Specialist risk finance group Business Partners has launched a dedicated R300-million fund earmarked for the financing of new or existing small, medium-sized and microenterprises (SMMEs) in the South African renewable-energy space, providing equity and debt finance of between R500 000 and R30-million, it said at the launch, in Johannesburg, on Thursday.
“There is no specific preference in terms of what type of business qualifies, but we want to support viable businesses that actively develop, manufacture and provide goods and services aimed at saving the planet and which seek to or are doing the right things by implementing measures and or technologies that reduce adverse impacts on the environment.
The fund would also consider financing businesses working to conserve natural resources, protect ecosystems and biodiversity and businesses producing healthier food sources.
“Ultimately we want to support those businesses that are making a difference.
“People assume that it needs to be new innovation or a start-up, but that’s not the case; companies already active in the space also qualify,” commented Business Partners executive director Gerrie van Biljon.
Successful entrepreneurs would be further supported by the fund through the provision of access to industry information, a Web-based library, newsletters, peer mentorship and networking, regular workshops, relationships with key role-players, such as universities, dedicated industry mentors and an interest-free technical loan of up to R50 000.
“We’re passionate about funding entrepreneurs or the square pegs in a sea of round holes,” he commented.
Business Partners’ various funds had seen it invest R15.9-billion in various SMMEs, creating 596 388 jobs and enabling 70 506 business transactions.
Highlighting the critical role of entrepreneurs in the economy, Van Biljon said SMMEs accounted for over 35% of South Africa’s gross domestic product, bringing innovative new technologies, products and services to the market, creating jobs and contributing taxes for development.
Elaborating on Business Partners’ decision to launch the fund, he noted that domestic providers of capital to the green economy traditionally favoured larger businesses with access to finance and resources.
However, there was ample opportunity for growth of SMMEs in the industry, as a higher level of local content was required in South African renewable-energy projects.
“Companies that can access this fund include plastic recyclers, energy-savings businesses, companies that provide alternative, clean and environment-friendly energy sources, firms that sell ‘save-the-planet’ business sources, as well as those that provide services or components for green building,” he noted.
While acknowledging that the current economic climate continued to paint a gloomy picture for business, Business Partners believed SMMEs were primed to capitalise on gaps in the market.
Business Partners executive director Christo Botes said last month that larger corporations’ tighter internal structures hindered their ability to adapt timeously to the changes in the market, thereby creating gaps for smaller businesses to fill.
“Smaller businesses are agile and have the ability to quickly overcome various obstacles to establish and attain longevity. Compared with bigger corporations, smaller businesses are easily adaptable to movements in the market due to their size,” he commented.