Catalytic Finance Partners


The world urgently needs to move towards models where economic growth is decoupled from natural resource use and climate mitigation pathways. In South Africa, this means investment in businesses that can generate verifiable green outcomes, whilst creating jobs, including in energy, water, waste, infrastructure and land management.

Through a partnership officially signed on 31 January 2020 between National Treasury’s Jobs Fund and GreenCape, the Green Outcomes Fund (GOF) provides outcomes-based matched (concessional) funding to local investment funds (our Catalytic Finance Partners) to support investments into local SMMEs that make a demonstrable contribution to South Africa’s green economy, as well as job and enterprise creation in priority impact areas. This is also made possible by catalytic support from the FirstRand Foundation.

Purpose of the Green Outcomes Fund

The aim of the GOF is to incentivise new approaches and financing models by impact investors in targeting high potential and fast-growing SMMEs operating in South Africa’s green economy. The funding must enable lending and investment on terms and to SMMEs which would not be feasible without the GOF’s support. The GOF will ultimately blend concessionary funding (in the form of grants) with private capital, thus enabling participating CFPs to develop and adapt their SMME investment criteria and support services in ways that were not previously possible – realising greater impact in terms of the types of SMMEs funded and green outcomes created

Structure of the Green Outcomes Fund

This structure is based on the following principles:

  1. CFPs invest match funding into green SMMEs. They will invest in SMMEs according to the fund’s own particular delivery model and disbursement policy.
  2. SMMEs achieve outcomes, (such as green jobs) which are reported to the GOF on a quarterly basis. Outcomes will be assessed in relation to an outcomes-based contract signed between the GOF and each CFP. The GOF will monitor the achievement of these results and the fulfilment of the contracts over time.
  3. The GOF verifies outcomes and disburses capital quarterly on the basis of demonstrated green outcomes created.
  4. The CFP uses outcome payments to de-risk investments, support SMMEs, and invest further in green SMMEs. The outcomes payments will be targeted at reducing the risk and cost of reaching green SMMEs previously excluded from consideration. The GOF intentionally allows CFPs flexibility (within defined parameters) in how they allocate this funding. In doing so, the GOF is able to identify the most prominent barriers providing finance to green SMMEs. The use of outcomes payments includes business development support; technical assistance, training, and mentoring; in-house technical expertise; offering innovative pricing models that reduce interest rates based on additional green; subsidised cost of capital to SMMEs as well as on-lending and/or investing.

Flow of funds

The project is funded through a grant and matched investment funding from the CFPs. The matched funding from CFPs flows to the green SMMEs in the form of investment through debt or equity. The grant flows to the GOF and is disbursed to the CFPs after verification of green jobs by the GOF’s Investment Committee (IC) and the grant funder. The grant will be used to support CFPs in increasing access to finance for SMMEs upon creation of green jobs and external monitoring and evaluation, knowledge management and trust administration include the costs incurred by the GOF.

Current Calls for applications

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If you are a registered investment fund investing in small, medium and micro-enterprises (SMMEs) in the green economy, and would like to accelerate your green investments with access to catalytic funding, please subscribe to the Calls for Applications newsletter to receive notifications on open call. For queries, please e-mail
The GOF’s support will assist the CFPs in building a successful portfolio of green SMMEs and track record of impactful green investments, thereby driving more capital into the ecosystem. Other benefits include:
  • The provision of grant capital to implement new derisking strategies to unlock investment in green SMMEs.
  • The development of a nascent local impact investing industry through the provision of additional funding tied to social and environmental outcomes. This will support existing CFPs to develop new products or venture into new investment areas.
  • Supports the sourcing of green SMMEs through GOF partners
  • Provides technical support on green issues
  • Enables local fund managers to invest with greater efficiency and risk mitigation, provided they continuously deliver green impact
  • Improves SMME viability through access to business development services
  • Assists in funding green SMMEs previously excluded from consideration
  • Subsidizes investment in SMMEs achieving green outcomes
  • Alignment to SDGs
  • Providing grant funding may enable CFPs to preferentially attract additional investment capital.
  • The adoption of a common set of technically sound, verifiable green metrics across multiple local fund
  • managers in the local ecosystem may help to strengthen the local green and impact investing industry.
  • A demonstrated capacity and track record in financing green SMMEs, the perceived risk in the sector will decrease, and ability to access larger pools of investor capital earmarked for green impact.
GOF disburses funding on a quarterly-basis against reporting requirements and investment targets being met by the CFPs. Once a CFP has submitted their reporting documentation, verification processes are conducted by GOF. After the verification processes are completed, the GOF Advisory Committee signs-off on reporting and verification, and thereby authorizes the disbursement requests. GOF Funding is then disbursed to the CFP from the registered GOF Trust.
GOF has identified six different ways in which a CFP may use the outcome-based payments from GOF towards re-investment in the green SMMEs. These include:
Instrument/Use of Funds Description
Business development support Many green SMMEs, while having excellent sectoral and technical knowledge, require additional training on business development. The CFPs are able to use the outcomes funds to support business development skills with their SMME investees.
Technical assistance, training, and mentoring
In addition to basic business development support, CFPs can use outcomes payments to provide tailored post-investment technical assistance and mentorships to green SMMEs. These services would be provided in order to ensure that business risk is mitigated within the investee green SMMEs thus minimising the probability of default, and increasing the probability of improved business performance.
Investor in-house technical expertise
To accurately assess the risk of a green SMME, a CFP needs to be able to do a thorough due diligence process and fully grasp the viability of the business model. To do so, it requires specific technical expertise. Outcomes funds can be used to support the development of this expertise in-house.
Offer innovative pricing models that reduce interest rates based on additional green outcomes
The anticipation of the green outcomes based payments will enable the fund to explore new innovative ways through which the funds can further incentivise green SMMEs to generate more green impact using deal pricing as an incentive for exceeding green outcomes targets.
Subsidized cost of capital to SMMEs
A CFP may assesses an investment to have the level of risk that requires an X% interest rate, but the SMME can only afford Y% (where Y Example: A CFP considers an SMME to be of the risk that is reflected with a 10% interest rate, but the SMME cannot afford anything above 8%. The GOF outcomes payments could be used to subsidize the 2% difference, essentially derisking the investment for the CFP, and ensuring that the SMME is able to afford finance.
The CFP could increase its pool of capital available to green SMMEs by adding outcomes payments to this pool. Outcomes payments could then be used to invest more in green SMMEs, effectively driving capital towards the green SMME sector.
The use of outcomes-based payments by the CFPs according to the six identified uses can be applied at a discretionary rate by the CFP. A CFP must comply with reporting verification to ensure the use of outcomes-based payment within the defined uses stipulated by GOF.
CFPs are selected based on a clear track record, a demonstrable interest in investing in green SMMEs, and experience with early stage impact deals, as well as evidence of alignment with the GOF mission. CFPs will manage and develop their SMME investment portfolios independently of the GOF, but according to pre-agreed guidelines and impact measurement criteria.
Calls for Expressions of Interest for Catalytic Finance Partners to GOF will be announced during application windows. Please visit our website for more information.