Jowell Tobias Regional Office: Northern Cape

February 2014

IDC - Corporate profile

• • • • • • • • •

Established: Corporate type: Objectives: Activities:

October 1940 Development finance institution, mandated by Act Increased industrial capacity Provide risk capital to viable businesses in various sectors Regional mandate: South Africa & the rest of Africa (since 1998)

Shareholding:

Government of South Africa = 100% shareholder

Reporting: Funding: Governance:

SA Ministry of Economic Development 100% self-financing Follows normal company policy and procedures

Partnerships, Professionalism & Passion

IDC Head Office, Sandton, SA

Role of IDC’s Regional Office

•

Strategy for regional development

•

Proactively

identify and support investment opportunities •

Improve

IDC’s

efficiency

&

accessibility

 Convenience (district visits)  Personal attention  Package applications to conform to IDC norms  Involve other stakeholders e.g. Landbank, NEF, DBSA, DoA, Water Affairs •

Business Support

• Represent all IDC sectors

IDC Regional Office, Kimberley

Sectoral focus

Agro processing Green and energy saving industries Bio fuels Clothing, textiles, footwear, leather Metals fabrication, capital and transport equipment Automotives, components, medium and heavy commercial vehicles Advanced manufacturing Plastics and chemicals Pharmaceuti cals Forestry, paper & pulp, furniture Logistics Industrial infrastructure Healthcare ICT Mining related technologies Biotechnology Mining Cultural industries: Craft and film Downstream mineral beneficiation Business process services Tourism

Legend:

IPAP New Growth Path 4

Strategic Business Units

• • • • • • • • • • • • •

Agro Industries Forestry and Wood Products Metal, Transport and Machinery Mining and Minerals Beneficiation Textiles and Clothing Chemicals and Allied Industries Tourism Media and Motion Pictures Information and Communications Technology Venture Capital Healthcare Green Industries Strategic High Impact Projects and Logistics

Special IDC Schemes

Gro-E Scheme

• R10 billion available for 5 years • Loans @ Prime - 3% for the first 5 years • Equity @ 5% RATIRR • Capital and interest payment holidays as per financial needs of the business • Minimum = R3 million & Maximum of R1 billion per project • Business must have prospects of acceptable profitability to service its obligations • Cost per job created should not exceed R500 000 • B-BBEE certification from an accredited verification agency is required

UIF Job Creation Fund

• R2 billion unsecured 5-year listed private placement bond • Cost per job of up to 450,000 will be eligible • Pricing @ approximately 6.0% - 10.0% fixed; • Extent of discount is based on the risk and developmental impact • Maximum = R100m • Only senior debt instruments • Client is expected to drawdown within 7 months after approval

Transformation and Entrepreneurial Scheme (TES)

• Women Entrepreneurial Fund (R400 million) • People with Disabilities Fund (R50 million) • Development Fund (R250 million) • Equity Contribution Fund (R150 million) • Community Fund (R150 million)

Distressed Funding

• R6,1bn made available for companies negatively affected by the recent international financial crisis

Gro-E Youth scheme

• • • • • • •

Earmarked R1 billion of the Gro-E scheme to businesses owned by young people (age less than 35); Loans at prime less 3% to businesses; Industries falling within IDC’s mandate; Are creating new jobs; Available to South African citizens; Minimum amount for finance is R1 million; Experienced entrepreneurs to join with the youth in establishing businesses to ensure that these new entrepreneurs are coached and mentored.

Gro-E Youth scheme (cont.)

Criteria and terms of the scheme:

• • •

Start-up businesses; Existing businesses for expansionary purposes; Businesses that demonstrate economic merit;

• • •

For the duration of the funding period; Maximum cost per job does not exceed R500 000; Broad-based Black Economic Empowerment certification, where applicable;

• • • • •

Businesses operating or expanding in South Africa; Funding period will be structured to meet the cash flow needs of the business; Appropriate capital and interest payment holidays will be applied; There is no prescribed minimum for owner contribution; Shareholding by youth of more than 50%.

Business Support

• • • • •

Technical assistance (TA) for IDC clients; Outsourced Consultants, Mentors, Coaches legal experts provide TA; Training courses delivered through IDC Learning & Development (External) Dept.; Training offered to investee members of the Board of Directors / Trustees, Management Team, middle management, supervisors & staff destined for promotion Funding principle: Cost sharing between IDC and Client



The norm is: 50% Grant funding and 50% Client own contribution;



Client own contribution: business cash flow OR a low interest or zero rated loan.

Appraisal & approval process

Enquiry& Application Initial Screening Approval Due Diligence Legal Agreements Disbursements Basic Assessment Term Sheet Post Investment Management/ Business Support

Green Energy Efficiency Fund (GEEF)

• Programme supported by German Development Bank (KfW) • To support and promote energy efficiency and renewable energy investments • R500 million facility for energy efficiency and small scale renewable energy projects

Conditions:

• Financially viable energy efficiency projects • Private sector companies registered and operating in South Africa • Loans ranging from R1 million to R50 million • At a concessionary rate of prime less 2% • Repayments of up to 15 years, depending on the energy efficiency or renewable energy technology • Standard IDC fees, credit policies and procedures apply • Loans available in ZAR

Thank you

Industrial Development Corporation 13 Bishops Avenue, Kimberley PO Box 808, KImberley 8300 South Africa Telephone (053) 807 1050 Facsimile (053) 832 7395 E-mail [email protected]