By: Anna Majavu
Absa will soon offer all SMMEs a non-repayable grant of up to R50,000 to buy solar systems for their companies. Ronnie Mbatsane, Absa’s managing executive for SMME Business, told Vutivi News that the bank would offer all its current SMME clients a grant of 10% of the cost of a new solar system, up to a maximum of R50,000 each. Instead of just dishing out loans, which is what we do as a bank, we looked at what else we could do for the lower end of the market. The R50-million is just a start. We are serious about keeping SMMEs in business. Normally, they are the hardest hit when it comes to any crisis,” he said.
Absa SMME clients will be sent an invitation to opt-in or out of the subsidy scheme. “Looking at how much these alternative energy solutions costs, we felt that an injection of about R50,000 or 10% of the cost in the form of a subsidy, would assist the SMMEs to at least maintain production,” Mbatsane added. “We anticipate that with full take-up, we will be able to disburse just R50-million,” he said. The grant is mainly for SMMEs that want to switch to solar energy.
“What we are seeing is that the big solar systems that cost R150 – R200,000, are the ones that SMMEs cannot really afford. We have been financing generators and uninterruptible power supply (UPS) systems as business as usual in our normal space,” Mbatsane said. However, while any SMMEs that bank with Absa and have a yearly turnover of less than R20-million qualify for the subsidy, many are cash-strapped and will have to take out a loan from the bank to afford the other 90% of the cost of the solar system.
Mbatsane said the bank had promised that it would structure the loan repayments of those SMMEs so that they “do not find themselves in a cash flow crisis”. With demand for renewable energy installations rising rapidly, there has also been a big increase in people setting up businesses as solar system suppliers – not all of whom are above board. Absa will only give the subsidy to those SMEs which have solar systems installed by suppliers who have Green Card accreditation with the South African Photovoltaic Industry Association (SAPVIA).
Many of these accredited suppliers are SMMEs themselves. Absa has found commercial installers who are trustworthy, and experienced and have been installing solar systems for some time to train township entrepreneur solar installers and has sponsored these SMMEs to get Green Card accreditation with SAPVIA.