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AGENCY DEVELOPMENT AND SUPPORT (ADS)
DEPARTMENT
IDC SUPPORTING LOCAL ECONOMIC
DEVELOPMENT
PRESENTATION OUTLINE
• Key ‘mistakes’ made by municipalities when applying for funding
• Good practices for funding proposals
• Tips on how to improve proposals and packaging of their projects
New ADS Initiatives
• Social Enterprise Fund
• Spatial Intervention Fund
• 3rd Party Funds
• Inclusive Business
CHALLENGES FACED BY MUNICIPALITIES :
• Lack of engagement with the private sector especially chambers of commerce and
industry in the areas in which municipalities/development agencies operate
• Political interference and influence in the functioning and operation of
municipalities/development agencies and tensions within the parent municipality as
to where development priorities lie
• Lack of skilled staff and resource constraints within municipalities/agencies .
• Financial uncertainty and medium/long term viability leads to staff uncertainty about
their future which leads to lack of continuity.
CATALYTIC PROJECTS:
• catalytic projects often take time to develop,
plan and implement and, even once launched
and implemented, these projects take further
time to mature. It is only in the implementation
and maturity phases of a catalytic project that
the full impact of development initiatives will be
visible in terms of job creation and economic
spin-off.
Operational model
Sector specialization through
Strategic Business Units (SBUs) …
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Agro-Industries
Mining & Beneficiation
Chemicals & Allied Industries
Metals, Transport & Machinery Products
Textiles & Clothing
… utilising two business
Forestry & Wood
channels…
Tourism
Media & Motion Pictures
• Industrial Finance
Techno Industries
• Project development
Healthcare
Green Industries
ICT
Strategic High Impact Projects
Venture Capital
… flexible application of a large
variety of financial products
• Equity
• Mezzanine debt/quasi equity
• Commercial debt
• Guarantees
• Trade finance
• Bridging finance
• Share warehousing
• Special funding schemes
• Business support products
• Project feasibility funding
• Venture Capital
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Special IDC Schemes - generic
Gro-E Scheme
UIF Job Creation
Fund
Transformation and
Entrepreneurial Scheme (TES)
• R2 billion, 5-year, listed private placement
bond
• Women Entrepreneurial Fund (R400
million)
• Cost per job up to R450 000 will be
eligible
• People with Disabilities Fund (R50 million)
• Pricing @ 6.0% fixed;
• Equity Contribution Fund (R150 million)
• Minimum = R1 million & Maximum of R1
billion per project
• Extent of discount is based on the risk
and developmental impact
• Community Fund (R150 million)
• Business must have prospects of
acceptable profitability to service its
obligations
• Maximum = R100m
• 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
• Cost per job created should not exceed
R450 000
• B-BBEE certification from an accredited
verification agency is required
• Development Fund (R250 million)
• Only senior debt instruments
• Client is required to drawdown within 7
months after approval
Distressed
Funding
• R6bn made available for companies
negatively affected by the recent
international financial crisis
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CORE STRATEGIES/NEW INITIATIVES
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Social Enterprise Fund :
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The fund aims to provide grant funding to establish (start-up) and develop
(grow, replicate, scale) social enterprises and entrepreneurs;
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Spatial Intervention Fund :
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The fund aims to promote, facilitate and implement economic development in a
specific area, to address spatial disparities, harness job creation opportunities
and bring about meaningful change.
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Inclusive Business
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3rd Party Funding
Day Month Year
The Industrial Development Corporation
19 Fredman Drive, Sandown
PO Box 784055, Sandton, 2146
South Africa
Telephone (011) 269 3000
Facsimile (011) 269 2116
E-mail [email protected]
THANK YOU
Ornet Nene
Agency Development & Support (ADS)
Tel: 011 269 3863
Fax: 086 210 3863
E-mail: [email protected]
Website: www.idc.co.za