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Bridging the “missing middle” for green small and growing businesses in South Africa: The case of the Green Outcomes Fund

Climate change poses numerous challenges for emerging economies whilst, if framed as such, also holding promise for economic opportunity. South Africa’s economic history has benefitted from abundant fossil fuel resources, with the result that it has grown into Africa’s leading greenhouse gas (GHG) e...

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Main Author: Dobson, Blaise
Other Authors: Biekpe, Nicholas
Format: Thesis
Language:English
Published: Graduate School of Business (GSB) 2019
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access_status_str Open Access
author Dobson, Blaise
author2 Biekpe, Nicholas
author_browse Biekpe, Nicholas
Dobson, Blaise
author_facet Biekpe, Nicholas
Dobson, Blaise
author_sort Dobson, Blaise
collection Thesis
description Climate change poses numerous challenges for emerging economies whilst, if framed as such, also holding promise for economic opportunity. South Africa’s economic history has benefitted from abundant fossil fuel resources, with the result that it has grown into Africa’s leading greenhouse gas (GHG) emitter and one of the continent’s largest economies. Meanwhile, the Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5°C (IPCC, 2018a) argues that the world needs to transition towards a net zero GHG emission scenario by 2050 in order to remain within safe climatic bounds. Transitioning the South African economy towards a net zero emissions orientation is a significant challenge given the country’s historical reliance on fossil fuel sources, vested economic interests in the minerals-industrial complex, and socio-economic considerations for South African workers. Realigning capital allocations to achieve this transition is necessary to grow new businesses that can assist in creating net zero emission jobs and production, and to replace existing businesses that are unable to adapt to the net zero emission constraint. To this end, this study elucidates the barriers faced by South African green “small and growing businesses” (SGBs) in accessing capital to expand. It analyses the typical business lifecycle, financiers’ roles within the chain of finance - the J-curve - and the investment gaps that exist which could impede green SGBs from growing into mature, private or publicly listed companies. Through an analysis of primary documentation and key informant interviews, the study outlines the challenges faced by early-stage financiers investing in South African green SGBs using the Green Outcomes Fund as an instrumental case study. The research highlights a gap for early venture capital investments into green SGBs in South Africa between approximately ZAR 5‒22 million (USD 360 000‒USD 1.584 million) and makes a contribution towards the theory as to how this gap may be closed. South African policy makers can take on board the challenges faced by green SGBs and their financiers to tailor specific funding offerings supported by the public and private sector (e.g. the South African SME Fund). Moreover, failure to nurture and scale green SGBs will impede South Africa’s transition to a net zero emissions economy.
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institution University of Cape Town (South Africa)
language eng
last_indexed 2026-06-10T12:51:36.096Z
license_str Not specified — see source repository
provenance_str_mv Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository
publishDate 2019
publishDateRange 2019
publishDateSort 2019
publisher Graduate School of Business (GSB)
publisherStr Graduate School of Business (GSB)
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source_str UCTD — University of Cape Town Open Access Repository
spelling oai:open.uct.ac.za:11427/30472 Bridging the “missing middle” for green small and growing businesses in South Africa: The case of the Green Outcomes Fund Dobson, Blaise Biekpe, Nicholas Henriksen,Tine Fisker Climate change poses numerous challenges for emerging economies whilst, if framed as such, also holding promise for economic opportunity. South Africa’s economic history has benefitted from abundant fossil fuel resources, with the result that it has grown into Africa’s leading greenhouse gas (GHG) emitter and one of the continent’s largest economies. Meanwhile, the Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5°C (IPCC, 2018a) argues that the world needs to transition towards a net zero GHG emission scenario by 2050 in order to remain within safe climatic bounds. Transitioning the South African economy towards a net zero emissions orientation is a significant challenge given the country’s historical reliance on fossil fuel sources, vested economic interests in the minerals-industrial complex, and socio-economic considerations for South African workers. Realigning capital allocations to achieve this transition is necessary to grow new businesses that can assist in creating net zero emission jobs and production, and to replace existing businesses that are unable to adapt to the net zero emission constraint. To this end, this study elucidates the barriers faced by South African green “small and growing businesses” (SGBs) in accessing capital to expand. It analyses the typical business lifecycle, financiers’ roles within the chain of finance - the J-curve - and the investment gaps that exist which could impede green SGBs from growing into mature, private or publicly listed companies. Through an analysis of primary documentation and key informant interviews, the study outlines the challenges faced by early-stage financiers investing in South African green SGBs using the Green Outcomes Fund as an instrumental case study. The research highlights a gap for early venture capital investments into green SGBs in South Africa between approximately ZAR 5‒22 million (USD 360 000‒USD 1.584 million) and makes a contribution towards the theory as to how this gap may be closed. South African policy makers can take on board the challenges faced by green SGBs and their financiers to tailor specific funding offerings supported by the public and private sector (e.g. the South African SME Fund). Moreover, failure to nurture and scale green SGBs will impede South Africa’s transition to a net zero emissions economy. 2019-08-15T13:55:19Z 2019-08-15T13:55:19Z 2019 2019-08-15T12:46:04Z Master Thesis Masters MCom (Development Finance) http://hdl.handle.net/11427/30472 eng application/pdf Graduate School of Business (GSB) Faculty of Commerce
spellingShingle Dobson, Blaise
Bridging the “missing middle” for green small and growing businesses in South Africa: The case of the Green Outcomes Fund
thesis_degree_str Master's
title Bridging the “missing middle” for green small and growing businesses in South Africa: The case of the Green Outcomes Fund
title_full Bridging the “missing middle” for green small and growing businesses in South Africa: The case of the Green Outcomes Fund
title_fullStr Bridging the “missing middle” for green small and growing businesses in South Africa: The case of the Green Outcomes Fund
title_full_unstemmed Bridging the “missing middle” for green small and growing businesses in South Africa: The case of the Green Outcomes Fund
title_short Bridging the “missing middle” for green small and growing businesses in South Africa: The case of the Green Outcomes Fund
title_sort bridging the missing middle for green small and growing businesses in south africa the case of the green outcomes fund
url http://hdl.handle.net/11427/30472
work_keys_str_mv AT dobsonblaise bridgingthemissingmiddleforgreensmallandgrowingbusinessesinsouthafricathecaseofthegreenoutcomesfund

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