Government has launched its Energy Bounce Back Loan Guarantee Scheme (EBB) to enable households and small businesses to invest in solar equipment.
The initiative was first announced at the 2023 State of the Nation Address (SONA) and reiterated by Minister of Finance, Enoch Godongwana, whereby government would “guarantee solar-related loans for small and medium-sized enterprises on a 20% first-loss basis.”
The EBB aims to generate 1 000MW in additional capacity while facilitating resilience to load shedding which includes power storage assets without generating capacity such as batteries and inverters. The scheme will operate under three mechanisms, targeting three different groups:
A loan guarantee for rooftop solar for SMEs and households for investment in rooftop solar which includes solar panels, batteries, inverters, and other installation costs.
A loan guarantee for Energy Service Companies (ESCOs) who provide leasing, installation, and power purchase contracts which will allow SMEs and households to switch to ESCO service providers without the need for loans to finance the full upfront costs of rooftop solar equipment.
Working capital loans for businesses that supply rooftop solar to meet increased demand.
Businesses wanting to apply for the scheme must have a minimum turnover of R300 million. They must also be registered with the Companies and Intellectual Property Commission and SARS for Value Added Tax (VAT).
The amount at which a business can borrow has been capped at R10 million however, business can also borrow a maximum of R30 000 for “resilience measures”. For households, the maximum loan amount has been set at R300 000.
Pricing of the loans will be capped at the repo rate (at the commencement of the loan) plus a maximum of 6%. Households and SMEs will have the option of approaching any participating bank.
The EBB will be available until the 30th of August 2024.
