On the 26th of January 2021, President Cyril Ramaphosa addressed the virtual launch of the Tourism Equity Fund aimed to drive transformation in the tourism sector.
The R1.2 billion Tourism Equity Fund (TEF) has been established by the Department of Tourism in partnership with the Small Enterprise Finance Agency (SEFA) as a new financial support mechanism to stimulate investment and transformation in the Tourism sector.
The fund is aimed at creating an inclusive and growing tourism sector by supporting entrepreneurship and investment on the supply side of the tourism sector. The fund will offer a combination of debt finance and grant funding for large capital investment projects in the tourism sector.
The South African Economic Reconstruction and Recovery plan identifies the tourism sector as one of the key priority areas to revive the economy
The Fund will focus on tourism enterprises in the following sub-sectors:
- Accommodation, e.g. hotels, lodges, resorts and self-catering units and backpacker facilities.
- Hospitality and related services, e.g. conference and convention venues attached to a substantial accommodation element, privately owned attractions in already developed tourism nodes.
- Travel and related services, e.g. tour operators.
- Any other tourism related products and initiatives not referred to above which supports tourism development imperatives and economic impact in terms of job creation, geographic spread and strengthening the tourism offering of South Africa.
Eligibility criteria:
To be eligible for funding:
- The enterprise has to be a registered legal entity in South Africa in terms of the Companies Act, 1973 (as amended)
- The entity needs to be 100% owned by South African citizens.
- The entity needs to be predominantly black owner-managed and controlled (51%).
- The entity needs to be registered and compliant with the South African Revenue Service.
- The entity must be operating in the qualifying sub-sectors.
The minimum project value for TEF applications is R10 million. The funding provided to a successful applicant will include a grant up to a maximum of R 20 million, a concessionary loan, a sefa loan up to a maximum of R15 million and the balance to be covered by a loan from a commercial bank.
Application procedure:
- Applicants should submit their application forms and supporting documents directly to sefa, who will assess applications for commercial viability and TEF eligibility.
- More detailed information on the TEF as well as an application form and checklist can be downloaded from the sefa website: www.sefa.org.za
- Note that incomplete applications will not be considered for funding.
For more information and enquiries, contact: tourismequityfund@sefa.org.za
