Tax-leveraged investment specialist Anuva Investments has successfully deployed funds raised through the Anuva Green Energy partnership to conclude the purchase of 23 solar projects, equivalent to 11 MW of power from independent power producer Decentral Energy.
The funds have been raised through a tax-leveraged structure and have allowed shareholders to benefit from the investment into Decentral’s solar projects by making use of the South African Revenue Services’ (Sars’) Section 12B tax incentive.
Section 12B of the Income Tax Act provides taxpayers with a tax deduction of up to 100% for investments into solar power plants.
This will be the first round of projects sold by Decentral, a solar and clean energy asset management company that owns, manages and leases solar power assets across South Africa.
The sale includes projects that have been built, owned and operated by the company or that are in its approved pipeline.
These grid-tied solar solutions are primarily structured on long-term power purchase agreements with the end-user.
The portfolio comprises retail shopping centres, residential estates and light industrial and commercial users who are contracted to buy electricity supplied by the solar plant on a monthly basis for terms of up to 20 years.
“These systems reduce our customers’ reliance on the electricity grid substantially, allowing users not only to save on electricity costs but also to decrease their carbon footprint by 25% to 40%,” says Decentral executive director Christian Bode.
The energy security crisis South Africa faces is said to have placed major pressure on the supply chain and skills availability of the independent energy sector. Bode says suppliers’ order books are booked up until July or August and that the capital injection provided by Anuva Green Energy through the portfolio sale will allow the company to re-invest and proceed with its growth strategy through the undertaking of new projects.
Commenting on the significance of the deal, Bode said: “Primarily, our focus will be on energy security and energy storage solutions for the commercial and industrial sector.”
“There is a considerable amount of investment required to overcome and replace Eskom generation,” says Anuva Green Energy CIO Zane De Decker.
Anuva Green Energy is a subsidiary of Anuva Investments, which raised considerable funds via Section 12J structures.
“Fortunately, we picked up on the solar tax incentive via Section 12B when Sars introduced it in 2016, and we have a few successful projects under our belt,” he says.
The tax-leveraged investment offering is said to have been well received by Anuva’s clients and with the addition of Decentral’s 23 projects, the portfolio comprises 55 projects valued at R325-million.