How a new green business facility in South Africa is connecting local companies to the global green economy
Traditional trade mission functions are becoming obsolete. Over hors d'oeuvres, business cards are exchanged, elevator pitches are delivered but, in most cases, entrepreneurs leave with empty promises to stay in touch and no useful contacts. This may sound a little cynical but the reality is that in an age of business models “ripe for disruption,” the ways to create viable business partnerships across borders have not changed for decades.
The reasons for business matchmaking have not changed much either. In South Africa, green small and growing businesses are often under-resourced or inexperienced when attempting to access the global assets required to build a competitive advantage. On the other side of the coin, established overseas-based companies looking to enter South Africa struggle to gather intelligence on the local “green” economy and isolate the high-potential companies operating in that space.
The traditional matchmaking provided through trade missions is not focused at the firm level; there is no trusted intermediary to play the facilitation role, and private consultants are unaffordable. A “do-it-yourself” approach is not an option either: Where would one start?
With support from the government of the United Kingdom, the World Bank Group’s Climate Technology Program (CTP) and GreenCape — a non-profit sector development agency based in Cape Town, South Africa —have come up with a solution that can address this service gap.
GreenCape and CTP have launched a cross-border business matchmaking facility that links global companies to local green businesses in South Africa. By leveraging CTP and GreenCape’s expertise and connections in the local ecosystem, the program provides market insights and technical support to trade missions organized by embassies and investment promotion agencies, as well as matchmaking facilitation between foreign companies and South African firms. By facilitating partnerships and the diffusion of innovative green business models, the project aims to stimulate and catalyze the growth of local and regional green markets.
High-potential partnerships are identified through a preliminary analysis of the sector and the firms’ market needs. After conducting a first-level due diligence on the local companies identified, the facility provides interested foreign firms with curated lists of potential business matches and proceeds to facilitate connections through events, meetings, seminars, and direct introductions.
For example, in January, the matchmaking facility co-created a trade program for a clean-tech business delegation from Finland. The program offered market insights, provided curated list of local ventures, facilitated partnership opportunities, and organized a tailored industry seminar. Over 80 local stakeholders — including companies and municipalities — attended and over 100 connections were made between Finnish and South African firms.
The journey so far
To track and improve its success, the facility is monitoring, among other indicators, the number of stakeholders expressing interest in the service, matches identified, and agreements and deals generated.
The results so far have been very positive. During its first four months of activity, the facility has assisted more than five clean-tech delegations and 60 green companies. Three letters of intent between businesses and a formal partnership agreement between an Italian photovoltaic company and a local energy savings firm have been signed.
“The information you sent me and the selection of firms for the inbound mission was very accurate. Consequently, the inbound solar PV firm has already signed a Technical Partnership Agreement with one of the matches provided from the cross-border facility.” – Claudio Ruffini, FinMasters SA
Ultimately, CTP and GreenCape aim to innovate the traditional trade mission and business matchmaking model through a unique service offering that combines market intelligence, business model diagnostics and access to a local and global network of clean-tech firms and green organizations.