Pioneering a Climate Finance Instrument in Africa: Lessons from Two Years of the Green Outcomes Fund

The Green Outcomes Fund (GOF) is a pioneering climate finance instrument launched in January 2020 to incentivise investment in South Africa's green small, medium, and micro-enterprises (SMMEs). By using an outcomes-based payment model, the GOF provides grant funding to Catalytic Finance Partners (CFPs) who deploy private capital into green SMMEs, with reimbursements triggered by the creation of verified green outcomes, primarily permanent direct jobs.

• The Green Outcomes Fund (GOF) operates as a first-of-its-kind climate finance structure that blends concessionary grant funding with private capital to support green SMMEs in South Africa. It uses an outcomes-based payment model where Catalytic Finance Partners (CFPs) invest their own capital upfront and are reimbursed by the GOF after verified green outcomes are achieved.
• The GOF pilot facility totals ZAR 488.1 million, consisting of ZAR 92.6 million in grant funding from the National Treasury’s Jobs Fund and RMB’s FirstRand Foundation, matched by ZAR 395.5 million in committed private sector investment from local fund managers.
• As of September 30, 2021, the GOF's impact includes 7 investments in urban and rural green businesses, the creation of 43 permanent direct and 67 indirect jobs, the diversion of 6,746.101 tonnes of waste, and energy savings of 7,826 kWh/day.
• The GOF has successfully incentivised CFPs to invest in high-risk green SMMEs they would have otherwise avoided. CFPs have used outcomes payments to subsidise the cost of capital, provide business development support, and fund in-house technical expertise to conduct green due diligence.
• A significant challenge identified is the lack of a coordinated pipeline of viable green SMMEs. While 108 SMMEs applied for funding by June 2021, most were unsuitable, and some CFPs struggled to source enough deals, highlighting a need for a more streamlined screening process.
• Job creation has lagged behind investment expectations, with a higher proportion of low-skilled and semi-skilled jobs created than initially projected. This has resulted in a slower-than-expected drawdown of outcomes funding, as high-skilled jobs trigger larger payments.
• Green SMMEs frequently lack essential business skills in financial management, marketing, and communications, making non-financial business development support from CFPs critical for their growth and sustainability.
• The GOF is exploring scaling strategies for its next iteration, including expanding the model within South Africa and scaling regionally into Africa. The regional expansion feasibility study focuses on a first tier of Rwanda, Ethiopia, and Uganda, and a second tier of Cote d’ivoire, Senegal, Ghana, and Nigeria.

APA

GreenCape (n.d.). Pioneering a Climate Finance Instrument in Africa: Lessons from Two Years of the Green Outcomes Fund. https://greencape.co.za/assets/5220_GOF_KnowledgePDF_Final.pdf

Chicago

GreenCape. Pioneering a Climate Finance Instrument in Africa: Lessons from Two Years of the Green Outcomes Fund. n.d. https://greencape.co.za/assets/5220_GOF_KnowledgePDF_Final.pdf.

Wikipedia

{{cite report |author=GreenCape |title=Pioneering a Climate Finance Instrument in Africa: Lessons from Two Years of the Green Outcomes Fund |url=https://greencape.co.za/assets/5220_GOF_KnowledgePDF_Final.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{greencapendpioneering, author = {{GreenCape}}, title = {{Pioneering a Climate Finance Instrument in Africa: Lessons from Two Years of the Green Outcomes Fund}}, institution = {GreenCape}, url = {https://greencape.co.za/assets/5220_GOF_KnowledgePDF_Final.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }