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