This structure is based on the following principles:
- CFPs invest match funding into green SMMEs. They will invest in SMMEs according to the fund’s own particular delivery model and disbursement policy.
- 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.
- The GOF verifies outcomes and disburses capital quarterly on the basis of demonstrated green outcomes created.
- 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.