Gauteng Business News

Send  Share  RSS  Twitter  06 Jun 2012

SMALL BUSINESS: Energy Efficiency Experts on Opportunities for Small Busines


Recent Gauteng Business News

In South Africa, the market conditions are ripe for the expansion of the energy efficiency marketplace. With the growing level of public and private sector incentives available and rising energy costs, businesses of all sizes recognize the opportunities available to reduce their energy usage and operating costs. It is particularly important for smaller businesses, however, given the challenges facing this sector.

To expand energy efficiency opportunities for small and medium enterprises (SMEs), the United States Agency for International Development (USAID), the Industrial Development Corporation (IDC) and the International Finance Corporation (IFC) convened a workshop with more than 80 representatives from the energy and financial sector as well as government and development partners.

Expanding Finance for Energy Efficiency

At the workshop, the USAID Financial Sector Program presented the results of a recent energy efficiency study. The aim of the mapping exercise is to understand the opportunities to engage financial intermediaries to expand financing for energy efficiency within the SME sector and to understand how financial institutions can support expansion of these firms in the delivery of energy efficiency products and services.

“Given the favorable conditions for the expansion of energy efficiency in South Africa, the USAID Financial Sector Program is working with financial institution partners to explore new products and services that would stimulate the market for Energy Services Companies (ECSOs) and other small and medium sized businesses that are active in the energy efficiency space. Our goal is to support development of SMEs which are creating a significant and growing number of new jobs, stimulating entrepreneurship and generating positive economic growth,” said Cathy Moore, acting Mission Director, USAID.

The IDC is mandated by the New Growth Path and the Industrial Policy Action Plan to develop entrepreneurs that will facilitate South Africa’s transition into a low carbon economy, through the financing of Green Technologies. In support of this mandate, IDC launched a R500 million Green Energy Efficiency Fund (GEEF) in partnership with the German Development Bank (KfW) in October 2011.

Energy Efficient Projects to Reduce Greenhouse Gas Emissions

“IDC continues to look for innovative ways to fund the energy efficiency sector and increasing access to finance for SMEs and nascent energy saving industries such ESCOs. To this end, the IDC has commissioned a study on the development of a vibrant ESCO market. The study aims to develop funding strategies and instruments to address the identified barriers, where financing remains a barrier,” Rentia van Tonder, Head Green Industries SBU, IDC.

In partnership with the Swiss State Secretariat for Economic Affairs (SECO), IFC’s Climate Change Investment Program for Africa (CIPA) helps financial institutions identify, evaluate and finance viable renewable energy and energy efficiency projects that reduce greenhouse gas emissions and mitigate climate change.

With a focus on South Africa and Kenya, the program works with financial institutions to develop and implement sustainable energy finance products and undertake sustainable energy lending. In addition, the program also is looking to support the ESCOs through capacity building with the aim being to create a conducive environment for ESCOs to access sustainable energy funding from financial institutions.

“We welcome this energy efficient opportunity to deepen our partnership with USAID and IDC as well as our engagement with key players in the market, said David Crush, Regional Business Line Leader, Access to Finance, IFC.

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