GreenCape, Treasury launch R488m fund for green SMMEs
A R488 million Green Outcomes Fund (GOF) has been created to grow green small, medium and micro enterprises (SMMEs) in SA.
According to GreenCape, a non-profit organisation that drives the widespread adoption of economically-viable green economy solutions from the Western Cape and which manages the fund, the initiative is a first of its kind, which incentivises local South African fund managers to increase investment in green SMMEs.
The GOF is a partnership between National Treasury’s Jobs Fund and GreenCape, with knowledge partner the University of Cape Town (UCT) GSB Bertha Centre for Social Innovation.
The local catalytic finance partners of the fund are Mergence Investment Managers, Edge Growth Ventures, Conservation International Ventures and Business Partners South Africa.
GreenCape says the world urgently needs to move towards models where economic growth is decoupled from natural resource use, while supporting climate change mitigation pathways.
In South Africa, GreenCape notes, this means investment in businesses that can generate verifiable green outcomes, while creating jobs, including in energy, water, waste, infrastructure and land management.
National Treasury’s Jobs Fund partners with innovative, high-impact projects that contribute to accelerated job creation and offer practical and lasting solutions to SA’s employment challenges.
According to Najwah Allie-Edries, head of the Jobs Fund: “Through the Green Outcomes Fund partnership with GreenCape, we seek to be a catalyst for innovation and investment in activities which directly contribute to sustainable job creation initiatives, as well as long-term employment creation in the green economy.
“This initiative will also provide the Jobs Fund with valuable learnings and appealed to us, as public funds will only be triggered by the delivery of independently verified jobs.”
GreenCape points out the green outcomes have been developed in line with international impact investing standards.
“The Green Outcomes Fund aims to achieve clearly-defined green outcomes, encourage greater capital allocation to green businesses by local fund managers, and catalyse increased and higher quality, consistent reporting of green impacts,” says Megan van Vlaanderen, chief financial officer of GreenCape.
“GreenCape is the Green Outcomes Fund implementation partner, primarily accountable to the Jobs Fund for delivery and reporting on the green outcomes measurement and evaluation.”
UCT GSB’s Bertha Centre for Social Innovation led the design and fundraising for the GOF development and continues as the primary knowledge partner.
“We are excited about the ground-breaking role of the GOF in demonstrating an innovative financial model that combines de-risking SMME investing with demonstrated positive social and environmental impact. It’s a first of its kind in the international impact investing landscape and we are thrilled to launch this unique blended finance partnership in South Africa, which is made possible through local contributions only,” says Tine Fisker Henriksen, innovative finance lead at Bertha Centre for Social Innovation.
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