SA’s biggest private hospital group by market value, Mediclinic, has inked a deal for up to £110m (R2.2bn) in local renewable energy, part of its commitment for carbon neutrality by 2030.
The agreement is with electricity trader Energy Exchange, the only platform able to connect businesses with electricity generated by SA’s independent power producers, the hospital group said on Friday.
Mediclinic, which also runs the biggest private hospital network in Switzerland, joins other large companies worldwide in a range of industries from Apple to Heineken that have pledged to cut emissions in recent years. The pledges come as companies face pressure for consumers, investors, lenders and employees to demonstrate their commitments to combat climate change.
Mediclinic said while it does believe renewable energy was important for the planet’s health, the agreement is likely to provide an economic benefit, as the annual tariff increases are expected to be linked to inflation.
The agreement will initially involve five facilities, including four hospitals and the group’s head office, with more facilities planned.
The group also said it aims to reduce consumption by investing in energy-efficient equipment and renewable energy sources, which will also assist in mitigating rising electricity costs.
All divisions are taking steps to reduce their electricity consumption intensity through the adoption of an internationally agreed standard that sets out the requirements for an environmental management system, CEO Ronnie van der Merwe said in a statement.
“This will lead to improved operational efficiency of technical installations; the introduction of various new energy-efficient and renewable technologies; and changes in employee behaviour regarding energy use,” Van der Merwe said.
Investment holding company Remgro is a founder and holds 35% of Energy Exchange, which acts as a market place where independent generators can sell their surplus energy to the industrial and commercial entities who need it.
At the end of Mediclinic’s 2021 year, Remgro held 44.56% of the hospital group’s shares and is therefore regarded as a controlling shareholder under JSE listing rules.
This makes the agreement announced on Friday a small-related-party transaction.
In its 2021 year, Mediclinic generated just less than a quarter of its £2.99bn in revenue in SA. It operated 74 hospitals, employed more than 30,000 staff and also has businesses in Switzerland and the Middle East.
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