IDC Overview:

The primary mandate of the IDC is the development of industrial
capacity - anchored in IDC founding Act, 1940

IDC’s founding Act is as valid
today as it was back in 1940:“…to facilitate, promote, guideand assist in the financing of
new industries and industrial
undertakings and schemes forthe expansion, betterorganisation and modernisationof, and the more efficient
carrying out of, operations inexisting industries and industrial
undertakings, to the end that theeconomic requirement of theUnion (South Africa) may be
met, and industrial development
within the Union may beplanned, expedited andconducted on sound principles.”Achieved through identifying sector development opportunities aligned with policy
objectives from the relevant government policies primarily the NDP, NGP and IPAP
While developing industrial capacity, IDC seek to achieve specific outcomes:
Facilitating sustainable direct and indirect employment
Improving regional equity, including the development of South African rural areas,
underdeveloped provinces and economic development in the rest of Africa
Promoting entrepreneurial development and growing the SME sector

Promoting environmentally sustainable growth

Growing sector diversity and increased localised production
Supporting the transformational impact of communities and development of blackindustrialists, women and youth2

Where we play

Priority Sectors
Metal beneficiation and mining

Agro-processing and agriculture

EnergyClothing and textiles

Industrial Infrastructure

Tourism, ICT and media

Upstream and downstream chemicals

Healthcare services

Other manufacturing industries

New industries with potential to develop into significant
opportunities for the country

IDC’s Funding Products –Structured to meet business’ needs

Business Cycle Stage• Funding can be structured utilising a wide arrayof instruments including:• Debt;Project Development• Guarantees;• Trade finance;

Start-ups

Expansions

Expansionary acquisitions

Distressed businesses• Bridging finance;• Equity and quasi-equity, can beconsidered.
• Funding structured to suit the business’ needs:• Term of the funding• Grace periods for repayment (principallyin start ups)
• Concessionary pricing on targeted
development impact funding schemes eg.
Jobs, targeted sector / region)• IDC’s business support programme addresses
non-financial support to entrepreneurs.

DFIs’ Positioning within the South African Financial Landscape
How to work better with Government and DFI’s to facilitate growth and transformation

Greater importance on social and developmental objectives
Greater importance on financial objectives
Government / NGOs
• Non-commercial focus• Development objectives(social)• Funded through

DFIs

Commercial Financiers• Commercial and developmentfocus• High commercial focus• Sharing risk

• Financial objectives• Funded through• Known risks• NGOS - donations• Internally generated funds,• Government - fiscal
transfers and grants• Loans• Government funds (targeteddevelopment outcomes)• Private sector capital• Funded through• Deposits• Debt

DFIs encourage cooperation to achieve their goals. Businesses should approach the different players in thefinancial landscape based on their stage of development and funding requirements

5

Financial model – IDC operates as a Bank
Proceeds from this funding are used to repay borrowings,
cover our costs and grow our balance sheet to re invest infuture businesses

IDC is funded through• Internal profits• Divestments from matureinvestments• Borrowing in domestic andinternational markets

Loan funding
Interest repayments

Capital repayments

Dividend receipts

Capital growth andrealisation

We use this capital toprovide funding tobusinesses in the formof loans and equity
investments

Equity funding
IDC relies on borrowings, internal profitability, capital growth and exits from mature investments tomaintain and expand its funding ability

There is a need for the companies funded by the IDC to demonstrate financial sustainability as IDC relies on
repayments and dividends to repay funders in domestic and international markets
6

IDC’s processes - Deal origination, assessment and postinvestment
Key Messages
Pipeline
Applications fromexisting/prospective
businesses
Proactive
identification anddevelopment ofprojects

Screening

Assessment and decision

Basic assessment

Detailed due-diligence/feasibility
study assessing development
impact and sustainability ofopportunities:

Pre-feasibility• Development outcomes• Market for products/services• Technical viability andcompetitiveness• Financial viability• Management• Legal• Environmental impact• Etc.

Structuring of funding
depending on client’s needs
Approval of viable transactions
at appropriate committee

Implementation andmonitoring•

Legal agreements
Meeting conditions•

Disbursement
Ongoing monitoring of client
performance after funding isdisbursed•

Interventions in businesses
experiencing difficulties• Business support• Restructuring of facilities• Etc.

•IDC conducts a thoroughdue diligence todetermine risk in abusiness and the ability ofthe business to deliver on
projections
This is particularly so withstart-ups that have notrading history and forwhich IDC has notransactional history
Based on experience,
critical success factors
need to be in place inorder for a start up to be
successful:• technical expertise• management
expertise• market• skin in the game
These are assessed atthe various stages of theDD
7

ORGANISATIONAL STRUCTURE
DuncanMacleod
Technical Services

TP Nchocho
Chief Executive
Officer

Joanne Bate
Chief
Operational
Officer

VacantFinancial Services
Partnerships

VacantIndustry andProject
Development

Trevor Arran
Mining, Metals,
Infrastructureand Energy

ShakeelMeer
Manufacturing

William Smith
Agro-Industries,
Services, &Small-Bus
Finance

Lucretia
Khumalo
Client Support
and Growth

VacantIndustry
Planning andProject
Development

Rian
Coetzee
Mining andMetals

Kugan
ThaverMachinery,
Equipment andElectronics

Manoj
SeonathAgroprocessing andAgriculture

DanileNyakaleSubsidiaries
and Significant
Investments

Stuart Bartlett
Partnership
Programmes

Nina YoseInfrastructure

Joy
Balepile
Automotive andTransport
Equipment

Moseketsi
Mpeta
Tourism andServices

MahomedMoollaPortfolio

Management

Phiwe Marumo
Continental
Coverage

Christo Fourie
EnergyHiltonLazarus

Maijang
MpherwaneMedia andAudio-Visual

Mpho
MosweuBusiness
Advisory andTurnaround

Chemicals,
Medical andIndustrial Mineral
Products

Mark Goliath
Textiles andWood ProductsDavid
McGluwa
Small Business
Finance andRegions

Nonkululeko
Dlamini
CFO

Bassy
MakwaneLegal andCompliance

Patience
Mushungwa
Human CapitalDavid Jarvis
Strategy andCorporate
Affairs

WendyMathebulaCredit Risk

Nozibele
Tshobeni
Financial
Management

Tshepo Legodi
Legal
Services

HolgerFischer
HC Business
Partners

Nontokozo
HadebeCorporate
Strategy andInnovation

GeraldTinonetsana
Manager: Officeof the CEO

VacantOperational
Risk &Sustainability

Grant
Augustine
Procurement

Lydia
MdluliTalentManagement
andOE

Jorge
Maia
Research andInformation

NicholasKekanaInternal Audit

Den
Dwane
Total Rewards& SharedServices

TshepoRamodibe

Josephine
Tsele
CRO

ThatisiManamela
ALM andMarket Risk
Philani
MasukuInformation
Technology

LeratoMangope
Corporate
Treasury
SakiweSizani
Strategic
Financial
Planning

TokeloMoloi
Legal:
Recoveries,
Business Recue& Insolvencies
Thabo
MoorosiCompliance&Regulatory
Affairs

Mando Mabuza
Learning andDevelopment

Corporate
Affairs

VacantGroup
Secretariat
Zoliswa
CopisoCorporate
Secretariat

Busi Khumalo
Facilities
Management1

Purpose for IDC Funding
14

15

17

39%

40%

13

12

100%

38%
47%

60%

36%

34%

33%
29%

Approximately 75 % of IDC
funding consistently goes
towards start-ups andexpansions

16%
7%
4%
12%
2016

10%
1%
13%
2017
Capacity expansions
Projects and new start-ups
Ownership changes

8%
7%
13%

2%

3%

12%
2%

19%

13%

2018
2019
2020
Expansionary ownership changes
Distressed businesses
910-Year Development Impact Highlights║

Played a catalytic role to stimulate inclusive economy since 2009 financial crisis

Industrial Capacity
Development

R120 bn
Disbursements

Transformation

R28.8 bn
Black Industrialists

R15.2 bn
242 404
Jobs

Women Empowered

R6.2 bn
Youth Empowered

2 098
Business Partners
BI/Women/Youth schemes tracking started in 2015

IDC has continued to play a catalytic role in linewith what is expected of DFIs in challenging
economic conditions by:• maintaining higher levels of funding to support& stimulate investments• Contribution into key sectors of the economy& country’s programmes – World Cup
infrastructure, REIPPP• strong track record in championing economictransformation

R69.4 bn
Black Emp. & Owned1
1. >25% is black empowered, >50% is black owned

10Funding partnerships have been critical in the IDC
leveraging & enhancing development impact
GRANTS

IDC has been
managing c.a.
R12.3 billion
across 9 funds
Most arecapitalised by SA
government
departments.

TIRISANO CONSTRUCTION FUND

MANUFACTURING COMPETITIVENESS ENHANCEMENT PROGRAMME

R1.5 billion

R1.8 billion

To provide funding support for the construction industry
GREEN TOURISM INCENTIVE PROGRAMME

R142.5 million
To support tourism enterprises to use clean energy and conserve water

Concessionary working capital and plant and equipment funding for black industrialists
MCEP COVID 19 FUND

R300 million
To assist manufacturers of essential products in response to the Covid-19 pandemic
DOWNSTREAM STEEL INDUSTRY COMPETITIVENESS FUND

FLANDERS SOCIAL ENTERPRISE FUND

R30.7 million
To Fund Social Entreprises and social economy linked activities

CLOTHING AND TEXTILES COMPETITIVENESS PROGRAMME

Flanders Social
Enterprise Fund isfrom theGovernment ofFlanders.

NON-GRANTS

R3.1 billion

R300 million
To assist manufacturers of essential products in response to the Covid-19 pandemic
AGRO PROCESSING COMPETITIVENESS PROGRAMME

R300 million
To assist manufacturers of essential products in response to the Covid-19 pandemic

To fund companies in the clothing and textiles industry to develop world classmanufacturing principles

KHOEBO INNOVATION PROMOTION PROGRAMME

R450 million

Overall impact
No. Companies/interventions supportedJobs created / saved658
99 796Funding for early stage SMEs offering innovative products and processesIn conclusion………
•

In a muted economic growth environment, the IDC has continued to invest significantly
in new industrial capacity, creating jobs and driving transformation•

The economic context, exacerbated by the Covid-19 pandemic, has placed financial
strain on the Corporation’s financial performance for the year•

Our strategy conceived during the financial year provides a balanced focus on financial
sustainability and development effectiveness•Our subsidiaries, although contributing to losses, are starting to show improvement
following implementation of turnaround strategies•

As the country prepares itself for recovery from the Covid-19 pandemic and thelacklustre economic performance that was prevalent before its onset, the IDC will playa catalytic role in recovery and believes that a new commitment for cooperationand partnership is essential

THANK YOU13