South Africa’s current energy constraints, and uncertainty around power supply is hampering small businesses’ ability to remain sustainable and grow.
As a result, SMEs are being encouraged by various experts to look to alternative power sources with Nazeem Martin, MD of a specialist risk finance company for formal SMEs – Business Partners, suggesting in an interview with RiskSA that SMEs look for contingency plans for alternative energy sources.
In light of this, we take a look at the Green Energy Efficiency Fund (GEEF).
The R500 million fund was launched by the national finance institution, the Industrial Development Cooperation (IDC), in 2011, with the aim of improving South African SMEs energy efficiency and the country’s green economic development.
GEEF supports projects that will provide significant energy savings and/or emissions reductions.
GEEF gives loans to entrepreneurs and businesses that want to invest in energy efficiency and renewable energy technologies. Priority is given to companies with yearly revenues of less than R51 million, with assets of less than R55 million and employing no more than 200 people.
Loan amounts vary from R1 million and R50 million to enterprises with energy savings, or self-generation. The loans are extended by GEEF at prime less 2% over a maximum tenure of 15 years.
While funding is not limited to any particular sectors – funding is given to businesses that are energy intensive including manufacturing, mining and agro-processing.
Benefits for businesses
The benefits of funding for individual enterprises include:
- Technical support for energy assessments based on the size and complexity of your proposed project.
- Investment risk reduction through energy efficiency validation checks.
- Modernisation of industrial equipment and the use of energy efficient technologies that result in reduced energy and other costs.
- Improved product quality and production capacity while increasing the company’s profitability.
- Improved company image due to contributions to carbon footprint reduction and South Africa’s sustainable development goals.
- Lower vulnerability to increasing energy prices.
- Increased company value.
- Energy assessments and audits to propose sustainable energy solutions and support the preparation of investment project proposals.
- Calculating the economic and financial benefits of the proposed investment.
- Supporting selection of eligible equipment and enhanced performance technologies.
How to apply
Applications can be made through the IDC website.
All information from the IDC official website.