Review of pilot industrial parks against International EIP Framework SIA Working Group Steffen Felix, SP Sustainable Economic Development

2 Review of pilot industrial parks against International EIP Framework and EIP investment opportunities Assignment “Enabling investments towards EIPs in South Africa and Nigeria“ Collaboration UNIDO, GIZ, and dti Implementation partners: NCPC-SA and Sofies Work undertaken from October to December Selected pilot parks in South Africa, 2 in Nigeria Scope of work: 1.Review performance of park against international EIP Framework and identify/prioritize EIP opportunities 2.Provide training workshops on industrial synergies and resource efficient and cleaner production (RECP) 3.Identify EIP Investment Opportunities and prefeasibility studies for one of the parks (East London)

3 Three different pilot parks Brownfield Greenfield Park area Large area (> 1000 ha) Small area (< 200 ha) Industry sectors Companies from multiple sectors Companies from one or few sectors High tech Low tech Type of activity Production & manufacturing Commercial services Favourable Challenging Intensity of collaboration High intensity of collaboration Low intensity of collaboration Defined industrial area Dedicated industrial zone Integrated industrial-urban area Development stage Technology development Local conditions Each industrial park is unique Need for customised solutions and opportunities

4 International Framework for Eco-Industrial Parks Source: UNIDO, WBG, GIZ (2017). An International Framework for Eco-Industrial Parks.

5 Key benefits of eco-industrial parks Reduced use of raw materials, water, energy and chemicals (toxic) Minimized green house gas emissions and release of pollutants Reduced waste through resource circularity Reduced economic, environmental, social risks Improved competitiveness and profitability Shared recycling facilities Creation of good-quality jobs Improved workers health and safety Increased quality of life for communities Better access to new technologies and finances Beneficiaries Environment Industries Cities Management

6 Overview of three pilot parks Puthaditjaba Industrial Park Rosslyn Automotive Supplier Park East London Industrial Development Zone LocationMaluti-A-Phofung (Free State) Rosslyn (Gauteng) East London (Eastern Cape) Type of parkIndustrial Park Special Economic Zone Total area257 ha130 ha236 ha Management entity Free State Development Corporation (FDC) Automotive Industry Development Centre (AIDC) ELIDZ SOC Limited State-owned corporation owned by provincial government and Buffalo City Metropolitan Municipality Total number of industries

7 Methodology Review of industrial park against International EIP Framework Opportunity identification and training workshops EIP assessment, opportunity identification and training Prioritized opportunities for industrial park Action planning for prioritized EIP improvement opportunities Conclusions and recommendations Park management Tenant companies Industrial park characteristics Key issues affecting industrial park Company level: Resource efficient and cleaner production Park level: Industrial and urban synergies Current and intended performance Park management Environmental performance Social performance Economic performance Key actions Responsibility Timeline Comments Review against International EIP Framework Resource efficient and cleaner production Industrial and urban synergies Collaboration and communications with industrial park stakeholders Basic understanding on local context and industrial park

8 UNIDO’s EIP Assessment Tool Tool is part of UNIDO’S Toolbox on Eco-Industrial Parks Objective of EIP Assessment Tool: Assess an industrial park against an International Framework for Eco- Industrial Parks (UNIDO, WBG, GIZ, 2017) and subsequently prioritize, plan, manage and monitor their eco-industrial park initiatives. EIP Assessment Tool has been used to assess the current and intended performance of the three pilot parks in South Africa.

9 Puthaditjaba Industrial Park Review against International EIP Framework 24 opportunities identified in total - 10 opportunities prioritized TopicPriority EIP opportunities – Selection only Park management services Upgrade industrial park infrastructures and utilities. Key priorities: Buildings, water supply and treatment, electricity supply, roads Water National Cleaner Production Centre of South Africa (NCPC-SA) to identify water saving and reuse measures at tenant companies and support their implementation Waste and material use FDC to collaborate with municipality to clean up industrial park and keep it clean to increase attractiveness of park Social infrastructureFDC to strengthen security services in the Puthaditjaba Industrial Park Local community outreach FDC to expand Policy and Business Forum with community members to include other key opportunities and challenges affecting Puthaditjaba IP

10 East London Industrial Development Zone Review against International EIP Framework 17 opportunities identified in total – 12 opportunities prioritized TopicPriority EIP opportunities – Selection only Planning and zoning Incorporate the following in the master plan; climate change adaptation strategy, energy efficiency and renewable energy interventions and Eco-Industrial Park principles. Water Conduct resource efficiency and cleaner production assessments at park tenants at IDZ, including focus on water efficiency and assistance to implement opportunities. Water Set up a central wastewater treatment plant at the IDZ that will promote and facilitate recycling and re-use of industrial wastewater EnergyInvestigate renewable energy project in ELIDZ (e.g. wind, biomas, solar pv) Hazardous waste Investigate the construction of a dedicated hazardous waste landfill site nearby East London that is easily accessible logistically. Potential collaboration with Buffalo City.

11 Three opportunities were selected for pre-feasibility: Business development to support the reprocessing of waste plastics by Clariter: 80 tpa pilot plastic recycling facility was built in the ELIDZ for proof of concept Development of three downstream SMMEs to produce polishes, cleaning products and decorative candles, that can use up to 50% of Clariter’s product Securing sustainable water supply for ELIDZ by investigating three scenarios: Wastewater recycling and reclamation, seawater desalination, rainwater harvesting 360 ML p.a. water used by the ELIDZ; ± 204 ML is for industrial applications 57% of land is currently used, 10% is allocated for new developments => 33% available Intelligent street lighting in ELIDZ with smart monitoring: Replacement of 150 watt HPS lamps with LEDs Streetlight controllers with advanced sensor and networking capabilities East London Industrial Development Zone Pre-feasibility assessments

12 CLARITER Technology (only 1 site in SA) F ORMULATION Technology (available in SA) Product outputs Key inputs Solvents Oils Waxes Non-product outputs tons/month tons/month tons/month Cracking residue Metal degreasers Cleaning products Fire lighters Mosquito repellents (Potential) Users Lubricants Cosmetics Insecticides Decorative candles Insect repellent candles Shoe polishes Floor polishes Car polishes Wood preservatives Fruit coatings Investigating the potential use as heat source Waste plastics 80 tons per month (Potential) suppliers Plastic waste collectors and processors inside and outside the ELIDZ Process water BCMM through the ELIDZ, cleaned up via Reverse Osmosis (RO) internally to produce hydrogen captive (highest use), cooling tower makeup and process water for the hydrogen scrubber. Electricity BCMM through the ELIDZ for steam production and other equipment. Diesel Local suppliers; used for heating. LPG Local suppliers; used for flaring gas emissions. Added value of EIP concept Business development to support for reprocessing of waste plastics by Clariter

13 Securing sustainable water supply for the ELIDZ Water treatment facility SSF Module (available in SA) Outputs Potable water (Potential) applications Industrial applications only. Additional research is required in the ELIDZ to determine which tenants, and at what volumes would require potable standards (Potential) suppliers Rain Added value of EIP concept ELIDZ ± 90% water recovery ± 10% brine Sewage Seawater unlimited supplies BCMM Sewage Pipeline 270 ML p.a. currently available Wastewater – ML p.a. available Ocean Rainwater Industry feedwater 80% water recovery 20% brine Industrial applications only. Additional research is required in the ELIDZ to determine the water quality requirements of the tenants (e.g. salts content). Desalination Plant (available in SA) Potable water ± 1 litre fresh water produces ± 1,5 litres of brine (depending on the salinity and technology used) Replace potable supplies. Rainwater Harvesting (available in SA) Industry feedwater Possible potable water Depends on the treatment methods applied at a tenant and water quality requirements. Captive use by each tenant. 113 ML p.a. potentially available

14 Controllers plugged onto LED casings can provide: Light control Site specific air pollution monitoring Camera’s for traffic monitoring and increased security Sensors communicating with other sensors e.g. water leaks, etc. Intelligent street lighting in ELIDZ with smart monitoring Picture source: Trilliant LED technology available in SA (for local conditions) LED casings manufactured in East London ELIDZ can serve as a case study for further roll-out in major cities in SA

Business development to support reprocessing of waste plastics by Clariter Securing sustainable water supply for ELIDZ Intelligent street lighting in ELIDZ with smart monitoring CAPEX Pilot recycling plant: Proof of concept only SMME 1: R SMME 2: R SMME 3: R Potable from waste: R20M/ML Industry from waste: R17-18M/ML Seawater desalination:R26-27 M/ML Rainwater harvesting: investigate LEDS: Between R1 and R2 million Controllers: Confidential, but incorporated in pre-feasibility OPEX (per annum) SMME 1: R p.a. SMME 2: R p.a. SMME 3: Up to R p.a. Potable H 2 O: R7-10/kilolitre Industrial H 2 O: R5-8/kilolitre Seawater desalination: R8-17/kilolitre Rainwater: Low maintenance LEDs: Minimal Controllers: 10-15% of CAPEX Revenue / Savings SMME 1: 3.8 million p.a. SMME 2: To be confirmed SMME 3: To be confirmed Based on current ±R23/kl Industry feedwater: R4.7million/year Potable from seawater: 8.3million/year Rainwater: 2.6million/year (113 ML) 50% on LED replacements 75 % with controllers => R p.a. for electricity in the ELIDZ Simple payback period SMME 1: Less than one year SMME 2: Unavailable SMME 3: Unavailable Reclamation/recycling: 3-5 years Seawater desalination: > 10 years Rainwater: need more research months in large cities (globally results) Environmental benefits Reduced plastic landfilling Reduced virgin plastics Products free from toxins Water footprint reduction Reduced sewage to marine outfall Solids can be used for energy in a biogas digester Less electricity Less greenhouse gases Less air pollution Less water supply losses Social benefits Pilot Recycling: 50 jobs 100’s of indirect jobs e.g. waste collection, etc. 3 SMMEs: 31 jobs ± 10 jobs at a water reclamation/recycling plant Installation jobs for rainwater Increased security Real-time monitoring Cleaner environment Draft results of pre-feasibility

16 Learnings from applications of International EIP Framework „Where are we now, where do we want to be, and how do we get there?“ Present Future Past Econonomic, environmental and social performance Time Current performance Targed performance (International EIP Framework) Past performance Share, promote and learn from current achievements Actions and opportunities to support transformation into an EIP Transformation into an EIP is a process of continuous improvement Lower Higher

17 Each pilot park receives report with the consolidated results, including: Review of park against International EIP Framework Opportunity identification and training workshop Summary of prioritized opportunities park and companies Results from pre-feasibility assessments (ELIDZ) Proposed action plan to assist in implementation of selected opportunities Conclusions and recommendations Reporting on the results

18 Industrial Park level City level Collective RECP solutions Operation & Management of:  Common Infrastructures  Resource Supply (Water, Energy, Materials)  Environmental & Social Services Company level Individual RECP solutions Resource Efficient Cleaner Production (RECP):  Materials efficiency  Water efficiency  Energy efficiency Industrial Symbiosis Urban Symbiosis  Waste Management  Recycling industries  Corporate Social Responsibility UNIDO is a specialized agency of the UN with a mandate of Inclusive and Sustainable Industrial Developed, ISID. A prominent way of ISID has been through Resource Efficient Cleaner Production, RECP, to Eco-Industrial Parks, EIP, which fosters circular economy

19 RECP and industrial synergy training and opportunity workshops RECP and industrial synergy training and opportunity workshops were held with Puthaditjaba Industrial Park and Rosslyn Automotive Supplier Park Introduce RECP and to industrial synergies concepts, benefits, and resource materials, and provide (inter)national examples Identify and prioritize RECP and synergy opportunities for companies / park management through interactive group exercises Workshops supported the review against the International EIP Framework

20 International EIP Framework and supporting EIP Assessment Tool provides a solid and practical means to: Assess current and intended performance of different types of industrial parks Identify and prioritize EIP opportunities for both park management and companies A wide range of promising / feasible EIP opportunities exist for each park Improving economic, environmental, social performance of the park As proven also by the pre-feasibility assessments for the ELIDZ There is clear need for ongoing support to industrial parks in South Africa Support with implementation of priority EIP opportunities Identification and prioritization of EIP opportunities in other parks Challenges to the implementation of feasible opportunities exist Access-to-finance Capacities of park management to apply added-value services to their tenants Park have to deal with multiple priorities, both short-term and long-term UNIDOs Conclusions

21 The number of existing and planned industrial parks and SEZs highlight the significant potential for EIP development in South Africa. Industrial parks and SEZs face a number of common challenges which affect their economic, environmental, social performance and their risk profile. The EIP concept provides practical approaches and tools to address key challenges and needs of industrial parks and zones in South Africa, and convert challenges into opportunities. Stakeholders need to understand that the EIP concept is about the creating more resource-efficient and cost-effective industrial zones which are more competitive and risk resilient. EIP is very much a business-focused approach. A wide range of policies, strategies, regulations as well as stakeholders are relevant to EIP development in South Africa. Collaborative approaches towards integrating and implementation EIPs in policy mechanisms is critical. DTI Conclusions

22 Overview of two pilot parks Calabar Free Trade Zone Lekki Free Trade Zone LocationCross River StateLagos Type of parkFree Trade Zone Total area220 hectares3000 hectares Management entityGovernment (NEPZA/FMITI)Public/Private (Lagos State Government and Chinese World Wide) Total number of factories33 (operational)48 (operational) Upcoming EIP assessment for Lekki FTZ

23 Calabar FTZ Review against International EIP Framework

24 Calabar FTZ Review against International EIP Framework

25 EIP Framework helpful cornerstone for a systematic assessment and benchmarking but area of working conditions underdeveloped in the Framework Sometimes confusion as to the different standards (ISO 14001, EIP Framework, Water Stewardship etc) Dichotomy between park management and tenants in implementation of EIP. Buy in through low hanging fruits? Limited resources from park management need for external drivers to get started Need to link the EIP to incentives both national and international Great opportunity for DTI in South Africa to use EIP Framework for their own national policy. Greater guidance on implementation is needed  SOPs based on EIP framework (water, energy, waste etc.) Process needs sustaining rather than being a one-off exercise Financing a big issue. Getting finance community to attend workshop was difficult GIZ Nigeria considering whether they can use some of the EIP experience for their cluster work (outside of industrial parks) Timing was tight and made coordination with all stakeholders challenging Way forward: Knowledge sharing event for practitioners? Some observations by GIZ