South Africa's 2023 budget: Promoting a greener economy with incentives for green investments

South Africa's 2023 budget, which was presented by Finance Minister Enoch Godongwana on February 22, 2023, includes several measures aimed at promoting a greener economy and encouraging investment in green projects.

One of the key incentives announced in the budget is a tax credit for companies that invest in renewable energy projects. The tax credit will be equal to 150% of the cost of investment in qualifying renewable energy projects, and it will be available to companies that invest in qualifying projects between 2023 and 2028. “The tax credit is expected to encourage investment in renewable energy projects and promote the growth of the green economy in South Africa,” says Enterprises University of Pretoria power and energy expert, Prof Raj Naidoo, head of the university’s Department of Electrical, Electronic and Computer Engineering.

“In addition to the tax credit, the budget also includes several measures aimed at reducing carbon emissions and promoting sustainable development. These include a carbon tax, which was first introduced in 2019, and a commitment to increase the share of renewable energy in South Africa's energy mix to 50% by 2030,” says Naidoo.

The budget also includes measures to support the development of green infrastructure, such as electric vehicle charging stations and renewable energy storage facilities. The government plans to establish a Green Infrastructure Fund to finance the development of such projects, and it will also provide funding for research and development in green technologies.

Another notable initiative in the budget is the establishment of a Green Skills Development Programme, which will provide training and skills development opportunities for individuals in the green economy. The programme will focus on developing skills in areas such as renewable energy, energy efficiency, and sustainable development.

“The 2023 budget is a significant step towards promoting a greener economy in South Africa. The incentives for green investments and the commitment to reducing carbon emissions and increasing the share of renewable energy in the country's energy mix are important measures that will help to address climate change and promote sustainable development,” says Naidoo.

In conclusion, South Africa's 2023 budget includes several measures aimed at promoting a greener economy and reducing carbon emissions. The tax credit for green investments, the commitment to increasing the share of renewable energy in the energy mix, and the establishment of green infrastructure and skills development programmes are important initiatives that will help to drive the growth of the green economy in South Africa. These measures are not only important for addressing climate change but also for promoting sustainable development and creating job opportunities in the country.

In keeping with national and international developments, Enterprises University of Pretoria has for the past two decades increasingly provided science-based, professional energy solutions across the entire energy value chain offering bespoke solutions in energy optimisation, measurement and verification, smart-grid research, solar feasibility and validation studies, power systems, clean energy, hydropower, technology and innovation management, energy modelling, policy studies, local legislation and regulations as well as demand-side management.