South Africa launches $170m special economic zone for green technology

South Africa expects its new R2.4 billion ($170.5 million) special economic zone (SEZ) in Atlantis, a town in Cape Town Metropolitan Municipality, which was launched on Thursday, to attract large-scale investment that will create jobs and bolster manufacturing in the area and the Western Cape province.

The 124.5-hectare SEZ, designated for the establishment of a green technologies hub in the Western Cape, will oversee the manufacture of green technologies, alternative waste management, energy efficient technology and alternative building material, among others.

“The Atlantis Zone has already attracted four large green tech investors, which are fully operational,” said President Cyril Ramaphosa, who officially launched the Atlantis Special Economic Zone along with Trade and Industry Minister Rob Davies, Economic Development Minister Lindiwe Zulu, Western Cape Premier Helen Zille, Cape Town Mayor Dan Plato, local businesspeople, labour movements and civic society organisations.

“Gestamp Renewable Industries, which we visited this morning, was the first of these investments. The company invested R300 million and has created about 220 jobs in Atlantis.

South Africa
Ramaphosa at the launch of the Atlantis Special Economic Zone

“The other investors are Resolux, with an investment of R25 million, Kaytech with an investment of R130 million, and Skyward Windows with an investment of R50 million. In addition to secured investments, the Atlantis Zone has an investment pipeline valued at R2.4 billion,” said Ramaphosa.

According to him, the launch of the SEZ signals the dawn of “a new era” for the community of Atlantis, whose strategic location — access to major national roads and proximity to two ports — provides advantages for exporters.

“The Atlantis SEZ is expected to grow the green tech sector in the Western Cape more broadly and revitalise Atlantis as a key industrial node in the region. In the short to medium term, the zone is projected to create over 1,400 jobs in Atlantis.

“Through manufacturing, job multipliers are estimated to rise to about 4,500 for the West Coast region,” he said.

The launch of the SEZ comes as the South African government continues to work harder to make it easier to do business in South Africa, and as a result grow the economy, create jobs and reduce poverty.

According to President Ramaphosa, without significant economic growth, the country will not be able to create work for the people of the province and the country.

SEZs are geographically designated areas of a country set aside for specifically targeted economic activities, supported through special arrangements and systems that are often different from those that apply in the rest of the country.

The 2014/15 – 2016/17 Industrial Policy Action Plan (IPAP) in South Africa identifies SEZs as key contributors to economic development. They are growth engines towards government’s strategic objectives of industrialisation, regional development and employment creation.

The Atlantis Special Economic Zones is the ninth of its kind across the country. A 10th is coming up in Inkomazi in Mpumalanga.

“The SEZ programme is supported by a competitive incentive package, which includes, among others, a 15% corporate tax incentive, employment tax incentive, accelerated depreciation allowance, VAT and customs exemption, and infrastructure support,” he said.

“The special economic zones are key to unlocking the country’s competitive and comparative advantages. The programme has so far managed to generate R11.6 billion ($824 million) worth of private investments into the SEZs.

“There were 115 operational investors in the SEZs at the end of the second quarter,” said President Ramaphosa.