South African banking and investment services group Absa has announced that it is making R50-million available to provide solar energy grants to small and medium-sized enterprises (SMEs) that are its clients. More specifically, the grants will be offered to SMEs whose commercial properties are financed by the bank.

“SMEs make a significant contribution to job creation and economic growth in South Africa,” pointed out Absa Relationship Banking SME Business managing executive Ronnie Mbatsane. “However, in many instances, the operating environment over the past few years has made it very difficult for these vital enablers to grow and thrive.”

The purpose of the grants will be to help SMEs finance solar energy installations, to eliminate, or at least reduce, the impact of nationwide scheduled rolling power cuts, called loadshedding. The SMEs will not have to apply for, or take any other action to access, the grants. Absa will identify which of its clients are eligible for the grants and then contact them. The bank’s initiative is unique in South Africa.

“Loadshedding in particular continues to hamper the potential of many SMEs,” he highlighted. “Through these subsidies we are helping to put liquidity back into the hands of small businesses to power their business into full production.”

The bank has established a set of clear factors that will be used to determine the grant amount that will be offered to an SME. These grants, or subsidies as Absa also calls them, could reach up to R50 000 or 10% of the value of the overall solar power installation. Those SMEs that qualify for the grants will be invited to opt-in or opt-out of the scheme.

The bank is already active in the smaller scale renewable energy financing sector. It has a solar power offering for its Home Loan clients, and a personal loan offering to its retail customers to help them acquire alternative power sources. It can also provide tailored solutions, supported by experts in their fields, to help SMEs find the best alternatives for their specific needs.

Further, Absa has, under the Supplier Value Chain initiative, helped SME solar energy system installers finance the process of obtaining the South African Photovoltaic Industry Association’s ‘Green Card’ accreditation. This, the bank noted, supported the emerging township economies and allowed its SME clients to take part in the solar energy value chain.