Upfront tax deduction

Section 12B of the Income Tax Act No. 58 of 1962 provides a tax deduction for qualifying assets used in the production of electricity from renewable sources in South Africa. This incentive allows businesses to reduce their taxable income by investing in renewable energy projects.

Under Section 12B, taxpayers can claim a 125% up-front tax deduction for all renewable energy projects, with no restrictions on generation capacity. This incentive applies exclusively to projects that generate electricity for the first time between 1 March 2023 and 28 February 2025.

THE BENEFITS

The opportunity

01

Investing in green energy helps address South Africa’s ongoing energy crisis, supporting the need for a reliable electricity and energy supply.

02

Contribute to reducing South Africa’s carbon footprint while supporting sustainable energy generation.

03

Directly stimulate economic growth by investing in renewable energy projects.

04

Earn attractive returns with the added advantage of tax deductions.

Fund details

The Fund will be mandated to own and operate a portfolio of renewable energy-generating assets that sell the generated electricity to creditworthy counterparties, which are bound by long-term power purchase agreements.

Targeted internal rate of return (IRR):

  • 15% ungeared pre-tax return (before the section 12B tax benefit)
  • 25% ungeared pre-tax return after the 12B tax benefit
  • +/-45% geared pre-tax return after the 12B tax benefit and gearing

Distribution:

Bi-annual proceeds from power purchase agreement (PPA).

Fees:

Management fee: A management fee of 2% per annum is payable to the fund manager on the capital invested.

Performance fee: 20% carry after repayment of capital at risk.

R 1 Million

Minimum Investment

10 years

fund term

Meet our team

Bradley Anthony

Bradley Anthony

Chairman of Investment Committee

Carmel Chinswami

Carmel Chinswami

Infrastructure Portfolio Manager

John-Paul Dicks

John-Paul Dicks

Infrastructure Portfolio Manager

Obakeng Mophosho

Obakeng Mophosho

Infrastructure Analyst

See all

Contact Us

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location

Fairtree Head Office 

Email: [email protected]
Tel: +27 861 760 760

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email

John-Paul Dicks

Email: [email protected]
Tel: +27 84 547 1139

GET IN TOUCH

Let us manage your investment journey

Take the next step toward building a resilient financial future. Our team is here to provide any guidance to help you achieve your investment objectives.

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