HomeIndustry SectorsFinance and PolicyNedbank introduces new financial model to move agriculture sector to clean power

Nedbank introduces new financial model to move agriculture sector to clean power

S.African agricultural sector to move towards clean power for business operation

On Wednesday, Nedbank a funder of sustainable ventures in renewable energy, infrastructure and agriculture, announced a new funding model to assist and encourage South African farmers to integrate renewable energy and energy efficient projects into their agricultural businesses.

With power outages fast becoming a long-term reality for South African’s matched with electricity tariff increases, the agriculture sector has felt the impact on their bottom lines.

According to Nedbank, the need for back-up power as a result of load shedding has dipped into farming profit margins and threatens the survival of some sectors of the agriculture industry, Engineering news reported.

Offering solutions

The financial model is offered by Nedbank’s Commercial Renewable Energy Financing, which according to Nedbank is tailored to both existing and new clients that want to adapt their business models to include a cleaner and reliable source of power.

Nedbank head of business banking strategic initiatives Mark Boshoff  said: “By forming strategic partnerships with key stakeholders in the agricultural sector, we have gained a deep understanding of the challenges farmers face in implementing more sustainable practices on their running farms.”

In addition to providing creditworthy clients extended payback periods, the new financial model offers a 7% rebate on the loan through Nedbank’s partnership with the French Development Agency, subject to availability, Engineering news reported.

Extending services

Clients who required funding for energy efficient equipment, which could demonstrate verifiable energy savings in excess of 15% were also eligible for a 7% rebate, Boshoff added.

Boshoff said: “Through leveraging the relationship with the National Business Initiative, we are also able to offer our clients free access to its newly launched Private Sector Energy Efficiency programme.

“So far, clients walking this exciting journey with us include agriculture businesses installing renewable-energy solutions to reduce their carbon footprint, as well as clients wanting to run their operations completely off-grid, and smaller businesses whose sustainability is at risk owing to rolling blackouts.”

Reducing carbon footprints

In other agri news, South African-based agribusiness BKB announced in June, the installation of a ZAR8 million ($667,244) roof-mounted solar photovoltaic (PV) energy harvesting system to provide clean energy and reduce the carbon footprint of the South African wool and mohair industry.

Based in Nelson Mandela Bay, the agribusiness claims that the solar project, which is expected to generate 40% of the facility’s power needs, is going to be one of the biggest solar power installation projects in South Africa, the Western Cape Business News reported.

The solar PV systems are being installed on the roofs of the agribusinesses warehouse buildings, which house classing, handling and pressing facilities. The pitched roof sections are being retrofitted with an estimated 4,680 solar PV panels, each with a 100W generation capacity.

Ashley Theron
Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.