Background

In January 2020, the Bertha Centre launched the Green Outcomes Fund (GOF) in collaboration with GreenCape and the World Wide Fund for Nature South Africa (WWF-SA). The GOF is a brainchild of the Bertha Centre and seeded through a design-thinking process with GreenCape, WWF-SA, and the World Bank Group.

The GOF, implemented in partnership with the Jobs Fund, is a first of its kind structure which incentivises South African fund managers to increase investment in green Small, Medium and Micro-sized Enterprises (SMMEs) by paying for green outcomes that are generated. These outcomes include green job creation, climate mitigation, and improved water and waste management.

Local fund managers who might have overlooked green SMMEs in the past are now incentivised to invest in small green businesses because they receive payments for their portfolio of green outcomes generated. This is beneficial to green SMMEs, who are now able to access funding and non-financial support. Fund managers gain through outcomes payments, which are used to assist their investment process in green SMMEs. Part of the GOF’s aim is to create a common base for growing the South African green impact investing market. This has been made possible by catalytic grant support from the RMB Fund, a division of the FirstRand Foundation.

The current phase of GOF is a three-year pilot and GOF is now looking to scale to its next iteration based on lessons learnt to date and the current funding context. Public and concessional capital will remain a key priority to catalyse broader private sector finance into the South African green SMME economy optimally.

GOF process:

Impact:

The GOF is aligned with the UN’s Sustainable Development Goals (SDGs) and mobilises private capital in support of these global goals. The overarching impact is:

1. The creation of green outcomes that combat climate change
2. Increased effectiveness and efficiency of concessional funding in achieving green outcomes
3. Growth of South Africa’s green investment sector
4. Growth of South Africa’s green economy

GOF stakeholders:

Funders: National Treasury Jobs Fund, supported by the FirstRand Foundation

The local SMME fund managers of the Green Outcomes Fund are: Mergence Investment Managers, Edge Growth Ventures, and Conservation International Ventures Fund.\ \ Catalytic finance partner: IDF Capital

Design team: Bertha Centre, World Bank Group, World Wide Fund for Nature South Africa (WWF-SA), and GreenCape

Opportunities to get involved:

If you are interested in applying to become a catalytic finance partner, registering as part of GOF’s green SMME database or partnering as a grant funder please visit the GOF website.