Dear 12J Investors
It’s been a while since our previous communication. Please find below a short summary of the status and progress made by the Futureneers 12J Energy Fund.
What happened the last 6 months (TL;DR)?
- We are proud to announce that since our last update, we have successfully commissioned another 8 solar plants, adding a further 1.5 MW to the solar portfolio.
- Our recent projects included 7 sites commissioned for ADvTECH, our first listed client. We also successfully executed a large residential estate project in KwaZulu-Natal.
- We are currently busy with the phase two roll-out of a potential additional 7 projects for ADvTECH.
Weather, operational issues and portfolio performance
February to April have been terrible weather months. Higher-than-usual rainfall across the country has led to substantially lower solar generation across most of our sites nationwide during this period.
In addition, we’ve had various operational and technical issues on some sites, which we have dealt with. We are also experiencing a substantial decrease in electricity demand from the client at our LimeRoc sites. We are in discussions with the business park on how to address this going forward.
The long and the short of it is: as we generate less solar (due to weather and decreasing client demand), we sell less — which impacts gross yield and ultimately our returns to investors.
This is, however, typical operational behaviour for any solar fund during its initial growth phase. As we grow and add more projects, the impact of individual site performance is increasingly hedged, and risk is better diversified across the portfolio.
As a whole, the portfolio has managed to keep yields in line with targets, kept costs under control, and we believe we are on track to meet our June 2026 yield targets, and therefore being able to declare a Dividend in September 2025 as per budget previously presented to investors during the previous dividend run.
New Pipeline
As mentioned above, our new pipeline has primarily focused on adding further projects within the ADvTECH portfolio. This has progressed slower than expected as we engage with the listed entity and its appointed engineering teams to design and implement solutions that make financial sense for both parties, while being underpinned by sound technical standards.
We are also in the process of securing a rental transaction by providing meters to a smaller municipality in the Northern Cape, in partnership with a municipal service provider that has been appointed to manage and improve collections through smart meters and smart wallets.
Through this “metering” partnership, we are able to offer 12J meter rental solutions while collecting payments directly via the smart wallet system, under our partners’ control — rather than being dependent on the municipality for payment. We will keep you updated on this venture, and we believe that once we can demonstrate bankability through controlling collections, the municipal space may open up substantially going forward, not only in respect of meters, but also small scale embedded solar projects.
Next Dividend Run
As mentioned above, we believe we are on track to pay dividends in September 2025, in line with, or very close to the estimated budget previously presented:
What is still keeping us awake at night?
Eskom continues to be an unpredictable factor across most of our projects. The best approach for now is simply to manage this risk as best we can.
Furthermore, many of our early projects were concluded on a “pay-per-use” basis. This means the client pays only for the energy it consumes. The risk here is that when the client’s business is under pressure and consumes less energy, our returns are negatively impacted. Theoretically, the option exists to feed unused energy back into the grid at a reduced rate. However, despite how this is portrayed in some news articles, the reality is very different. Very few municipalities offer a seamless plug-and-play feed-in solution. We have been trying for years to implement this on certain sites and have seen little success. Even where Eskom is the grid provider, the process is complex and expensive, and both feed-in and wheeling are being made very difficult.
This has prompted us to shift all newer contracts to a “take-or-pay” model, which includes a minimum offtake amount. This shifts a portion of the risk back to the client, requiring them to purchase a minimum amount of energy each month, regardless of actual usage. This model makes more sense for us as asset owners, though it is naturally more challenging to sell to clients. It also usually comes with an inherently lower PPA rate, but offers reduced risk compared to pay-per-use agreements. We will continue to apply this model as far as possible in future projects.
Final Remarks
Thank you all for your continued support. If you have any questions, please don’t hesitate to contact us at:
📧 jaco@futureneers.co
📧 deon@futureneers.co
Sincerely,
Jaco, Deon and the Futureneers Energy Team