South Africa's Industrial Development Corporation will provide R70-billion of new funding over the next five years to help local companies hurt by a global downturn, a senior official said on Friday.

South Africa, Africa's biggest economy, is in its first recession in 17 years. Companies are being forced shut down or face bankruptcy as the financial crisis hits local industries.

The government has repeatedly said it would not directly help embattled companies and the IDC, a State-owned financial agency, would be key in supporting struggling industries.

"In these challenging economic times, besides supporting businesses in distress, we need to take a view beyond the crisis and continue to support start-ups and businesses planning expansions," Shakeel Meer, divisional executive for industrial sectors at the IDC told Reuters in an email.

"We are planning to provide about R11-billion in total funding in the current financial year, which is higher than the approximately R8-billion approved last year."

"Over the next five years, we are projecting R70-billion in new funding by the IDC," he said.

The IDC would not restrict funding to specific sectors, although some were more affected than others. The state financier said it would use short-term loans, guarantees, medium-term debt and even equity to support companies.

"Companies financed would typically have been profitable historically, are facing cyclical pressures due to the economic cycle and can demonstrate sustainability after the crisis," Meer said.

Meer said the cash injection was intended to support help businesses survive the difficult times and should not be used to pay off shareholders.

The IDC was talking to international development funding institutions to ensure it had sufficient funds for its investment programme.

The government institution got a €60-million credit line from the European Investment Bank and also raised $38-million from Proparco and $50-million from the China Construction Bank