The Industrial Development Corporation (IDC) has set aside R10 billion in loan funding to help the private sector to create jobs, and another R25 billion to invest in the green economy.
Speaking at a press function yesterday afternoon, CEO Geoffrey Qhena said the R10 billion fund is open to all sectors covered by the IDC's mandate, which includes ICT. He noted that applications will be considered for loans ranging from R1 million to R1 billion.
The R10 billion loan facility, which will run over a five-year period, has been priced below market rates, at prime minus 3%. The prime lending rate is currently 9%.
Qhena's announcement follows president Jacob Zuma's state of the nation address earlier this month, in which he said job creation was a key priority. Zuma announced the establishment of a jobs fund of R9 billion, in addition to the IDC fund, to invest in “economic activities with a high jobs potential”.
“It cannot be business as usual; we need to ensure new industries are created,” Qhena commented.
He said the IDC's focus sectors, which include ICT, will be aligned with government's new growth plan and the Industrial Policy Action Plan.
Green tech boost
The corporation has not split the funding into specified amounts for each of its mandated sectors, explained Qhena. However, the IDC does have specific focus areas within the ICT sector that can benefit from funding.
Schumann says the corporation also supports the business process services area, but concentrates on higher value segments, such as legal service and accounting outsourcing.
The IDC is also keen to support an electronics industry, says Schumann. She explains that there are opportunities for electronics and hardware design in SA, but the corporation will move cautiously into this area.
In addition to the R10 billion fund, the IDC has earmarked R25 billion to be spent on the green economy, which covers the entire value chain of the green economy, including green technology.
Qhena said the funds can be accessed by start-up companies, as well as established firms, and payment holidays can be arranged. The IDC has also reviewed its pricing model, and projects that have a high development impact will benefit from a percentage point reduction on the loan facility.
The IDC anticipates that between 40 000 and 50 000 new jobs will be created through the R10 billion fund.
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