South Africa’s SA SME Fund is seeking proposals from fund managers for a R400m ($23.2m) Climate Tech Fund of Funds, targeting pre-seed and seed-stage climate technology startups across the country.
The initiative marks a strategic shift for the fund-of-funds investor, which has traditionally focused on broader venture capital and growth equity investments. The climate-focused vehicle aims to allocate approximately R100m to four fund managers by early 2026.
Filling the early-stage gap
The call for proposals comes as climate tech raised approx. $700m across Africa in 2024, with the sector increasingly drawing capital despite broader funding challenges facing the continent’s startup ecosystem.
The SA SME Fund, established by members of the CEO Initiative — a collaboration between government, labour and business, has become a significant player in South Africa’s venture capital ecosystem since its creation. The organisation has invested in 16 funds across venture capital, debt and private equity, catalysing over R3bn of additional capital to partner funds.
The new climate fund targets sectors including renewable energy, water, waste, agriculture and green infrastructure, with an emphasis on supporting emerging and diverse fund managers.
Selection criteria and structure
Fund managers applying for the programme must demonstrate relevant climate tech investment experience, a quality deal pipeline and sustainable fundraising capabilities. The SA SME Fund expects selected funds to operate as standard En Commandite Partnerships with typical 2% management fees and 20% carried interest structures.
General partners will need to commit at least 0.5% of their total fund size, according to the proposal requirements. The selection process includes preferences for woman-owned and Black-owned fund managers, with carry allocation serving as the ownership proxy.
Beyond financial metrics, the SA SME Fund is assessing teams on their regulatory compliance, governance practices and track records in climate technology investments. Applicants must be registered with the Financial Sector Conduct Authority or indicate plans to obtain necessary investment licences.
Broader climate tech momentum
The initiative arrives as climate technology attracts growing attention across Africa. In 2024, climate tech startups in Africa secured 32% of total funding raised by tech companies on the continent, surpassing traditional sector leaders like fintech.
Several development finance institutions have recently launched similar initiatives. The African Development Bank’s Sustainable Energy Fund for Africa committed $10m to climate tech venture building in late 2024, while the Green Climate Fund approved a $200m facility through Novastar Ventures in October 2025.
The SA SME Fund previously established a R300m seed fund-of-funds in 2024 alongside the Department of Science and Innovation and the Technology Innovation Agency, designed to support approximately 50 technology-driven startups through experienced fund managers.
Investment strategy and mandate
The Climate Tech Fund of Funds will pursue multiple objectives beyond financial returns. The SA SME Fund has outlined goals including mobilising capital toward climate mitigation and adaptation, strengthening the local investment ecosystem and accelerating South Africa’s climate transition in alignment with national policy priorities.
The fund also aims to de-risk climate investments for institutional and international investors through structures such as blended finance, first-loss capital or guarantees. The organisation expects investments to drive job creation, community resilience and inclusive green development.
The application deadline is set for 31 January 2026, with the SA SME Fund indicating it will only communicate with shortlisted candidates. Late submissions will not be considered.
Fund managers interested in applying should submit complete proposals including team backgrounds, investment track records, detailed pipeline descriptions, fundraising strategies and governance structures to info@sasmefund.co.za.
The initiative represents one of the largest dedicated climate technology fund-of-funds programmes targeting South African early-stage ventures, though it remains modest compared to climate investment needs across the continent.