16 Aug IDC, German Development Bank launch GEEF
The Industrial Development Corporate (IDC) and the German Development Bank (Kfw) have launched a R500 million Green Energy Efficiency Fund (GEEF).
The Industrial Development Corporate (IDC) and the German Development Bank (Kfw) have launched a R500 million Green Energy Efficiency Fund (GEEF). During the launch of GEEF IDC Chief Executive Officer Geoffrey Qhena said the intention was to encourage and promote investments in both energy efficiency and renewable energy in South Africa.
Energy efficiency should be a strategic priority for companies, particularly given the fact that South Africa was moving to higher, cost-reflective electricity pricing.
“We want to provide increased access to energy efficiency and renewable energy financing across all industry sectors. Setting up this fund with KfW is crucial for the country and a key addition to our portfolio of ring-fenced funds directed at a specific goal” said Qhena.
GEEF focuses on private sector companies registered and operating in South Africa and provides loans ranging from R1 million to R50 million at a concessionary rate of prime less 2%. GEEF allows for loan repayments of up to 15 years, depending on the energy efficiency or renewable energy technology. Standard IDC fees, credit policies and procedures apply.
Added Rentia van Tonder, Head of Green Industries SBU: “Funding is available to companies who plan to implement financially viable projects in South Africa. In other words, projects that will provide significant energy savings and/or emissions reductions, or will offset grid-connected electricity through renewable energy generation for self-use.”
“Financing of projects is based on global climate mitigation principles combined with specific IDC funding criteria, which will form the basis on which funding can be accessed,” said van Tonder.
Van Tonder said technical support will be provided, in conjunction with KfW, to applicants if required. “We have access to both local and international technical experts who will develop eligible enterprises by performing energy assessments, calculating financial benefits and supporting the selection of eligible equipment and enhanced performance technologies.”
Investing in energy efficiency ensures business competitiveness through the modernisation of industrial equipment and the use of energy efficient technologies, resulting in reduced energy and other costs while increasing profitability. Additional benefits include improved product quality, enhanced production capacity and improved company image due to carbon footprint reduction.
GEEF will present opportunities to lower energy costs, improve profitability and invest in new technologies that facilitate South Africa’s transition towards a low carbon economy. This in turn contributes to global climate protection, while supporting South Africa’s economic development and growth. Ultimately, greening South Africa’s industrial base will lead to long-term industrial competitiveness and job creation.
The fund supports the IDC’s alignment to government’s key initiatives: Industrial Policy Action Plan and the New Growth Path with a specific focus on growing the green economy.