Commercial businesses in South Africa who qualify for a loan of up to R100 million to fund energy efficiency or renewable energy specific projects amy also qualify for a loan rebate from Absa, who have teamed up with the French Development Agency (AFD) to offer this incentive.
The rebate forms up to 7% of the loan amount and will allow clients to use the funds to reduce their loan amount. Renewable energy projects that may qualify for funding include bio-gas, solar power, wind power and solar water-heaters. Energy-efficient projects that may qualify include the retrofitting or modification of a given company’s manufacturing processes, on-site heat and electricity generation, efficient lighting or the rehabilitation of power distribution systems.
Vonani Mabunda, Head of Lending Products at Absa Business Banking, says: “Absa’s decision to partner with the French Development Agency is intended to help South African businesses grow their bottom line and drive greater efficiency across their operations. The types of projects that would qualify for funding are all aimed at reducing companies’ electricity costs and carbon footprints.”
Absa is also able to assist clients in securing free energy audits through an entity called Private Sector Energy Efficiency (PSEE). Businesses which have a monthly electricity spend of between R62 500 and R750 000 qualify for a free energy audit. Those companies which have an annual electricity spend of R45 million or more also qualify for a 60% subsidy of their total energy audit costs.
One of the businesses which has so far benefited from the energy rebate is a fruit farm in the Western Cape. The farm has a number of individual refrigeration compressor rooms on site, which consumed around 89% of the site’s electricity. In order to reduce electriticy costs and reliance on the grid, the farm installed a 1 MWh rooftop Solar Photovoltaic (PV) system to provide some of the power to the refrigeration compressor rooms. Absa is proud to have given this particular client a rebate of over R1 million.
Mabunda concludes: “Absa is encouraging companies to partner with the bank to find innovative ways to do business. We have a strong appetite for this industry and for helping businesses grow their capacity. We hope to encourage the development of green energy projects both in South Africa and eventually across the continent.”
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