How GOF works
This structure of GOF is based on the following principles:
- The Catlytic Finance Partner (CFP) makes an investment into a green SMME. This investment would not have happened without support from the GOF due to the perceived risks and costs associated with investing in green SMMEs.
- SMMEs achieve positive 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 verifies outcomes and disburses capital quarterly on the basis of demonstrated green outcomes created.
- The CFP uses outcome payments to de-risk investments, provide business development support to green SMMEs, subsidize the cost of capital to SMMEs, or expand its portfolio of 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.