New green energy fund offers investors huge tax break benefits

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President Cyril Ramaphosa announced during his State of the Nation Address (Sona) that tax incentives are set to be unveiled for households and businesses tapping into solar energy by installing rooftop panels.

The incentives would aim “to unleash businesses and households to invest in rooftop solar” and will be detailed in in Finance Minister Enoch Godongwana’s Budget Speech on 22 February.

“National Treasury is working on adjustments to the bounce-back loan scheme to help small businesses invest in solar equipment, and to allow banks and development finance institutions to borrow directly from the scheme to facilitate the leasing of solar panels to their customers.” – President Cyril Ramaphosa

On Tuesday, Grovest launched a solar investment fund that offers investors huge tax benefits in terms of Section 12B of the Income Tax Act.

Grovest CEO Jeff Miller explains how the venture capital company’s “Twelve B Green Energy Fund” works.

“12B has been around since 2016, but now we’ve managed to create a structure which is a partnership structure typical of private equity funds, which is a ‘general partner limited’ partner.” – Jeff Miller, CEO – Grovest

Investors can invest directly into the partnership which owns the solar assets, which then sells the electricity it generates to offtakers. In doing so the investor can not only claim the allowance in the year in which the solar energy starts being produced, but they also get a biannual distribution of the profit that is generated from selling the electricity.” – Jeff Miller, CEO – Grovest

Miller says the Fund is suited for individuals, companies and trusts, as well as provident funds in terms of Regulation 28.

He explains that it will be highly regulated, being registered as a Category 2 financial service provider with the Financial Sector Conduct Authority.

“Where the solar equipment generates less than 1MW you can write it off in less than one year, and where it creates more than 1MW you write it off over three years…” – Jeff Miller, CEO – Grovest

“The Twelve B Green Energy Fund is focusing mainly on below 1MW because its diversification of the solar plants which makes it very much a moderate-risk fund.” – Jeff Miller, CEO – Grovest

View original article here.

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