OPPORTUNITY: Catalytic finance to green economy SMEs in Mpumalanga

The Foreign Commonwealth Development Office (FCDO) invites proposals for accountable grant funding from qualified financial service providers or fund managers to design and operate a not-for-profit intervention to deliver blended finance on concessional terms tailored to the needs of SMEs at early, growth, and scale-up stages in Mpumalanga.

It is envisaged the supplier will use UK grant finance to provide access to finance to underserved green economy SMEs in Mpumalanga, South Africa, providing a pathway to scale by leveraging commercial capital.

Concessionality could include flexible collateral, longer tenors or grace periods, or reduced lending costs through risk-mitigating structures like first-loss capital. Applicants should propose the features they find most suitable.

The financing will target green transition-aligned SMEs lacking access to appropriate finance, with the goal of mobilising private investment, boosting investor confidence, and improving SME bankability at scale. Over time, it is envisaged that repaid capital should be recycled to support additional SMEs, but applicants may suggest alternative strategies to maximise reach and impact.

What the fund will achieve

The fund will help increase economic diversification and resilience in Mpumalanga by supporting the growth of Just Energy Transition Partnership (JETP)-aligned SMEs, leading to higher employment rates. It will expand access to finance for high growth potential SMEs in green and job-creating sectors, creating sustainable jobs, including for women.

The fund will mobilise private climate finance, contributing to South Africa JETP programme targets on job creation, private climate finance mobilisation and introduction or expansion of green or transition-aligned products and services. 

Find out more about this opportunity here – https://www.gov.uk/international-development-funding/catalytic-finance-to-green-economy-smes-in-mpumalanga-south-africa