Section 12B Residential Solar Investment
Up to 106% returned in year 1
Introduction
Tranche Opens on 1 October 2025
Through a strategic partnership with Wetility—one of South Africa’s leading residential solar providers—we are offering investors the opportunity to gain exposure to a diversified portfolio of up to 3,000 solar-powered homes.
The capital raised will be deployed to fund the 2025 rollout and refinance of existing systems developed and managed by Wetility.
Backed by strong operational expertise, scale, and robust safeguards, this investment represents the most de-risked Section 12B investment in the market. Here’s why:
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The investment targets a return of 106% of investor capital within the current financial year. |
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Investors gain access to a highly diversified portfolio of up to 3,000 residential solar systems. |
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The structure includes a 17.6% first-loss protection to further safeguard investor capital. |
Introduction
Tranche Opens on 1 October 2025
Through a strategic partnership with Wetility—one of South Africa’s leading residential solar providers—we are offering investors the opportunity to gain exposure to a diversified portfolio of up to 3,000 solar-powered homes.
The capital raised will be deployed to fund the 2025 rollout and refinance of existing systems developed and managed by Wetility.
Backed by strong operational expertise, scale, and robust safeguards, this investment represents the most de-risked Section 12B investment in the market. Here’s why:
- The investment targets a return of 106% of investor capital within the current financial year.
- Investors gain access to a highly diversified portfolio of up to 3,000 residential solar systems.
- The structure includes a 17.6% first-loss protection to further safeguard investor capital.
RESIDENTIAL SOLAR OPERATOR
Wetility, founded in 2019, is transforming energy independence in South Africa by delivering smart, affordable solar solutions. Their goal: to empower 1 million customers with clean, reliable power and reduce dependence on the national grid.
Through their We-X app and AI-driven energy management, users can monitor usage and cut electricity costs by up to 90%. Backed by expert teams and strong partnerships, Wetility provides scalable solar systems tailored for homes and businesses.
With packages like the Beast Bundle from just R899/month, Wetility is making solar accessible and impactful.
CAPITAL RAISE TIMELINE AND PRIORITISATION
We are targeting a capital raise of R34.5 million for 24 October 2025. Once this target is reached, any additional interest will be placed in a first-come, first-served queue.
This phased approach prioritises early investors, thereby minimising the risk of capital not being deployed in time to qualify for the Section 12B tax deduction.
Our broader objective is to raise R250 million in equity by the end of February 2026, which, when combined with debt funding, matches the capital requirements of Wetility to meet their current rollout and refinancing needs.
KEY INVESTMENT BENEFITS:
1) 235% Tax Deduction
This investment has been structured to maximise tax efficiency by targeting an equity-to-debt ratio of 1:1.35. In practical terms, for every R1 million invested, we aim to raise R1.35 million in debt/partner contribution, effectively increasing the total allowable tax deduction to R2.35 million.
As a result of this structure, investors can claim:
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A 100% tax deduction on their capital invested, and |
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A 100% tax deduction on the associated debt. |
By way of illustration, an investor in the top tax bracket who invests R1 million will be entitled to a total tax deduction of up to R2.35 million (R1 million on the investment + R1.35 million on the debt). This equates to a SARS refund of approximately R1,058,000.
In essence, this investment returns the full amount of the initial investment plus R58,000 to the investor in this financial year.
2) FIRST LOSS PROTECTION:
To align interests and enhance downside protection, Wetility has committed 17.6% of the total capital/debt required. This contribution will be structured as a first-loss tranche, meaning it will absorb the first 17.6% of any losses incurred in the investment.
4) DIVERSIFICATION:
Investors will gain exposure to a highly diversified portfolio of up to 3,000 residential solar systems, spread across multiple geographic regions throughout South Africa. This broad diversification significantly reduces default risk and enhances the stability of returns.
In addition, Wetility is contractually obligated to remove and reinstall equipment from defaulting customers’ homes. This proactive approach helps minimise cash flow disruptions and protects the overall performance of the portfolio.
3) DEPLOYMENT:
Wetility has a funding requirement of over R500 million to support the refinancing of a portion of its existing portfolio and to expand solar installations for its rapidly growing customer base. Given this substantial capital need, we are confident that all funds raised will be fully deployed within this financial year.
5) CONTRACTUAL EXIT:
As part of the investment structure, Wetility is contractually obligated to acquire the solar asset portfolio at the end of year 10 at a predetermined value.
6) CASH FLOWS:
Investors are projected to receive an average annual cash yield (excl. the tax benefit) of between 14% to 17% pre-tax and 3.5% to 5% post-tax for 10 years, in addition to receiving 106% of their capital back in year one.
2) FIRST LOSS PROTECTION:
To align interests and enhance downside protection, Wetility has committed 17.6% of the total capital/debt required. This contribution will be structured as a first-loss tranche, meaning it will absorb the first 17.6% of any losses incurred in the investment.
3) DEPLOYMENT:
Wetility has a funding requirement of over R500 million to support the refinancing of a portion of its existing portfolio and to expand solar installations for its rapidly growing customer base. Given this substantial capital need, we are confident that all funds raised will be fully deployed within this financial year.
4) DIVERSIFICATION:
Investors will gain exposure to a highly diversified portfolio of up to 3,000 residential solar systems, spread across multiple geographic regions throughout South Africa. This broad diversification significantly reduces default risk and enhances the stability of returns.
In addition, Wetility is contractually obligated to remove and reinstall equipment from defaulting customers’ homes. This proactive approach helps minimise cash flow disruptions and protects the overall performance of the portfolio.
5) CONTRACTUAL EXIT:
As part of the investment structure, Wetility is contractually obligated to acquire the solar asset portfolio at the end of year 10 at a predetermined value.
6) CASH FLOWS:
Investors are projected to receive an average annual cash yield (excl. the tax benefit) of between 14% to 17% pre-tax and 3.5% to 5% post-tax for 10 years, in addition to receiving 106% of their capital back in year one.
RETURN PROFILE & CASH INFLOWS
This investment is designed to deliver consistent annual income over a 10-year period, alongside an initial SARS tax refund in year one.
Below is the projected return and cash flow on the investment in the scenario where both investor capital and debt have been deployed. The figures in *green demonstrate the combined yield an investor will earn, over the specific period, after having paid income tax and debt repayments.
FEES
| Management Fee: | 2.25% p.a. |
| Performance Fee: |
Zero performance fee within the first 4 years. Thereafter, 15% above a hurdle of the investment amount, calculated and charged annually with a high-water mark (with catch-up) – see explanation. In addition, a performance fee of 20% based on the profits from the sale of the solar assets (accounting for depreciation of the assets over the term of contract with the customer). |
| Debt Raising Fee: | A one-off fee of 2% of the total debt amount, payable upon the successful securing of the debt facility. |
All quoted returns are net of fees.
Performance Fee Structure Explained
We earn a performance fee annually on returns generated above the investment amount, divided by the total average term of the power purchase agreements (PPA) signed with the end customers. For example, if the average PPA term is 10 years and an investor contributes R100, the annual hurdle is R10.
If we deliver R12 in year five, a performance fee of 15% would apply to the R2 excess (R12 minus R10). If the return in year six is R5, no performance fee would be charged. For us to earn a performance fee in year seven, we would need to return more than R15.
FEES
| Management Fee: | 2.25% p.a. |
| Performance Fee: |
Zero performance fee within the first 4 years. Thereafter, 15% above a hurdle of the investment amount, calculated and charged annually with a high-water mark (with catch-up) – see explanation. In addition, a performance fee of 20% based on the profits from the sale of the solar assets (accounting for depreciation of the assets over the term of contract with the customer). |
| Debt Raising Fee: | A one-off fee of 2% of the total debt amount, payable upon the successful securing of the debt facility. |
All quoted returns are net of fees.
Performance Fee Structure Explained
We earn a performance fee annually on returns generated above the investment amount, divided by the total average term of the power purchase agreements (PPA) signed with the end customers. For example, if the average PPA term is 10 years and an investor contributes R100, the annual hurdle is R10.
If we deliver R12 in year five, a performance fee of 15% would apply to the R2 excess (R12 minus R10). If the return in year six is R5, no performance fee would be charged. For us to earn a performance fee in year seven, we would need to return more than R15.
How to invest?
By simply completing the investment form, Jaltech’s dedicated team will take you through the investment process.
Disclaimer: The contents of this document does not constitute and should not be construed as an offer to subscribe for shares or investment, tax, legal, accounting and/or other advice. For advice on these matters consult your preferred investment, tax, legal, accounting and/or other advisers about any information contained in this document. All mentioned returns in this document are estimates at current tax rates, and past performance is not an indication of future performance. All returns and referencing to investor(s) is with reference to an investor(s) who is in the highest tax bracket.
All reference to investor(s) assumes the investor(s) is a natural person with an income tax rate of 45%.
