Overcoming Financial and Capacity Barriers to Empower Small‑Scale Enterprises in South Africa

Annex E. Financial and technical support programmes for small-scale enterprises

Initiatives focusing on ecosystem support for green small-scale enterprises

Several initiatives support South Africa’s ecosystem for micro-small and medium-sized enterprises (MSMEs) through stakeholder mapping, diagnostic work, training and capacity-building activities.

EU SME Ecosystem Support Project (2017–24)

The EU‑funded SME Ecosystem Support Project, implemented in partnership with the Department of Small Business Development (DSBD), aimed to strengthen South Africa’s MSME ecosystem through improved co-ordination, institutional capacity building and evidence‑based policy support. With total funding of EUR 56.4 million, the programme contributed to ecosystem mapping, diagnostics and improved visibility of MSME support actors. The programme provided broad-based support for improving the enabling environment of small businesses.

Just SA Consortium and its SME Loop (2023-28)

The “Just Transition to a Decarbonised Economy for South Africa” (Just SA) is a multi-partner initiative, launched in 2023 and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in partnership with South Africa’s Department of Forestry, Fisheries and the Environment, alongside TIPS, NBI, WWF South Africa and other partners. Funded by the German Federal Ministry for Economic Affairs with a budget of EUR 15 million, the five-year programme supports South Africa with a strong focus on inclusive, locally grounded economic development in coal-dependent Mpumalanga. The programme aims to drive economic diversification by shifting from coal-based activities towards greener value chains, with a central focus on strengthening micro, small and medium-sized enterprises (MSMEs). It operates through complementary components that combine skills development, local economic development, social dialogue and enterprise support. The SMME Facility provides technical assistance, project preparation and matchmaking services to help MSMEs become investment-ready and access JETP financing and new markets. In parallel, the SMME Loop offers a 6–9 month combined training, mentoring and coaching programme to build business and financial management capacities and support MSME integration into emerging value chains. The initiative also includes collaboration with Indalo Inclusive to deliver blended support packages combining training and seed funding, including grants of up to ZAR 50 000. The first cohort of SMEs under the SMME Loop began training in February 2026.

Boston Consulting Group (BCG) SME Growth Hub (starting in 2026)

The Mpumalanga MSME Growth Hub, supported by the Boston Consulting Group (BCG), is led under the UK’s Foreign, Commonwealth & Development Office (FCDO) Growth Gateway programme, with a pilot phase planned for the second quarter of 2026. Designed in partnership with the Mpumalanga Green Cluster Agency (MGCA) and other local stakeholders, the Hub aims to strengthen the province’s MSME ecosystem and unlock investment into small enterprises through a locally anchored, scalable platform.

Building on BCG’s prior experience in SME acceleration, incubation and pipeline development, preparatory work has included extensive ecosystem mapping to identify enterprises, intermediaries, financiers and support organisations operating in Mpumalanga. The Hub seeks to address key structural barriers, including weak investment readiness, fragmented support services and inefficient due diligence processes, which currently limit MSMEs’ ability to access finance.

To respond to these challenges, the Growth Hub will deliver co-ordinated support across four core functions: (i) investment-readiness assistance to prepare MSMEs for financing, (ii) structured engagement with investors to facilitate deal flow, (iii) localised, on-the-ground delivery to ensure accessibility and relevance, and (iv) a shared data platform to identify, track and match MSMEs with financing and business opportunities. By aligning government, development finance institutions, corporates and technical partners, the Hub aims to improve pipeline quality, reduce transaction costs and increase the flow of private capital into Mpumalanga’s emerging new economic activities. A key objective is the gradual transfer of management to locally led institutions, strengthening provincial ownership and long-term viability.

Climate Finance Accelerator

The Climate Finance Accelerator (CFA) is a JETP‑grant funded technical assistance programme, launched in 2021 with a budget of approximately USD 1.3 million, that supports innovative green ventures and project developers in accessing commercial‑scale project finance and growth‑stage investment capital. It forms part of a broader UK government initiative implemented across multiple emerging economies, including South Africa. The CFA provides tailored capacity building support over 4-6 months to enable the preparation of investment ready propositions mainly in the renewable energy sector. Support spans financial training to strengthen project financing, support for regulatory compliance, and assistance in preparing investment-ready and bankable project documentation. It further facilitates networking opportunities through multi-day events to connect ventures and developers with potential investors. The CFA aims to address a fundamental bottleneck between available investment opportunities and an underdeveloped pipeline of funding-ready projects and to advance policy dialogue to reduce policy and regulatory barriers and create an enabling environment for project developers. The accelerator focuses on businesses that are revenue generating or projects that are at post-feasibility stage with proven technologies with a minimum funding amount of USD 3 million. Over its past three iterations, the CFA has supported 43 projects through technical and financial capacity-building interventions and has unlocked over USD 100 million in investments. The project is implemented by GreenCape, the National Business Initiative (NBI) and PricewaterhouseCoopers (PwC).

Distilling the “Just Energy Transition” in South Africa

Harmonising Conflict and Seeking Opportunities is a JET project which supports a locally grounded approach by providing capacity building and technical assistance in two coal-dependent municipalities in Mpumalanga. It assists local stakeholders in identifying and developing economic diversification pathways, working with enterprises and community actors to promote job creation and alternative livelihoods as coal-related activities decline. Support includes stakeholder engagement, economic analysis and project pipeline development to translate transition planning into implementable opportunities. The project received ZAR 5.5 million in grant funding from the UK and is led by Trade & Industrial Policy Strategies (TIPS) in collaboration with local partners. It was completed in 2022.

Early-stage pipeline scoping in Mpumalanga for JETP SME investment

A UK-funded JET initiative providing ZAR 18 million to support early-stage pipeline development and provide technical assistance to MSMEs and potential investors to help such MSMEs access investment opportunities. The project was implemented by the BCG and was completed in 2024.

Green Tourism Incentive Programme

Green Tourism Incentive Programme (GTIP) is a grant programme launched by the Department of Tourism in 2017 and implemented by the IDC. It supports MSMEs active in the tourism sector to reduce their energy and water consumption. The programme covers the full cost of resource efficiency audits, to help businesses identify the most efficient areas for sustainability improvements. Following the audit, MSMEs can access grants covering 50% to 90% of the costs of implementing energy and water efficiency solutions, up to a maximum of ZAR 1 million. Grants are disbursed directly to service providers or installers selected by the MSME. The programme closed in 2025.

Mapping Mitigation and Adaptation Pathways for a JET – Support for Sector Job Resilience Planning

It is a UK-grant funded technical assistance and capacity-building initiative of ZAR 7.6 million. It pilots and develops business cases in identified vulnerable sectors, helping local stakeholders to pilot such businesses cases, assisting with planning and attract investment and implementation support for such projects. It was implemented by the Council for Scientific and Industrial Research (CSIR) and was completed in 2023.

Concessional funding programmes

The Africa CleanTech Impact Fund (ACTIF)

The Africa CleanTech Impact Fund (ACTIF) provides patient debt funding alongside technical and capacity building support to early stage cleantech MSMEs. The fund targets deal sizes from ZAR 1.5 million to ZAR 8 million and is designed to help enterprises progress from proof of concept to scale-up. It also provides technical assistance to build up the investment readiness of funded MSMEs and connects them to relevant funders. The ACTIF supports clean tech MSMEs involved in renewable energy, energy efficiency, as well as water efficiency and green transport, amongst others. The ZAR 150 million structured fund was established in 2025 and blends concessional and commercial funding. It is jointly managed by the United Nations Industrial Development Organization, the Technology Innovation Agency, and Impact Amplifier, who is responsible for supporting pipeline development.

IDC AFD Green Energy Fund

The Green Energy Fund provides debt finance through its ZAR 1 billion funding facility to small scale renewable energy and energy efficiency projects, as well as manufacturing enterprises producing green products across South Africa. Loans are offered on concessional terms through reduced interest rates and repayment periods of up to eight years which can be structured around generated energy savings. The facility blends concessional funding from the Agence Française de Développement (AFD) alongside IDC funding. The fund has benefitted from a ZAR 400 million credit line from the French Development Agency (AFD) to the IDC.

IDC Green Energy Efficiency Fund (GEEF)

The IDC Green Energy Efficiency Fund (GEEF) is a ZAR 500 million facility established in 2011 in partnership with the German development bank KfW. It provides concessional financing, including loans ranging from ZAR 1 million to ZAR 50 million, with reduced interest rates and repayment periods of up to 15 years. The fund is targeted at firms across South Africa, with priority given to MSMEs who would like to invest in energy efficiency technologies.

National Empowerment Fund (NEF) Alternative Energy

The National Empowerment Fund (NEF) Alternative Energy Fund was established in 2022 with a ZAR 100 million allocation from the Department of Trade, Industry and Competition (DTIC). The fund provides concessional loan financing to majority black-owned MSMEs to support the installation of renewable energy technologies. Financing ranges from ZAR 200 000 to ZAR 5 million, offered at a concessionary interest rate of 2%, with repayment terms of up to seven years, including a 12-month grace period.

Guarantee programmes

SEDFA Innovation Fund

SEDFA’s Innovation Fund includes a dedicated green growth window which supports financial intermediaries with an established MSME pipeline. Through the provision of credit guarantees SEDFA enables financial intermediaries to de-risk lending and offer concessional loans in the form of reduced interest rates to MSMEs who are operating in green industries.

Blended finance funds

The Green Fund

The Green Fund is a ZAR 1.2 billion fund established in 2012 which provides catalytic funding for innovative MSMEs and project developers amongst other actors. It aims to address early-stage financing gaps which green ventures face, with the aim of de-risking projects and crowding in private capital. The fund offers a variety of instruments tailored to the needs and maturity stage of the enterprise, as well as the project type. Early-stage support includes grants deployed as research and development (R&D) and project preparation grants to finance feasibility studies, planning, technical assistance, and business support for product development. Project and capital development grants can also be provided to offset costs and absorb some of the initial risk, in turn attracting private financiers. Grants can be provided in the form of recoverable or non‑recoverable grants. For projects at implementation or launch stage, grants can further be complemented by equity investments, concessional loans and additional technical assistance to support project implementation. During scale up phase, green ventures can further be supported through the provision of guarantees for de-risking. As such, the Green Fund strategically deploys different types of capital depending on the growth stage of the MSME, combining de-risking and growth capital to attract additional capital from private sources. Projects can be financially supported for up to 15 years. The Green Fund was established by the DFFE in 2012 with the DBSA handling implementation and management of the fund. Applicants must demonstrate a comprehensive business plan, audited financial statements and at least three years of financial projections. Some of the initial challenges which have been observed include complex application and due diligence requirements, as well as long timeframes for project approvals and funding disbursement, which can pose barriers for some applicants, especially smaller-scale firms who are at an early stage of development with more limited capacity and resources.

IFC–Business Partners Green Building Programme

The IFC–Business Partners Green Building Programme was launched in 2022 to expand financing for green industrial, retail, and commercial buildings for MSMEs in South Africa. The IFC provides a ZAR 600 million loan to Business Partners for on-lending to eligible MSMEs investing in green property development and retrofits, including measures such as solar installations and energy-efficient lighting. Projects financed under the programme must demonstrate at least a 20% improvement in energy efficiency and obtain a recognised green building certification. The facility also includes financial incentives to offset certification costs, with performance-based rewards linked to the achievement of green building targets across Business Partners’ portfolio. In addition, the IFC provides technical assistance and advisory support to strengthen Business Partners’ capacity to develop green finance products and assess green building investments

The Green Outcomes Fund

The Green Outcomes Fund (GOF) is a blended finance programme that combines concessionary funding with private capital to mobilise investment into MSMEs (Box 3.3). The National Treasury’s Jobs Fund and the FirstRand Foundation have provided initial grant funding of ZAR 92.6 million, which has leveraged a further ZAR 395.5 million in investment capital from local funds. The Green Outcomes Fund (GOF), launched as a three‑year pilot in 2020 and entering its second phase in 2026, seeks to address a persistent financing gap affecting environmentally friendly MSMEs. This gap reflects several structural constraints, including limited experience among fund managers in financing small‑scale green enterprises, high transaction costs associated with small deal sizes, and low levels of investment readiness among MSMEs. By offering outcomes‑based grant funding to local fund managers investing in MSMEs, the GOF creates strong incentives to catalyse investment into an underserved segment of the market.

Business incubator and accelerator programmes

Green Acceleration Programme (GAP)

GAP is an accelerator programme which is designed to support green, women-led entrepreneurs to access capital through enhanced investment readiness and compliance. The programme provides mentoring and coaching to a cohort of 30 entrepreneurs for developing key practical skills such as financial management, compliance and business model refinement. Eligible enterprises must have been operational for at least six months, demonstrate a validated proof of concept, and show initial revenue generation. As such, GAP supports ventures who are in the middle-stage of development, between start-up and scale-up phases. The programme was launched in 2024 by WomHub with support from GIZ.

Global Cleantech Innovation Programme (GCIP)

The GCIP combines an accelerator and annual innovation competition for innovative MSMEs and startups. The national competition selects high-impact businesses to participate in an accelerator programme to receive customised training and mentoring on strengthening business models, improving financial management skills and pitching skills for de-risking and improving investment readiness to access funding. Participants also get access to a network of investors to connect with. Acceleration support services have reached entrepreneurs in all nine South African provinces, supporting over 100 cleantech ventures so far. Winners of the annual competition receive a cash prize grant or investment and additional business support. The programme has been led by the Technology Innovation Agency (TIA) since 2018 and is implemented alongside the United Nations Industrial Development Organization (UNIDO) and local accelerators.

Impact Finance Network (IFN)

The IFN from Anglo American aims to address a critical barrier preventing private capital from reaching high-impact MSMEs. It provides MSMEs with pre-investment technical assistance, investor matchmaking and access to catalytic capital to unlock access to private capital. It identifies high-impact MSMEs which are seeking funding and provides them with tailored support covering activities such as pitching and meeting investor due diligence requirements. IFN also helps to match startups to suitable impact investors providing additional support until deal closure. So far, the IFN has provided 90 companies with technical assistance and unlocked USD 90 million of private capital. Together with funding support from FCDO, IFN has launched the Impact Finance Facility, to provide early and growth stage MSMEs with flexible, patient capital, such as concessionary loans, to absorb initial risks and attract growth capital from private investors. The initial pilot of the facility managed to leverage R5.35 million of catalytic capital to unlock ZAR 52.6 million of private capital.

The Innovation Hub Climate Innovation Centre South Africa

The Climate Innovation Centre South Africa, part of The Innovation Hub Management Company (Gauteng’s innovation agency), is a green incubator supporting clean-tech entrepreneurs. It provides business development and capacity-building services to help startups become investment ready, including workshops, sector-specific training, and commercialisation support. The programme also offers access to co-working facilities and connects entrepreneurs to investors and industry partners.

The Circular Economy Accelerator (CEA)

CEA is an accelerator programme which supports MSMEs in the domain of sustainability and circular economy over an 18-month period. It provides participants with technical assistance on key areas such as business model refinement and financial management, as well as facilitating market access, financing access and offering peer learning opportunities. The programme is run in partnership with J.P. Morgan, the Embassy of Finland and Nedbank.

Savant Business Support

Savant supports early-stage technology MSMEs which offer incubation and acceleration support and direct funding support. Through its Build Programme, Savant is helping to build up the investment readiness of start-ups over a 6-month period, providing them with tailored mentoring, masterclasses and relevant advisory services to improve their business growth strategy, meet investor requirements, enhance market access, pitch their ideas and secure intellectual property rights. The programme also provides MSMEs with access to investors to establish connections and gain access to funding. It targets start-ups with who are at proof-of-concept stage, with participating enterprises having the opportunity to gain access to follow on funding through Savant’s Venture Fund to further support scale up. The Venture Fund was launched in 2019 and provides enterprises with patient capital tailored to their maturity stage, covering pre-seed, seed and Series A funding. Savant is also a co-designer of Aséli Impact Capital, launched in 2025 as a pilot initiative in partnership with the Anglo-American Foundation and Krutham. Aséli is a blended finance facility focused on scaling South African MSMEs, with initial seed funding of USD 4 million and an ambition to scale to USD 25 million. It seeks to address the “missing middle” financing gap facing MSMEs through the provision of patient, revenue-based financing structures.

South African Renewable Energy Business Incubation (SAREBI)

The South African Renewable Energy Business Incubation (SAREBI) is a Western Cape-based incubator that supports early-stage renewable energy MSMEs to become commercially viable. It offers tailored incubation modules, training, mentorship, and workshops in business, financial management, marketing, and growth strategy development. Through its Manufacturing Technology Centre, it also provides access to shared industrial facilities, tools, software, and prototype testing resources, while connecting entrepreneurs to a broad network of investors and industry partners.

The Greenhouse

The Greenhouse is a 12-month accelerator programme from Nedbank in collaboration with FURTHER designed to support early-stage green ventures which are ready to scale. The programme targets entrepreneurs which have demonstrated a clear proof of concept and have developed an innovative green business model. Entrepreneurs are supported through a combination of catalytic grant funding, tailored coaching, mentoring and capacity-building support, to help bridge the gap between start up to scale up. Participants further benefit from access to networks for peer learning, as well as strategic guidance on developing a sound business strategy for scaling, covering key topics such as financial management, marketing and governance.

The Groundswell Business Accelerator Programme

The Groundswell Business Accelerator Programme is an 18-month accelerator from Fetola which provides MSMEs with hands-on business development support. Participants receive mentorship, advisory services and access to practical tools on key areas such as strategic planning, market access, business scaling and skills development on sales and marketing. The programme also offers peer learning and collaboration opportunities through providing participants with access to its network. Additionally, finance access is enhanced through the provision of investment readiness support. Priority is given to black-owned, youth and female-owned businesses.

Partnering for Green Growth and Global Goals (P4G)

P4G supports early-stage start-ups in emerging markets and developing economies to become investment-ready, while facilitating partnerships with national public–private platforms to help them navigate markets. This approach strengthens market systems and accelerates just, resilient economic transitions. P4G members are committed to advancing solutions aligned with the Sustainable Development Goals, with a focus on poverty reduction and gender equity in agriculture, renewable energy and water resilience. Hosted by the World Resources Institute, P4G was fully funded by Denmark in Phase 1. Phase 2 is supported by Denmark, the Netherlands and the Republic of Korea, and operates in Colombia, Ethiopia, Indonesia, Kenya, South Africa and Vietnam. Since joining in May 2019, South Africa has supported 21 green small enterprises across renewable energy, zero-emissions mobility, circular economy, water resilience and agriculture. These businesses receive support on research, technical expertise, scaling, commercialisation, operations, capacity development and outreach. The programme is co-chaired by DFFE and NBI through the national platform governance structure and is currently in Phase 2, running until December 2027

Climate Finance Accelerator (CFA)

Across three iterations in South Africa, the Climate Finance Accelerator has supported 43 projects through targeted technical and financial capacity building to improve investment readiness. Structured engagement with local and international investors has resulted in investment decisions exceeding USD 100 million. The programme focuses on unlocking finance for early- and growth-stage projects across sectors such as renewable energy, resilient infrastructure and circular economy solutions. It is implemented by the National Business Initiative and GreenCape as in-country partners, with support from PricewaterhouseCoopers.

Switch Africa Green

SWITCH Africa Green is an European Union funded programme, launched in 2013, that supported African countries by promoting responsible consumption and production practices. Implemented by the United Nations Environment Programme (UNEP) in collaboration with the United Nations Development Programme (UNDP) and the United Nations Office for Project Services (UNOPS), it operates in seven countries (Burkina Faso, Ethiopia, Ghana, Kenya, Mauritius, South Africa and Uganda), focusing on sectors with high potential for green growth including agriculture, manufacturing, integrated waste management and tourism. The programme promoted resource efficiency, eco-innovation, sustainable trade, and the use of standards and labelling, while supporting micro, small and medium enterprises and enabling policies through capacity building, market development and stakeholder engagement. By combining policy support, private sector mobilisation and knowledge sharing, it aims to enhance competitiveness, create green jobs, reduce environmental impacts and contribute to Sustainable Development Goal 12. The programme concluded in December 2023.

Alternative financing models for renewable energy small-scale enterprises

Examples of fintech-enabled and alternative financing models for small-scale enterprises in the renewable energy sector

• Yoco offers payment and point‑of‑sale (POS) technology for small businesses, alongside innovative finance structures. Rather than a traditional loan with fixed repayment terms, Yoco Capital gives businesses a lump‑sum advance that they repay automatically by withholding a small percentage of daily sales processed through Yoco’s payment system. This flexible, sales‑linked financing mechanism can help MSMEs fund growth or necessary purchases, including equipment or upgrades related to solar or clean‑energy deployment, without conventional credit checks or fixed repayment schedules.

• Lula offers fast and digital access to business funding, through an online credit assessment which uses real‑time business performance data for credit assessments. It offers relatively quick access to unsecured business loans of up to ZAR 5 million or revolving capital facilities, allowing MSMEs to draw upon as needed. These products enable renewable energy MSMEs to fund equipment purchases, cover operational costs, or bridge cash-flow gaps.

Examples of financing models enabled through energy sector intermediaries for renewable energy adoption

Pay-as-you-go models

• PayGo Energy uses the pay‑as‑you‑go (PAYGO) solar financing mode, where customers make small, frequent payments via mobile platforms to access energy systems. It is attractive for MSME users because it eliminates upfront costs, allows for flexible and incremental payments and can help build a credit history through repayment behaviour. PayGo effectively acts as embedded microfinance for energy, using technology (e.g., remote shut-off) as a substitute for collateral, making it viable even for informal businesses.

Solar-as-a-service

• GoSolr offers subscription-based solar solutions that allow households and businesses to access solar power without purchasing the system outright. Customers pay a fixed monthly fee for a solar PV and battery system which covers installation, monitoring, servicing, and maintenance costs.

• Versofy Solar provides solar-as-a-service and rent-to-own solar solutions that enable households and businesses to access solar PV and battery systems without paying the full upfront cost. Customers can subscribe to a monthly solar service or finance systems through rent-to-own arrangements, with packages typically covering installation, monitoring, maintenance, and insurance. It partners with key commercial banks including Absa, Nedbank and Standard Bank, amongst others, to facilitate financing access for its customers.

• WiSolar provides solar electricity as a service, meaning it is not selling equipment but rather energy through prepaid and financed models. It offers solar power to households and businesses without requiring upfront purchase, including prepaid electricity-style payments and financing options. This model works well for MSMEs because it blends utility-style billing, which businesses are familiar with, with embedded finance, enabling them to access reliable power while paying incrementally and in line with their cash flows.

• Wetility offers solar and battery systems via subscription. It provides MSME customers with systems at no upfront cost with regular and predictable monthly subscription or rental fees. Furthermore, the service bundles installation, financing and maintenance into one service. In some models, there are options that enable MSMEs transition toward ownership over time.