Fund III is now open for investment

All money raised in Fund II was fully deployed
Don’t pay more tax than you have to
8.43% Average annual cash yield and 21.98% targeted IRR*

The first private equity fund that enables taxpayers (individuals, trusts, companies) and pension funds to invest in a portfolio of renewable energy-producing assets and benefit from the SARS-approved enhanced 100% Section 12B tax allowance.

The Funds are launched by Grovest, the pioneers of Section 12J, and one of the largest small cap fund administrators in South Africa, with R3.5 billion in assets under administration.

Fund II is closing in:

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Section 12B of the Income Tax Act No. 58 of 1962 allows for a tax deduction in respect of certain qualifying assets (owned and brought into use after 1 January 2016) to reduce the taxable income of the taxpayer. These qualifying assets must be used in the generation of electricity from renewable sources.

For the period 1 March 2023 to 28 February 2025, government introduced the Section 12BA tax allowance providing a 125% tax benefit.

The 12BA tax allowance has come to an end but the 12B 100% tax allowance is still in place.

Your investment*

100% Tax deductible on investment for trusts, individuals, and companies
Moderate risk investment
Targeted Internal Rate of Return (IRR): ≈ 21.98%+ (net of fees and taxes on risk capital)
Average annual yield: 8.43% p.a. on your investment amount
Average annual yield: 25.95% p.a on risk capital invested
Bi-annual income distributions

Strong deal flow
Long-term contractual cash flows from offtakers
Long-term power purchase agreement (PPA)
An ESG investment committed to sustainability
Supports the ESG goal of transitioning to renewable energy

*Target returns are based on current projections and are not a guarantee. The actual returns may be higher or lower than the target returns, depending on various factors such as market conditions, inflation, and other risks.

Do you want someone to walk you through how it works?

Fund Investment Mandate

To own and operate a portfolio of renewable energy-generating assets, that sells the electricity generated to creditworthy counterparties (sectional title complexes, industrial and commercial companies), that are bound by long-term power purchase agreements.

Your tax benefit as an investor
Taxpayers who invest in the Fund are entitled to claim the 100% Section 12B tax deduction on the full amount invested. The tax deduction is applicable to each taxpayer, and is to be claimed in his/her personal respective tax return.

Explore

See the bigger picture

Green energy has become an absolute necessity due to the ongoing lack of reliable electricity and energy supply in South Africa

Playing a role in economic growth and job creation

Reducing South Africa’s carbon footprint and contributing to sustainable energy generation

South Africa has the opportunity to become a leader in renewable energy

Twelve B Green Energy Fund III

Forecasted Cash Flows in the hands of a Limited Partner

						Years
	Notes	Avg	0	1	2	3	4	5	6	7	8	9	10
Equity Investment			(1 000 000)
Geared Co-Investment			500 000
12BA Tax allowance (100%)		45%	675 000
Risk capital			(325 000)
Net Income Before Tax			(325 000)	73 125	84 722	97 012	110 036	123 838	138 463	153 960	170 382	187 783	206 222
Sale of Future Cash Flows		13,5%											2 282 890
Management fees		2%		(30 000)	(30 000)	(30 000)	(30 000)	(30 000)	(30 000)	(30 000)	(30 000)	(30 000)	(30 000)
Setup Fees		1%	(10 000)	0	0	0	0	0	0	0	0	0	0
Performance Fees				0	0	0	0	0	(15 939)	(24 792)	(28 076)	(31 557)	(491 822)
PBT			(325 000)	33 125	54 722	67 012	80 036	93 838	92 524	99 168	112 306	126 227	1 967 290
Tax		45%	0	(14 906)	(24 625)	(30 155)	(36 016)	(42 227)	(41 636)	(44 626)	(50 538)	(56 802)	(673 900)
PAT			(325 000)	18 219	30 097	36 857	44 020	51 611	50 888	54 543	61 768	69 425	1 293 390

		Avg	0	1	2	3	4	5	6	7	8	9	10
Cash Yield
Before Tax
Average Annual Yield (Risk Capital)		25,95%	-	10,19%	16,84%	20,62%	24,63%	28,87%	28,47%	30,51%	34,56%	38,84%	605,32%
After Tax
Average Annual Yield (Risk Capital)		14,27%	-	5,61%	9,26%	11,34%	13,54%	15,88%	15,66%	16,78%	19,01%	21,36%	397,97%
IRR on Risk Capital
Before Tax		31,18%	(325 000)	33 125	54 722	67 012	80 036	93 838	92 524	99 168	112 306	126 227	1 967 290
After Tax		21,98%	(325 000)	18 219	30 097	36 857	44 020	51 611	50 888	54 543	61 768	69 425	1 293 390

be part of the returns

Installations are contracted to approved third party EPC (Engineering, Procurement and Construction) companies. Operations and maintenance is contracted to approved O&M parties.

Installations incorporate the latest technology in solar panels, inverters and battery storage, supported by proprietary software to manage and minimise energy utilisation.

Fund term: 10 years

Distribution policy: bi-annually:

Targeted internal rate of return (IRR):
21.98% net of fees and taxes on risk capital over the 10-year term.

100% Tax deductible:

The difference

Section 12B

An en commandite partnership structure which is very tax efficient.

Investments can be deducted from taxable income in the tax year in which the solar equipment starts to produce electricity.

Whilst the term of the Fund is 10 years, there is no minimum prescribed period to hold the asset to benefit from the 12B allowance.

Unlimited investment per annum for Individuals, Trusts, Companies and Pension Funds.

There is no capital gains tax. There may be a partial recoupment of the Section 12B allowance based on the sale value of the solar assets and/or exiting from the partnership.

Unlimited investment holding in Twelve B Green Energy Fund III.

Moderate risk

Far more tax efficient due to ‘flow through principle’ which facilitates a tax allowance claimed in the tax year in which solar assets comes into operation.

Section 12J

Fixed capital structure.

Investments can be deducted from taxable income in the tax year in which the investment was made.

Required holding the investment for a minimum of 5 years to get Section 12J benefit

Was limited to R2.5 million per annum for individuals and trusts; and limited to R5 million per annum for companies

Was not tax efficient for companies, resulting in capital gains tax and withholding tax on dividends.

No one investor or related party can own more than 20% of the Fund.

Can be high risk.

Not tax efficient.

Sign up

We invite savvy investors seeking to gain superior returns at moderate risk, minimise their tax obligation, and contribute to a greener future to join us as we pioneer this asset class.

The team

The fund team has diverse experience and expertise in investment banking, corporate governance and advisory and is backed by the track record and reputation of Grovest.