A R300-million Green Fund focusing on financing and supporting sustainable businesses and projects was recently launched by Risk financier Business Partners Limited (BPL). Criteria for the projects is that entrants need to positively impact on the environment and, simultaneously create wealth and jobs.

In line with BPL’s philosophy of addressing both socio-economic and environmental challenges in South Africa by doing good, the Fund aims to finance and support profit-seeking businesses that operate in the green industry. “We recognise the huge market potential of the green economy – opening new and growing opportunities for both large businesses and small and medium enterprises (SMEs) alike,” says Nazeem Martin, MD of BPL, who was speaking at the launch event in Cape Town.

Green job creation

“The BPL Green Fund seeks to develop, grow and invest in sustainable businesses, enabling them to capitalise on opportunities in the green economy – especially in the clean and green technology, renewable energy, recycling sectors – and deliver on its inherent job and wealth creation potential,” Martin adds.

The UNEP Green Economy Report demonstrates that the greening of economies can create a new engine of growth and job creation in the country. Martin says that in South Africa, Government has committed to unleashing the potential of the green economy, and points to the New Growth Path which has identified the green economy as one of the six priority sectors to assist in reaching its target of five million new jobs by 2020.

Greenhouse gas reduction

“South Africa is one of the world’s most carbon-intensive economies, reported to account for nearly half of Africa’s carbon emissions, and the 12^th largest carbon emitter globally. Given its rich alternative energy sources, the country has the potential to reduce its unsustainable levels of carbon emissions through increasing the renewable (solar, wind and, to a lesser extent, hydro) component of its energy supply mix. And, the knock-on effect for economic growth and job creation from investing in these new alternative energy sectors will be substantial,” says Martin.

The South African Government is seeking to achieve a 34% reduction in domestic greenhouse gas emissions by 2020 and 42% by 2025, and the New Growth Path Framework aims to create 300 000 additional direct jobs by 2020 in an effort to green the economy.

“Such initiatives and policy frameworks require huge capital investments, creating space and opportunities for large businesses. But, simultaneously, opportunities arise for SMEs within the component manufacturing and service industry sectors as higher levels of local content is specified and required within government’s policy framework. Finally, a great deal of innovation is required from private sector financiers to seize the market opportunity created by government’s green economy plans and policy frameworks,” Martin adds.

He points to the current levels of foreign investor interest in the green economy. According to the SADC Renewable Energy and Energy Efficiency Status Report, Africa attracted USD8-billion in renewable energy investment in 2014 (up from USD5.3-billion in 2013), with South Africa accounting for USD5.5-billion.

Start up funding

The BPL Green Fund will provide expansion capital, as well as start-up funding and property finance from R500 000 and up to R30-million. Martin explains that the type of businesses it will finance is diverse. “We are seeking to finance businesses which actively develop, manufacture and provide goods and services aimed at saving the planet, as well as those businesses that are doing the right thing by implementing measures or technology which reduce their adverse impact on the environment.”

The Fund will have a dedicated team to support with the application process and entrepreneurs will have access to dedicated industry specific specialists. A R50 000 interest free loan is also available to qualifying entrepreneur for technical assistance.

“Making up 91% of formalised businesses in South Africa and contributing for more than 60% of new jobs created, SMEs are a vital contributor to the country’s GDP and employment. We believe by equipping SME entrepreneurs to thrive in the ‘green economy’, we can enhance their contribution to the economy and the environment,” concludes Martin.