In the rich agricultural land of western South Africa, IFC client Karsten Farms grows table grapes for Tesco—the leading food store in Britain, and also active in 13 other countries across Europe, Asia, and North America.
Karsten, which is privately owned, employs more than 5,600 permanent and seasonal workers, producing grapes, apples, pears, and other fruit crops. The tasty South African grapes it sells show why Tesco, recognized for its high environmental standards, is making a difference in the fight against climate change.
At a time when U.N.-sponsored climate change talks are underway in Durban, continuing until December 9, Tesco’s sustainable supply chain reveals the positive role the private sector can play in this critical issue.
Three years ago IFC began helping Karsten review its energy and water use, looking for new ways to cut costs, increase production, and reduce emissions. Seeking environmental measures that would bring bottom-line benefits, we focused on three key areas: refrigeration and cooling technology, worker housing, and water pumping.
A subsequent $1.2 million IFC-financed upgrade program is already paying off. Newly installed technology is decreasing Karsten’s resource use, making it more competitive in its industry and a better steward of the earth. It now needs to buy far less electricity—which in South Africa still comes primarily from coal.
“It was definitely a good investment,” says Karsten engineer Michael Holland-Muter. “We are already seeing the results.”
Before receiving IFC’s advice, Karsten paid the rand equivalent of $7.70 in daily power costs to light its refrigeration rooms. But now it has new high-efficiency LED lighting with automatic on/off functions costing just $0.36 a day. One of the world’s most promising green technologies, LED bulbs use a tiny fraction of the power of a current incandescent bulb and can last up to 25,000 hours, compared with 2,000 hours for a standard bulb.
Karsten is also in the process of installing 300 new solar water heaters to replace the electric geysers at its worker housing sites. These will save it the $4.95 it used to cost to run each geyser for just three days.
Using less electricity makes Karsten cleaner and greener—and a lower-cost producer of fruit. That’s what this win-win solution is being showcased as part of IFC’s participation in the Durban events, which also includes presentations at the December 3-4 World Climate Summit, a high-level gathering of business, finance, and government leaders being held alongside the official U.N.-sponsored talks.
Confronting climate change is a strategic priority for IFC, because it is interlinked with some of the toughest development challenges—such as food and water security and healthy. In fiscal 2011, climate-friendly investments accounted for 14 percent of the financing we provided to clients. Over the next two years, we plan to raise that proportion to 20 percent.