While loadshedding has long been the clearest evidence that South Africa is in the midst of an energy crisis, there is more to that crisis than just uncertainty of electricity supply.

The recent significant increases in the oil price, which filtered down to consumers and businesses in the form of fuel price hikes, is another example of the broader energy crisis facing not just South Africa, but much of the world.

According to Malusi Mthuli, Provincial Head KZN: FNB Commercial Property Finance, the effects of this energy crisis are not only being felt by households.
Businesses, industries, and entire economic sectors in South Africa are coming under increasing pressure as a result of electricity insecurity and stellar increases in fuel costs. And the country’s property sector is certainly not immune to these pressures.

“While the link between energy and property may not be immediately apparent to most people, it is actually very significant,” Mthuli explains, “and the impact of construction downtime due to power outages, sharp spikes in material costs due to fuel price hikes, and growing demand by buyers and tenants for buildings with enhanced energy security, has been felt across the sectors, most notably by developers, construction firms and landlords.”

And Mthuli says that the challenges are unlikely to end anytime soon, given that energy initiatives often take a long time to implement, and are also very costly,” he explains, “which means that energy costs, in general, are likely to keep going up for the foreseeable future.”