Farmers & agribusiness
Solar funding for South African farms
Agriculture is the one sector with a live, open-ended government grant for on-farm energy. Here is what it pays, who it takes, and what to do if it will not take you.
Agro Energy Fund
Land Bank / DALRRD
A blended facility for commercial farmers: part of the project cost as a grant that is never repaid, the balance as a Land Bank term loan.
Grant 30% to 70% of project cost, capped at R500,000 to R1,500,000 by producer category
Market related, set by Land Bank on its cost of funds
- Land Bank switchboard:
- 012 686 0500
- Land Bank toll free:
- 0800 00 52 59
- General enquiries:
- info@landbank.co.za
Blended Finance Scheme
Funding constrainedLand Bank / DALRRD
Blended grant and loan funding for black agricultural producers, covering production and infrastructure including energy.
- Land Bank switchboard:
- 012 686 0500
Khula Credit Guarantee
SEDFA
A guarantee that stands in place of collateral with a partner lender. It rescues deals declined on SECURITY rather than affordability — which most borrowers never think to ask for.
Every route open to you.
Who each one takes, who it rules out, and the one thing to know before you pick it. Anything not listed here is missing because this kind of business structurally cannot use it. Term, rate, ownership and tax for every product are defined once on the funding hub.
Agro Energy Fund (grant + loan)
Part grant that is never repaid, part Land Bank term loan, as one facility.
- Who qualifies
- Commercial farmers with at least 80% of income from farming, on land they own or hold under a lease running at least as long as the loan
- Who it excludes
- Part-time farmers, government and SOE employees within a 24-month cooling period, politicians within 12 months, distressed producers, off-farm processors, refinancing of an existing system, and anyone who has already used another government energy programme
Worth knowing up front. One application per applicant, ever. Spend it on the right project rather than the first one — and note the grant percentage stops growing once the rand cap binds.
Blended Finance Scheme
Grant plus Land Bank loan for black agricultural producers.
- Who qualifies
- Black agricultural producers
- Who it excludes
- Non-agricultural applicants
Worth knowing up front. Parliament flagged funding shortages, delayed disbursements and over-commitment in June 2026 — roughly R1.5bn a year needed against R613m allocated for 2026/27. It is a real programme; be wary of anyone quoting you a timeline.
Asset finance
A term loan against the plant. You own it, and you owe for it.
- Who qualifies
- Any trading entity with the cash flow to service it and something to secure it against
- Who it excludes
- Entities with no balance sheet to lend against — bodies corporate and HOAs — and businesses with no taxable income, for whom the allowance is worth little
Worth knowing up front. Declined on security is not the same as declined on affordability. The first can be fixed with a guarantee; the second cannot.
Rental
You rent the plant. The funder owns it and maintains it.
- Who qualifies
- Businesses that cannot or do not want to carry the asset on the balance sheet, and anyone with no taxable income to point an allowance at
- Who it excludes
- Nothing structural — but it costs more in total than owning
Worth knowing up front. Maintenance sits with the funder for the term, which is worth real money on a remote site. Insurance does not — you arrange that yourself.
Rent-to-own
A rental that ends with the plant becoming yours.
- Who qualifies
- Anyone who wants ownership eventually but not the capital event now
- Who it excludes
- Nothing structural
Worth knowing up front. The buy-out is typically around 10%. At that moment maintenance becomes your problem and your tax position changes — model it before you get there.
PPA
You buy the electricity, not the system.
- Who qualifies
- Anyone with no capital, no tax appetite or no balance sheet — and bodies corporate, for whom it is usually the only workable structure
- Who it excludes
- Nothing structural, but it is the most expensive route across twenty years
Worth knowing up front. The escalation rate is the number that decides this deal. This market commonly runs 5% to 10% a year, and at 7% the payment roughly doubles over ten years. Get it in writing before you present it to anyone.
Water finance / WPA
The same structures applied to water: buy the equipment, or buy the water it delivers.
- Who qualifies
- Any site where water supply or quality is a constraint — and it can be bundled with the generation that runs it
- Who it excludes
- It cannot be funded inside the Agro Energy Fund, which covers the energy asset only
Khula Credit Guarantee
Not a loan. A guarantee that stands in place of collateral with a partner lender.
- Who qualifies
- Any SMME declined for want of security rather than affordability
- Who it excludes
- Deals that fail on affordability — a guarantee does not improve cash flow
Worth knowing up front. If a lender declined you, find out in writing whether it was on security or on affordability; only the first is what a guarantee fixes.
The Agro Energy Fund, in plain terms
A R1.21bn blended facility — R500m of DALRRD grant money alongside R710m of Land Bank lending. Part of your project cost arrives as a grant you never repay; the rest is an ordinary Land Bank term loan.
It has no fixed closing date. It runs until the money is fully drawn down, which makes it first come, first served rather than window-based.
What the grant is worth
Your producer category comes from a three-year average of turnover in your annual financial statements — not the latest year alone. Two years trading uses a two-year average; one year uses that year.
- Smallholder, R50,001 to R1m turnover — 70% of project cost, capped at R500,000
- Medium scale, R1m to R10m — 50%, capped at R1,000,000
- Large scale, R10m to R50m — 30%, capped at R1,500,000
- Mega commercial, above R50m — 30%, capped at R1,500,000
The cap matters more than the percentage
The percentage only runs until the rand cap binds. A medium-scale producer draws 50% — but past R2,000,000 of project cost the grant stops growing at R1,000,000 and every further rand is loan. So a R2m project gets 50% and a R4m project gets 25%.
Sizing the system around your cap is usually worth more than negotiating the rate. The smallholder cap binds at R714,286 and the large-scale cap at R5,000,000.
The trust-owns-the-land structure
A trust holding the land while an operating company farms it is the normal South African arrangement, not an edge case, and it works. The operating company applies and is categorised on its own turnover; a written lease from the landowning entity proves access to land.
Two things it triggers. Because the system is affixed to property the applicant does not own, it would ordinarily accede to the landowner by operation of law — a written non-accession agreement is the standard cure, drawn by your attorney, not by us. And where the landowning trust stands surety, that needs express authority in the trust deed plus a trustee resolution; plenty of older family deeds do not permit it.
If the lease is informal or verbal — very common — one has to be drawn and signed at an arm’s-length rental before submission. Budget two to three weeks. We ask about it at prequalification rather than at document collection so it does not ambush you at the end.
Who it will not take
Stated honestly, because these are worth knowing before you spend three weeks on a business plan.
- Under 80% of your income from farming, whether or not a farm manager is in place
- One application per applicant, ever — there is no second bite
- No refinancing, debt takeover or settling a system you already have
- Leased land where the remaining tenure is shorter than the loan term
- On-farm activity only: off-farm processors and industrialists are excluded, though on-farm processing qualifies
Excluded is not finished
Failing an Agro Energy Fund gate changes the structure, not the project. Asset finance has you owning the plant in days to weeks with the full Section 12B claim. A PPA needs no capital at all and is the route for a part-time producer, a short lease, an application already used, or a system you want to refinance.
How long it takes
Two to six months depending on complexity. It is a grant-backed facility with a full credit assessment behind it and a substantial document pack. If the system has to be in before the season, start now or take a faster structure and keep your one application for the next project.
The grant will not pay for your irrigation
The Agro Energy Fund funds the energy asset. It is not there to pay for irrigation infrastructure, and a bundled water-and-power package does not fit inside it.
How water and power finance together, and how to sequence them against the grant →
Good questions.
Can the Agro Energy Fund pay for my irrigation system?
No. It funds the energy asset. Pumps, pivots, boreholes and reticulation have to be funded another way — which is straightforward on asset finance or a rental, just not inside the grant.
Can I finance water and solar on one deal?
Yes, outside the grant: one quote, one credit assessment, one instalment. How to bundle the two, and how to sequence a bundle against the grant, is in the water finance guide on the blog.
How does Land Bank decide my producer category?
A three-year average of turnover from your latest annual financial statements where you have traded longer than three years. Two years trading uses a two-year average, one year uses that single year. Turnover below R50,000 or a greenfield operation is assessed with Land Bank’s own tools rather than the published table.
Can I apply twice?
No. One application per entity or applicant, ever. It is worth thinking about whether this project or a later, larger one is the better use of it.
I lease my land. Does that stop me?
Not by itself. Land Bank requires tenure at least as long as the loan, so a lease shorter than the term must be extended or the term shortened. You will also need a non-accession agreement, because the system attaches to land you do not own.
Can a trust apply?
The published criteria neither include nor exclude trusts — the machinery is written around directors, and a trust has trustees. Family farming trusts are everywhere in South African agriculture and Land Bank lends to them in its ordinary book, so the realistic expectation is yes. That is an expectation, not a published position, and we confirm it with a relationship manager before you spend money.
Two minutes, free, and non-binding. Every answer carries a route, including the ones that rule a programme out.
Before you rely on any of this
ArkFlow is not accredited by, empanelled with, or appointed as an agent of Land Bank, the IDC, DALRRD, the Department of Tourism, SEDFA or the NEF. Government and DFI programmes are applied for by you. We help you prepare and submit; you remain the applicant.
ArkFlow is not a financial services provider and does not give financial advice, and is not a registered tax practitioner. Nothing on this page is a quote, an offer of finance, an approval, or a recommendation to enter into any credit agreement.
Programme terms, grant availability and application windows change without notice. Figures shown are indicative and depend on the administering institution’s own assessment and on funds available at the time. Where a programme runs in windows we will not describe it as open unless a current window is confirmed.