• Affordable housing developer, Alley Roads, is piloting off-grid water solutions at its Khaya Lane development in Lebowakgomo, Limpopo
  • Water will be acquired through an offtake agreement from boreholes with an on-site water treatment plant and daily testing ensuring quality
  • Tenants to benefit from significant discounts and predictability through low annual escalations
    • Alley Roads will on-sell water at a rate 20% below the municipal rate, capping escalations at 3% based on the offtake agreement
    • Based on the average consumption, tenants will save an aggregate R1.5 million over the first five years of the project
  • Off-grid water solutions to be rolled out to other developments following successful conclusion of pilot project
  • Alley Roads’ drive is to ensure that as many of its affordable housing developments are moved completely off-grid, creating a stable power and water source for tenants, as well as ensuring stable annuity income for its funders.

Johannesburg, South Africa – Alley Roads (or “the Group”), a leading affordable housing developer, today announced that it is piloting off-grid water solutions at its Khaya Lane affordable housing development in Lebowakgomo, 45 km southeast of Polokwane in Limpopo. This follows the Group’s recent transition of more than 1 000 affordable housing apartments completely off the national power grid. 

Ivan Pretorius, CEO and founder of Alley Roads commented:

“Lebowakgomo is the first affordable housing development to my knowledge that will be completely off-grid from a power and water perspective.

“We believe affordable housing should also include affordable utilities, and by going off-grid, we are able to pass significant savings onto our tenants. What’s also important, is that costs are stable and predictable, allowing consumers to budget accordingly.

 “Stable water supply is increasingly becoming a concern as a result of deteriorating infrastructure. This not only result in long outages but could become a human health risk as wastewater treatment works are not adequately maintained.”

 According to The Green Drop Progress Assessment Report released by The Department of Water and Sanitation in December 2023, 64% of wastewater treatment works (“WWTW”) are at high or critical risk of discharging partially treated or untreated water into rivers and the environment.

The report found that the number of WWTWs in the high- and critical-risk categories have both increased since 2013 with negative environmental implications which pose risks to human health, e.g. cholera outbreaks that are normally associated with wastewater pollution of water resources.

Geological studies in the Lebowakgomo area have identified sustainable water sources from boreholes, which Alley Roads will purchase based on a water agreement. In addition, the Group is developing a water plant that will be maintained and tested on a daily basis to ensure it remains potable for human consumption.

Alley Roads will on-sell water at R34.00 per kilolitre, which represents a 20% discount to the municipal rate of R42.50 per kilolitre. Based on the average consumption of the development, this will save tenants an aggregate R1.5 million in water charges over the first five years of the project.

The Group anticipates capping escalations at 3% per annum, based on the offtake agreement, which is considerably lower than municipal charges.

Approximately 258 of the 236 units at Lebowakgomo is completely off the power and water grid, with the balance expected to have transitioned by the end of December 2024.

“Most of our tenants are professionals, including nurses and teachers, as well as students. The average rental per apartments is approximately R3 500 per month with an additional R1 200 per month for power, water, sewage and refuse removal.

“Going completely off-grid from a water and power perspective, provides our tenants with a stable resource and importantly, below market, predictable costs, that they can appropriately budget for,” Pretorius added.

All Alley Roads’ apartments are developed according to the International Finance Corporation’s EDGE (Excellence in Design for Greater Efficiency) green building standards. As “zero carbon ready” developments, they achieve more than a 40% reduction in on-site energy consumption.

These substantial energy savings translate into multiple benefits, including lower energy bills, a significant reduction in carbon emissions, and a decreased dependence on the national power grid, contributing to the long-term financial sustainability of tenants.

For Alley Roads, the incorporation of cutting-edge on-site energy saving technologies elevates the intrinsic value of the property. This announcement follows an earlier initiative by Alley Roads taking seven of its affordable housing apartments completely off the power grid.

Where possible, the Group plans on transitioning all of its developments to be completely off-grid, but will do so in phases, prioritising power security first, followed by water infrastructure. 

www.alleyroads.co.za

ISSUED ON BEHALF OF ALLEY ROADS BY:
Articulate Partners
Denise Mhlanga: denise@articulatepartners.com
Morne Reinders: morne@articulatepartners.com

About Alley Roads

Founded in 2009, Alley Roads is an award-winning, leading black-owned, national-scale property developer and landlord focused on three core areas:

  • Affordable housing
  • Student accommodation
  • retail property

Alley Roads’ vision is to remain a long-term holder of property for rental stock and unlock sustainable value from its assets under management through strategic developments and acquisitions. This vision is premised on prudent capital allocation, the ability to identify value-enhancing opportunities, a strong execution team, a firm approach to strategic partnerships, and long-standing industry relationships.

Secondary to the development and acquisition of the property assets, Alley Roads GreenTech is focused on providing all sites within the Group with award-winning green solutions and ensuring value to end-users.