Frequently Asked Questions
The Green Outcomes Fund (GOF) is a first of its kind structure, which incentivises local South African fund managers, the GOF’s Catalytic Finance Partners (CFPs), to increase investment in green small, micro and medium enterprises (SMMEs), by paying for outcomes, such as green job creation, climate mitigation, and improved water and waste management. It creates demand for verified, pre-agreed green outcomes generated by SMMEs and purchased through local fund managers. Simultaneously, it creates a common base for growing the green impact investing market.
The GOF will provide matched concessionary funding (in the form of grant payments) to CFPs in support of investments into green SMMEs that make a demonstrable contribution to the green economy and green job creation. The CFPs will use their own investment capital to invest in green SMMEs. Once SMMEs start achieving pre-agreed green outcomes, the GOF will disburse grants to the CFPs on the basis of green jobs created.
The GreenCape Sector Development Agency is the Jobs Fund Partner to GOF.
GOF’s Design Partners include GreenCape, UCT GSB’s Bertha Centre for Social Innovation, WWF-SA, and The World Bank’s Climate Technology Programme.
The Department of National Treasury’s Jobs Fund is the pilot funder of GOF with catalytic grant support from FirstRand Foundation’s RMB Fund.
The CFP’s include Business Partners Ltd, Conservation International Ventures, Edge Growth Ventures, and Mergence Investment Managers.
The GOF is a fund of funds structure that is set up as a legal trust, administered by Maitland. The GOF’s Advisory Committee (AC) is responsible for policy, strategic vision, and business development of the GOF, both for execution of the pilot and in setting up subsequent phases of the GOF. The GOF’s Investment Committee (IC) is responsible for (re-)allocation and monitoring of funding to CFPs, in line with the GOF mandate and with oversight from the AC. CFPs will manage their individual investment processes
A Catalytic Finance Partner (CFP) is the term allocated to the investment funds that are part of GOF. GOF incentivises fund managers to increase investment in green SMMEs by paying for outcomes, and thereby catalyzes investment into the green economy in collaboration with the CFPs.
The current CFPs to GOF include Business Partners Ltd, Conservation International Ventures, Edge Growth Ventures and Mergence Investment Managers.
The GOF CFPs have bespoke investment mandates which can be found here.
GOF officially launched its implementation phase in January 2020 in partnership between the National Treasury’s Jobs Fund, FirstRand Foundation’s RMB Trust, GreenCape, UCT GSB’s Bertha Centre, and a portfolio of four CFPs.
GOF is currently funded throughout its implementation phase by The Republic of South Africa’s Department of National Treasury’s Jobs Fund and FirstRand Foundation’s RMB Trust. Together, the entities representing both the private and public sector, have committed a total of R92.6million in grant funding matched by R395.5 million in investment capital from local investment funds.
The entities representing both the private and public sector, have committed a total of R92.6million in grant funding matched by R395.5 million in investment capital from local investment funds, totalling an amount of R488.1 million as capital mobilized through GOF for investment into South African green SMMEs.
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.
During the implementation phase, GOF has been applied within the South African green impact investment and green economy industry.
See Revised Schedule 1 of the National Definition of Small Enterprise in South Africa in Government Gazette, 15 March 2019 for the definition of a SMME.
Green SMMEs are defined as businesses that limit or prevent harm to the natural environment relative to conventional alternatives because they:
- Are less polluting and/or use all natural resources in a more sustainable manner and/or
- Recycle more of their wastes and products and/or
- Handle residual wastes in a more acceptable manner and/or
- Refers to the total system which include knowhow, procedures, goods and services, equipment as well as organisational and managerial procedures.
GOF recognizes the following sectors for investment within the green economy:
- Green buildings and the built environment
- Sustainable transport and infrastructure
- Clean energy and energy efficiency
- Resource conservation and management
- Sustainable waste management practices
- Sustainable agriculture, food production and forestry
- Water management
- Sustainable consumption and production
- Environmental sustainability
GOF has a suite of 13 green metrics that are monitored and measured by the green SMME’s that the CFPs invest towards. The list of 13 green metrics are:
- Green Sector Direct Jobs
- Green Sector Indirect Jobs
- Soil Organic Carbon
- Synthetic chemical fertilizer reduction
- Persons reached by reliable clean energy grid/source that were without prior access to the
- transitional energy grid
- Energy generation – total installed capacity
- Energy efficiency – generic energy saved based on deemed savings value per unit installed
- Waste to landfill avoided
- Avoided waste incinerated
- Waste recycled/reused
- Chemical recovery
- Wastewater treated
- Water intensity
GOF has a rigorous system and approach for green outcome measurements as part of the monitoring and evaluation requirements for the project. Green outcomes are authenticated with verified supporting documentation submitted on a quarterly basis by the CFP on behalf of the green SMME that is invested in.
Green outcomes are measured on a regular basis by GreenCape’s team of technical experts representing sectors of the green economy.
A registered green SMME must apply for funding directly with the GOF CFPs. A green SMME must review the investment mandates of the CFPs (click the “Application Details” buttons) and apply directly with the CFP that meets their investment requirements. Each CFP has specified their individual application processes on GOFs website (click the “Application Details” buttons). Applicants can also expect to hear on the outcome of the application with a CFP as specified under their Application Processing and Timeline details.
Business development service providers may advise their green SMME clients to apply for funding from the Catalytic Finance Partners to GOF as a current finance opportunity available for South African registered green SMMEs. Business development service providers may also register their support services and opportunities offered on GreenCape’s Green Business Support Services Directory.
GreenCape has dedicated teams to sectors within the green economy. For green economy support, contact the teams via the following e-mails:
Water: water@green-cape.co.za
Energy: energy@green-cape.co.za
Waste: waste@green-cape.co.za
WISP: wisp@green-cape.co.za
For general business support services, visit the Green Business Support Services Directory.
GreenCape develops Market Intelligence Reports (MIRs) for investors and businesses who are currently active or interested in green economy sectors in the Western Cape and South Africa. Each report provides an overview of the market within a sector, including key developments and achievements, the key players, legislation and regulation, market opportunities and challenges, funding opportunities, and an overview of general green economy investment opportunities. To gain free-access to the MIRs, click here.
The Green Outcomes Fund provides outcomes-based matched concessionary capital to existing and emerging local investment funds to promote investments in green SMMEs in South Africa. GOF does not provide green SMME relief finance due to COVID-19 impacts.
Businesses are encouraged to visit the COVID-19 Content Centre for access to resources and make use of the COVID-19 Support Finder tool to find the business support or disaster relief best suited to your business.
GOF is currently in operation with team members and stakeholders operating remotely. For more information, please visit GreenCape’s communique on Supporting The Business of Green Online from 18 March to end of lockdown 2020.
GOF operates on a National level to create an impact in the South African green economy and the green impact investment industry.
For general enquiries, please e-mail greenoutcomes@green-cape.co.za, or call +27 (0) 21 811 0250 and ask to speak to the Green Outcomes Fund team.