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ICT (INFORMATION COMMUNICATION TECHNOLOGY) INDABA - POLOKWANE
Day Month Year
Loni MamatelaRegional Manager – Limpopo
18 December 2008
Agenda
Background Sectoral Involvement IDC Business Units Financial Instruments Financing Criteria SME Development Competitive Financing Structure Examples of IDC Funded Projects
Background: Corporate profile
The IDC’s Head Office in Sandton (Johannesburg)
• Established in 1940, the IDC is a self -financing, State-owned development finance institution
• Pays income tax at corporate rates and dividends to the shareholder
• Aims to maximise developmental and financial returns within an acceptable risk profile
Background : Vision Statement
IDC Corporate Vision Statement
To be the primary driving force of commercially sustainable industrial development and innovation to benefit South Africa
and the rest of the African continent.
Background : Mission Statement
IDC Mission Statement
Sustainable economic growth
Economic empowerment of the Southern African population
Promotion of entrepreneurship
Competitive industries and enterprises
1997
Agriculture Mining Manufacturing Property
Now
Agriculture Mining Manufacturing Services - related
• energy• tourism• IT• telecoms• motion pictures• healthcare & education• transport & storage• venture capital• government / corporate tenders• franchising• financial services• construction• 2010
Other• public private partnerships• development agencies
New sectoral involvement
Funding by IDC business units
Strategic Business Units: % share in terms of value (2006 & 2007)
SBUs: % share in term of value
0 5 10 15 20 25 30 35 40
Chemicals, Textiles and Allied Industries
Food, Beverage and Agro Industries
Metals, Transport and Machinery
Mining and Beneficiation
Public & Private Partnership
Wood, paper and Other
Franchising
Healthcare and Education
Media & Motion Pictures
Techno-Industries
Tourism
Transport, Financial Services & Other
2010 & Construction
20062007
%
Financial instruments
Flexible deal structuring
– Equity
– Quasi-equity
– Commercial debt
– Wholesale & bridging finance
– Share warehousing
– Guarantees
– Export/import finance
– Short-term trade finance
– Wholesale venture capital
• IDC offers a wide array of financial instruments, including :
• These may be provided singly or in combination
• Financial assistance is provided for the
development of new projects, expansions or
rehabilitation of existing projects
• Projects must exhibit economic merit (i.e.
profitable)
• IDC finances fixed assets and fixed portion of
growth in working capital requirements
• Reasonable contribution expected from
promoter/s
• R1 million minimum
• Security
• Environmental compliance
Financing criteria
Various approaches geared towards
developing small and medium-sized
enterprises (SMEs):
– Franchising (providing finance to franchisor
and franchisee)
– Risk Capital Facility (targets private SME sector
through BEE)
– Special development financing schemes
(Transformation and Entrepreneurship Scheme)
– Non-financial forms of business support
(entrepreneurial skills development; research
assistance)
SME development
SME development (cont.)
Business support to SME sector:
• Providing greater pre-investment support for high potential / high impact investments
• Closer monitoring of clients
• Providing technical support post-investment
• Focused training to meet needs of specific entrepreneurs
Funding Broad-based BEE
• IDC, as a major South African DFI, remains fundamental to
the national agenda to realise BBBEE objectives
• IDC has developed critical skills and experience in
financing BBBEE
• To augment these BBBEE objectives and remain a
significant player in BBBEE funding, job creation and
BBBEE remain the overarching factors in all our funding
activities:
facilitate ownership of businesses ensure transfer of skills to enhance management
capacity and entrepreneurship advancement of HDSA employees (share and/or
profit participation) employment equity procurement policies women advancement in business
TES Structure
WomenEntrepreneurial
FundR 400 m
40%
Investment: R360mBus. Support: R40m
DevelopmentFund
R 250 m25%
Investment: R242,5Bus. Support: R7,5m
Community Fund
R 150 m15%
Investment: R145mBus. Support: R5m
EquityContribution
FundR 150 m
15%
Investment: R135mBus. Support: R15m
People withDisabilities
FundR 50 m
5%
Investment: R45mBus. Support R5m
TRANSFORMATION AND ENTREPRENEURIALSCHEME
R 1 Billion
Some of IDC’s South African projects
• Vaccine production• Nuclear power generation• Satellite launch technology• Canola oil extraction• Fruit juice production• Cold rolled steel• Bio-reactor• Fish processing
• Beta-carotene production
• Goat farming• Abalone spat• Fruit production• Cotton ginning
• Fruit production• Sugar beet• Aluminium
smelter• Berries farming• High pressure
aluminium castings
• Biomass – fuel pellets
• Wood processing • Citrus farming
• Barley and groundnuts• Chrome chemicals• Cut flowers• Ferrochrome• Alluvial diamonds
• Biodiesel• Proxide
production• Silicon metal• Apple farming• Diamonds
• Cellular communications
• IDZ infrastructure• Kenaf crop production• Sugar production• Orchid production• Cassava production• Biofuels• Ceramic tile production• Power station• Citrus production• Ferrochrome• Biological pest control• Alcohol production• Coal mining• Aluminium beneficiation• Forestry• Berries farming
• Coal mining• Stainless steel
• Lime mine and kiln• Coking coal briquettes• Platinum
• Rail transport infrastructure• Electro-activated water• X-ray machines
LegendPre-feasibilityFeasibilityPre-implementationImplementation
Day Month Year
The Industrial Development CorporationSuite no 6, Biccard Park , 43 Biccard Street , PolokwaneSuite 422, Private Bag X9307, Polokwane, 0699South AfricaTelephone (015) 299 4080Facsimile (015) 295 4521E-mail polokwane@idc.co.za
Thank youThe Industrial Development Corporation
19 Fredman Drive, SandownPO Box 784055, Sandton, 2146
South AfricaTelephone (011) 269 3000Facsimile (011) 269 2116
E-mail callcentre@idc.co.za