As energy costs soar, farmers feel the pressure to find sustainable solutions that keep their operations profitable. In this episode, we break down the Land Bank’s Agro-Energy Fund – a powerful blended finance option designed to help farmers access alternative energy sources.
Craig Harrison, the provincial head of Land Bank in the Western Cape, joins us to guide listeners through each step of the application process, from assessing energy needs to building a strong relationship with your Land Bank manager.
What is the Agro-Energy Fund?
“The Agro-Energy Fund,” Harrison explains, “is specifically for energy solutions,” with grants provided on a sliding scale per producer category. While grants do not require repayment, loans from the Land Bank do. Repaying loans, Harrison emphasises, helps sustain this fund for future applicants.
So, where should interested farmers start? First, assess your energy consumption to understand if alternative solutions could benefit your operation. “Get an energy expert or accredited service provider to conduct due diligence on your energy needs and costs,” Harrison advises.
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Keep projections simple and honest
Following the energy assessment to identify the farm’s current energy usage and costs, engage a specialist to obtain a report from an accredited energy expert detailing the specific energy solution and its costs.
Next, contact a relationship manager and Land Bank, Harrison advises. They will be able to guide you through the requirements.
One of the most important parts of the application is presenting a five-year cash flow projection.
Harrison recommends farmers keep their projections “simple and honest”, using monthly breakdowns for the first two years and annual totals for the last three. He also suggests using your historical financial information to estimate future earnings and expenses accurately.
“Make sure to include all your payments, instalments, income, and expenses. It’s important not to overstate income or understate expenses. If your energy solution reduces electricity costs, show that in your projections and include the loan instalments,” he shares.
In this episode, Harrison also discusses:
- The National Energy Regulator of South Africa (Nersa);
- Making sure all supporting documents are submitted on time and more.
Want to know more? Dive deeper into the episode and gain insights from the award-winning Farmer’s Inside Track, officially recognised as Africa and the world’s best podcast at the 2024 Digital Media Awards presented by WAN-IFRA, the global press organisation.
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