INDUSTRIAL DEVELOPMENT CORPORATION (IDC)
The Industrial Development Corporation is a state-owned developing financial institution that is under the supervision of the Economic Development Department. It is mandated to act as an industrial development agency to facilitate, promote and assist in the financing of industrial development funding activities. The corporation is a self-financing institution of which the South African government is the sole shareholder. The broad objective of the IDC is to contribute to the economic empowerment and the prosperity of black Africans, by developing viable economies which are sustainable as well as environmentally and socially responsible. One of IDC’s objectives, through Agriculture Business Strategic Unit, is to invest in the development of projects and businesses that either create new or expand local manufacturing capabilities and enhance competitiveness. This is done by lowering production cost, expanding production capacity and promote value-adding to agro-processing activities. Therefore, the grant focuses on agriculture and agro-processing that utilises and develops local and regional resources to supply domestic demand and increase participation in international trade.
Agro-processing and agriculture strategic business unit (SBU)
This business unit provides support to a number of economically viable activities in agro-processing (food and non-food) sectors such as:
- Horticulture and high-value crops.
- Livestock value chain like cattle, poultry and pigs.
- Wheat and sugar.
- Fishing and aquaculture.
- Horticulture including fruit, vegetables, nuts, tea and coffee.
- New and existing companies within the agro-processing and agriculture sector.
- These companies should plan to create new or expand industrial capacity within the economy.
- Funding for expansionary BBBEE acquisitions in the sector where the majority of the acquisition funds remain within the target company for expansionary purposes.
Agro-processing and agriculture industry funding
- The funding application must facilitate the creation of new industrial capacity, save and create jobs.
- Risk-sharing from operating private-sector investment partners is non-negotiable and shareholders will have to guarantee the funding of shortfall.
- Equity related funding
- It is applicable to larger investments.
- Mainly applicable when a project is perceived of strategic importance.
- Only minority interests.
- Start-up businesses: IDC’s maximum funding equates to 60% of the total funding requirement.
- Expansion projects: IDC’s can fund a full expansion if the equity structure at the peak is a minimum of 35%.
- Preferred equity structure for start-up projects of at least 50% at peak.
- IDC expects all business partners to have at least a level 5 or 4 accredited BBBEE rating or provide IDC with an undertaking to achieve these ratings within a specific period of time.
- BEE empowered, women and youth-owned businesses are encouraged to apply.
- Value-chain base projects are preferred.
A complete and comprehensive business proposal or business plan should be submitted, specifying all the particulars of the business operation, as the IDC conducts through due diligence evaluation of all proposals and projects.
Collateral will be dependent on the economic merit of individual applications, as well as the nature of the risk of the specific entity.
The owners and shareholders of the entity seeking funding should have the ability to make an equity contribution.
Applicants should comply with international environmental standards.
Applicants should have the potential to economically sustain the entity or project.
Each business proposal and request for finance is considered on its individual merit, with a minimum loan amount of R1 million.
This loan amount is charged at prime rate linked interest.
This is a fund that has been established by the Industrial Development Corporation (IDC) and the Department of Agriculture, Land Reform & Rural Development (DALRRD). It is targeting to support a wide range of economically viable activities in agro-processing i.e. food and non-food sectors. The aim is to ensure that industries such as food, beverage, fibre, forestry and agro-derivative are competitive. Furthermore, it seeks to ensure that these industries utilise and develop local and regional resources to supply domestic demand and increase participation in international trade. This fund assists clients and other businesses operating in agriculture and agro - processing subsectors within the IDC’s mandate.
- High-value export-oriented crops: citrus, avocado, table grapes, blueberries, and tree nuts (macadamia, etc.).
- Poultry: contract growers with a minimum of 200 000 birds per cycle, independent vertically integrated operations and layers with a minimum of 50 000 birds.
- Livestock: piggeries, cattle, sheep etc. in vertically integrated operations.
- Expansionary acquisitions in all of the above subsectors.
- The investee must be at least 60% black-owned.
- The acquisition of primarily agricultural land parcels and/or commercially viable agricultural sector value chain operating entities (agri-businesses).
- Support existing operations for expansion in production on privately owned or land reform farms (brownfields and greenfields operations).
- The purchasing of capital equipment and infrastructure (“CAPEX”).
- Working capital and/or production loan.
- Debt and grant to qualifying applicants only (quasi-equity/equity on a case-by-case basis).
- Scheme-related pricing.
- The grant cannot be used on its own but in conjunction with IDC funding.
- The assessment and approval process will follow current IDC processes.
- The owner’s contribution will be required.
- Politicians who hold public office at the time of application, a cooling period of 12 months after leaving the public office.
- Employees from all three spheres of government.
- Employees of state-owned enterprises (SOEs).
- Employees of all organizations serving as administrators of the scheme within credit providers.
- Foreign nationals and illegal immigrants.
- Dual citizens who hold public office in a foreign country.
- Special advisors for agricultural programmes at local, provincial and national levels.
- Part-time producer.
- Joint ventures where the targeted producer collectively exercises less than 60% of the voting rights.
- High risk politically exposed persons.
- Producers who have mismanaged previous government support.
- Distressed farmers where the grant is required to settle an existing debt.
|Location||Physical address||Contact number|
|Cape Town||2817, 28th Floor ABSA Building Centre, 2 Riebeeck Street||Tel: 021 421 4794|
Alternatively you can visit: www.idc.co.za