Empowerment Objectives
Through the Strategic Projects Fund, NEF will facilitate B-BBEE in the following ways:
- Warehouse equity for BB-BEE in early stage projects at valuations with little or no premium paid to access the projects. This enables NEF to distribute its warehoused equity to BB-BEE at lower valuations once a project is operational;
- Take early stage risk on behalf of black people as early stage projects have higher execution risks compared to operational companies. The NEF will assume most of the financing risk and devise instruments to carry or transfer equity to B-BBEE once project fatal flaws have been mitigated;
- Manage the project and venture capital finance structuring complexities as it is more complex and difficult to raise capital for new ventures as compared to corporate finance deals where valuations can be ascertained based on historical performance and risks are clearly understood;
- Enable project promoters to focus on making projects bankable and operational by giving the BB-BEE status as NEF is the only DFI gazetted as a B-BBEE facilitator;
