The ZAR488 million (US$26.9 million) Green Outcomes Fund (GOF) has launched in a bid to incentivise South African fund managers to increase investment in green Small, Medium and Micro-sized Enterprises (SMMEs).
The Green Outcomes Fund is the result of a partnership between National Treasury’s Jobs Fund and GreenCape, a non-profit organisation that drives the widespread adoption of economically viable green economy solutions.
Its goal is to provide outcome-based matched funding to local investment funds 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.
The fund has been made possible by catalytic grant support from the RMB Fund, a division of the FirstRand Foundation, while local catalytic finance partners are Mergence Investment Managers, Edge Growth Ventures, Conservation International Ventures and Business Partners South Africa.
These local catalytic finance partners will be incentivised by the Green Outcomes Fund to invest in green businesses, as well as track verifiable green metrics. Investment funds partnering with the fund can choose from a portfolio of green outcomes metrics, developed in line with international impact investing standards, when selecting green SMMEs to invest in.
“We seek to be a catalyst for innovation and investment in activities which directly contribute to sustainable job creation initiatives, as well as long term employment creation in the green economy. This initiative will also provide the Jobs Fund with valuable learnings and appealed to us as public funds will only be triggered by the delivery of independently verified jobs,” said Najwah Allie-Edries, head of the Jobs Fund.
Megan van Vlaanderen, chief financial officer (CFO) of GreenCape, said the Green Outcomes Fund aims to achieve clearly defined green outcomes, encourage greater capital allocation to green businesses by local fund managers, and catalyse increased and higher quality, consistent, reporting of green impacts.