. The IDC established a 'green' unit, where concessionary finance options include preferential interest rates (prime minus 3%) and capital breaks to allow enterprises to develop. . The IDC is currently engaging with two foreign Solar PV partners, who are willing to invest in South Africa and who have the necessary expertise. . The IDC is investigating the potential of renewable energy in neighbouring countries. According to Prof Uken (CPUT - Energy Institute) the cost of solar panels has escalated since the SANS standards were imposed. He stated that is doubtful if the panels would last ten years, and according to him these solar water geysers only last for three years. . Mr Thomas Schaal, Director: ESA-Meridian (Pty) Ltd was a shareholder of Isivunguvungu Wind Energy Converter (Pty) Ltd (i-wec). The company was established in 2009 and manufactured wind turbines, using German technology. The first turbine was successfully assembled and tested. The company was facing financial difficulties and found it difficult to get funding. As a start-up company, the enterprise was unable to provide the kind of balance sheet to get a guarantee for a loan. Local content was a prerequisite for loans. The company had requested several Government entities to consider providing support but had not received a response. The IPP procurement process did not support the development of the local industry and encourage SMME's to get involved in the renewable energy sector. . Members recalled that Isivunguvungo was one of the first companies to get involved in the renewable energy sector and raised concern that the company is facing closure. . According to Mr De Beer (SANEDI), Corporate Consultant, South African National Energy Development Institute (SANEDI) there is room for small- scale energy producers but consideration had to be given to who would purchase the product. Currently, energy could only be sold to ESKOM as the Municipal Finance Management Act (MFMA) did not allow local government authorities from purchasing electricity from other power producers. In addition, the legislation required municipalities to purchase the cheapest electricity available and renewable energy currently costs more than energy from non-renewable resources. He suggested that the Department of Cooperative Governance and Traditional Affairs (COGTA), the National Treasury and the DOE considered amending the MFMA to allow local government authorities to buy energy from IPP's. . The Department of Energy stated that they are currently working with SANEDI at the installation of mini-grid systems. The National Treasury had been approached to provide funding and the availability of international funding options is also being considered. . The Department of Energy stated that although it would appear that little progress was being made with regard to SARi, the main issue is that it is a cross-cutting exercise that requires an integrated approach. The Department is following a broad approach and need to ensure that an enabling environment is created and that all the issues are considered. . According to Mr van den Berg (Chairperson: SA Renewable Energy Council) localisation and household demand for renewable energy will increase. The cost of preparing bids is substantial but he did not think that bids at different levels of local content would significantly increase the cost. He agreed that access to financing is difficult for small and start-up enterprises. The banks were risk- averse and the plight of Isivunguvungo was a prime example of the problems of companies to secure adequate funding. . The DTI pointed out that they do have a product testing and product enhancement programme in place. Various incentives are available, depending on the size of the investment and the number of jobs involved. Companies are encouraged to submit applications. The programme could be used by small companies to finance the cost of component testing by the SABS. The DTI promotes local procurement rather than encouraging the import of foreign products and technology. . Members enquired if the core role players are working together, as they do not get the impression that there have been sufficient engagement amongst all the stakeholders. There appeared to be a degree of uncertainty in the sector and it is essential that the stakeholders engage with each other to deal with the issues and challenges experienced. . SAREC conceded that more engagement is necessary. According to SAREC the industry is under pressure and representatives had little time to devote to discussions. The DTI arranged regular discussion sessions and an indaba had been arranged. SAREC highlighted that the Energy Stakeholder Meetings convened by the PC on Energy is also very valuable. . Mr Venter (Banking Association of SA - BASA) agreed that BASA should have further engagement with SAREC. He disagreed that the banking sector had not done enough to encourage investment in the sector. However, market certainty is a prerequisite and initiatives should be applied consistently. Consideration should be given to the prevailing adverse economic conditions. There is a high level of over- indebtedness in the country and consumers were already over-burdened. The escalating cost of electricity made the installation of solar water heaters more viable. The 'green bond' concept allowed for added value if green technologies are used. However, the concept had not been adopted in South Africa. The 'green' economy was still in its infancy but was expected to develop rapidly. . According to BASA , bondholders are allowed to access the equity in their bonds to fund the installation of alternative energy systems in their homes but other solutions should be developed as the real estate market is also under pressure. . BASA pointed out that renewable energy is a recent innovation in South Africa. Reliable products and substitutes if equipment broke down had to be available. BASA further agreed that they need to work closer with the IDC and other funding institutions in order to work together to develop solutions. . According to BASA, SMME's and start-up enterprises are a higher risk. BASA confirmed that a toolkit for SMME's would be useful. The banking sector could consider developing products aimed at the SMME sector. . BASA acknowledged that they could do more to mitigate the risks associated with SMME's and start-ups. . Mr Justin Burnett, Managing Director - South Africa, Obelisk Group said that there need to be more clarity on what the market demand would be in the next ten years. Mr Burnett stated that he anticipates the development of an ancillary maintenance and support services sector but this aspect had not been given much attention. . Mr Theo Ltter, Executive, Actom Group stated that the purpose of the local content requirements is to create jobs. Existing businesses should consider expanding their operations to supply the contractors. He disagreed with the statement made by BASA that locally manufactured products were more expensive than imported products. . Members pointed out that a number of SMMEs has raised concern regarding the costs involved for SABS testing for products. . Members enquired if the core role players are working together as they do not get the impression that there has been sufficient engagement amongst all the stakeholders. There appeared to be a degree of uncertainty in the sector and it is essential that the stakeholders engage with each other to deal with the issues and challenges experienced. . The IDC administers a government-sponsored programme to encourage innovation. The IDC also has a venture capital programme to assist SMME's and start-up enterprises with funding. The major consideration is whether the product is commercially viable. The reasons for SMME's being regarded as high-risk included the higher marketing risk, limited access to big companies and the unwillingness of large corporations to listen to start-up enterprises with no track record. Start-ups and SMME's want to play with the big players but lack the necessary experience and financial backing. The BBBEE scorecard promotes skills development and access to big companies by SMME's. An example was a client of the IDC who manufactures solar water heaters and who established a training center to train people to install solar geysers.