This document discusses funding challenges for small and medium enterprises (SMEs) in the cleantech sector in South Africa. It notes that SMEs have a unique relationship with money that requires an investor mindset. It also observes that funders lack in-house technical knowledge, perceive technological risks highly, and there are funding gaps for demonstration projects and small-scale project finance. Going forward, it suggests innovative solutions like a Green Investment Bank could help address these challenges by providing funding for cleantech SMEs.

1. Show Me the Money: Funding for SA
cleantech
Aman Baboolal (Analyst, GreenCape)
September 2017
NCPC

2. NCPC
September 2017 | Cape Town
GreenCape
Who are Green SMEs
Observations: SMEs
Observations: Funders
Going forward

3. NCPC
September 2017 | Cape Town
GreenCape
Who are Green SMEs
Observations: SMEs
Observations: Funders
Going forward

4. A focus on manufacturing allows the green economy needs to
become a permanent fixture in the national economy
OVERVIEW
| 4
Mandate
“To support the accelerated development of the
Western Cape green economy”
Vision
“The Western Cape is the green economy hub for Sub-Saharan Africa –
the regional headquarters and manufacturing centre for leading
companies in this space”
▪ Economic growth
- Increased investment
- Job creation
▪ Lower carbon
▪ More resource efficient
▪ Increase local production

5. The range of work crosses a wide variety of outputs
| 5
OVERVIEW
PASSIVE / INTERNAL ACTIVE / CLIENT-FACING
Research:
• Field data through key
relationships, site visits
and networking
• Market Intelligence
Reports
• Knowledge pieces
• Industry updates
Tools:
• Green-Agri Portal
• Decision-making tools
e.g. waste, non-revenue
water
• Regulatory and
legislative advice e.g.
tariff work
• Green Finance
Database
Stakeholder engagement:
• Networking events
• Thought leadership presentations
• Setting up cross-sectoral and triple
helix meetings
• Support for industry gatherings
Front-line activity:
• Proposed Special Economic
Zone for Greentech
manufacturing
• Western Cape Industrial
Symbiosis Programme (WISP)
• Market Connect and Finance
Lab

6. Headline results indicate that GreenCape has made significant
socio-economic strides in setting up a cleantech foundation in SA
OVERVIEW
| 6
• ZAR 17bn investment in the Western Cape since 2011
• > 10,000 local jobs created
• > 1,000 members
• 1st African Cleantech cluster invited to join the world
leading regions – International Cleantech Network (ICN)

7. Green Finance Databases
GREEN FINANCE
| 7
 GreenCape’s Green Finance Database
‒ The Green Finance Desk has compiled and continues to maintain a database of funding
sources and incentives that could be relevant to companies operating in the green space.
‒ The database contains information on funding opportunities, the types of funding and
institutions providing the funding and contact details. It is ideal for any entity seeking a
broad range of funding solutions and financial incentives, with a largely South African
focus.
 Other databases
‒ Finfind (includes learning and business advisory aspects; local emphasis)
‒ Allied Crowds (includes an entrepreneur hub with tools; global
‒ RECP (focus on energy-related project development in Africa)
 Funding directories (PDFs)

8. NCPC
September 2017 | Cape Town
GreenCape
Who are Green SMEs
Observations: SMEs
Observations: Funders
Going forward

9. Who are Green SMEs
OBSERVATIONS
| 9

10. NCPC
September 2017 | Cape Town
GreenCape
Who are Green SMEs
Observations: SMEs
Observations: Funders
Going forward

11. SMEs
OBSERVATIONS
| 11
• Unique relationship with money
- Requires: Investor mindset
- Distinguish: Business vs Product
- Avoid: Outsourcing “money stuff”

12. NCPC
September 2017 | Cape Town
GreenCape
Who are Green SMEs
Observations: SMEs
Observations: Funders
Going forward

13. Funders
OBSERVATIONS
| 13
• Lack of inhouse-technical knowledge
• Perception of technological risk
• Basel III
• VC models
• Funding gaps
- Demo
- Project finance (small scale)

14. NCPC
September 2017 | Cape Town
GreenCape
Who are Green SMEs
Observations: SMEs
Observations: Funders
Going forward

15. Going forward
GOING FORWARD
| 15
• Innovative solutions
- Green Investment Bank (e.g., PACE)
- Green Outcomes Fund
- Learning from groups like Breakthrough
Energy Ventures
- Institutional investors?
- Matchmaking

16. Thank You
Aman Baboolal aman@greencape.co.za
www.greencape.co.za

17. How are we set up?
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Programmes
Sector Desk & Market Reports
Projects
Ring-fenced
project
OVERVIEW
Energy Resources Waste WISP
(Western Cape
Industrial Symbiosis
Programme)
Atlantis SEZ office
Renewable
Energy (Utility)
Energy Efficiency
Agriculture
Water
Waste
Smart Electricity
Smart Water
Allocation
Bioenergy and
resource
productivity
Cross-cutting
Green Finance
Skills
Technical and knowledge support
Business matchmaking
Uptake for
Alternative Waste
Treatment –
Municipal
Value Chain
Assessment
Builder Rubble in
roads uptake