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Backing green SMMEs for a sustainable economic recovery

By GreenCape 19 November 2020

The cleantech sector in South Africa has a diverse range of small, medium and micro-sized enterprises (SMMEs). Globally, SMMEs are engines for job creation and economic growth. Their agile nature allows them to pivot quickly, even during times of acute shock. South Africa has experienced a number of acute shocks and chronic stresses. From energy insecurity and dramatic increases in the price of electricity, to droughts and climate change forecasts predicting an increasingly water-stressed region. These stresses and shocks create the context and opportunity for SMMEs to lead the innovation in developing new technologies and business models. SMMEs are driving the curation and creation of the sorts of solutions that we need to mitigate some of the worst impacts of climate change, and to recover from COVID-19 in a sustainable way.

Despite this crucial role in local development, SMMEs sometimes struggle to take full advantage of local and global opportunities. This is often driven by information asymmetry and competing priorities for short term attention – particularly in competitive and fast-growing sectors. As companies in an early and high-growth stage, SMMEs often need support to be able to access the markets and scale required to create a competitive advantage in one of the fastest-growing sectors in the world. 

Lowering carbon emissions is at the heart of the global climate change narrative, but a green economy will mean so much more for the people of South Africa. A green economy is an economy with decent jobs underpinned by sustainable (efficient, clean and profitable) infrastructure solutions that will create and sustain jobs and well-being for this generation and the generations to come.

GreenCape is a non-profit organisation that drives the widespread adoption of economically viable green economy solutions from South Africa. The team works with businesses, investors, academia and government to unlock the investment and employment potential of green technologies and services, and to support a transition to a resilient green economy. To support green SMMEs towards securing a green economic recovery, GreenCape has been working with various funders during lockdown on: 

  • A green SMME recovery program and policy input (safeguarding jobs and supporting business recovery through mobilising direct international relief funding and collaborating across national government departments on policy recommendations)
  • International trade competitiveness and global market access (supporting investment promotion)
  • Sustainable infrastructure (supporting utility-scale infrastructure resilience)
  • Alternative service delivery (supporting municipal service delivery resilience)
  • Green finance 
  • Green skills development 

A focus on green SMME growth 

Green finance: The Green Outcomes Fund (GOF), a partnership between National Treasury’s The Jobs Fund and GreenCape, is a first of its kind structure that incentivises local South African fund managers to increase investment in green SMMEs. The GOF aims to achieve clearly defined green outcomes, encourage greater capital allocation to green businesses by local fund managers, and catalyse higher quality and consistent reporting of green impacts. The Green Outcomes Fund is the result of a World Bank Climate Technology Program pilot initiated in 2016, with the Bertha Centre for Social Innovation and Entrepreneurship, GreenCape and WWF-SA as the main design partners. The local catalytic finance partners of the Green Outcomes Fund are: Business Partners Ltd., Conservation International Ventures, Edge Growth Ventures and Mergence Investment Managers. Three new green SMME investments have been made over the past few months. 

COVID-19 relief funding and policy input: During lockdown, the EU Delegation in South Africa partnered with the GOF for a three-fold project that has green economic recovery from the Covid-19 crisis as its impetus. The partnership has a particular interest in testing direct support to a green SMME recovery, resulting in a policy input, and includes two stakeholder engagement dialogue events; 

  1. direct financial support to a cohort of green SMMEs through the GOF; 
  2. a policy input document to be presented to National Treasury’s The Jobs Fund.  

Green business support services: GreenCape, in partnership with The Friedrich Naumann Foundation for Freedom (FNF), launched an open-source Green Business Support Services Directory during lockdown. This interactive directory is a public resource with information on services, programmes and opportunities available to entrepreneurs and SMMEs in the green economy. This collaboration seeks to support the growth of the green economy by linking innovators and entrepreneurs to the kind of support these require to promote their green and market-driven products and solutions. 

Global access: As a member of the International Cleantech Network, GreenCape supports the Solar Impulse Foundation’s mission by encouraging cleantech companies in its local ecosystem to submit their solutions to the Solar Impulse Efficient Solution Label. Through this ICN collaboration, the Solar Impulse Foundation and GreenCape share a common goal to support the development and implementation at scale of clean technologies, and encourage decision-makers around the world to adopt ambitious environmental regulations and energy policies. Applications can be done directly via the Solar Impulse Foundation website (Please reference International Cleantech Network) – https://solarimpulse.com/efficient-solutions.

Green innovation pitch challenges: One of the means of specifically promoting sustainability innovation is through green economy business innovation, and providing a testing ground for entrepreneurs to pilot their business venture. To that end, GreenCape, in partnership with the City of Cape Town’s Invest Cape Town | Business Hub, currently invite innovators and entrepreneurs with economically viable green economy innovation business ideas to enter the Invest Cape Town | Business Hub GreenPitch Challenge 2021.

The digital entry form is online on the Invest Cape Town | Business Hub GreenPitch Challenge website. 

Closing date for entries: Friday 27 November 2020 @ 12:00 

Finalists announced: Thursday 10 December 2020

Pitch event: Wednesday 10 February 2021  

These are a few examples of how, in the midst of challenging circumstances, we are seeing greenshoots at grassroots, where green SMMEs are driving a more sustainable future for South Africa: This is the hopeful impact of a focussed effort to keep pursuing the vision of a thriving prosperous Africa mobilised by the green economy.  DM

 

This article is published in partnership with the Friedrich Naumann Foundation for Freedom (FNF).

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