protects both investors and operators in the South African renewable energy sector. Our risk consultants have years of experience in evaluating the risk associated with contracts in this sector working with our clients in the industry and are able to put together a cost-effective solution. We are offering free risk analysis to help protect this new industry in South Africa. Contact us for more details."
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ESCROWSURE
The purpose of Technology and Software Escrow - protecting your organisations Business Continuity. Many organisations are entirely dependent on third party Software Products for their mission critical business processes and functions. This dependency constitutes Operational Risk. It is crucial for such Software End-Users to mitigate their exposure to such risk.
An escrow arrangement is the most cost-effective tool for protecting the interests of both parties – the Software End-User as well as the Intellectual Property (IP) of the Software Supplier.
Constituted in South Africa in 2003, Escrow Europe (Pty) Ltd t/a ESCROWSURE is South Africa’s leading software escrow service provider and is dedicated to the highly specialised practice of locally and internationally effective Software Escrow arrangements, tailored to manage the operational risk associated with an organisations absolute dependency on proprietary Software. The sole focus of ESCROWSURE is on quality software escrow arrangements - in escrow terminology referred to as Active Escrow.
With Active Escrow, Intellectual Property (IP) such as software source code and technical documentation is not only securely vaulted but is also professionally verified and updated on a routine basis.