http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.71Change: 0.11
R/$ = 10.86Change: -0.02
Au 1203.15 $/ozChange: -21.03
Pt 1246.50 $/ozChange: -23.70
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jun 26, 2008

IDC to scale up investments to R60bn over five years

Back
Cape Town|Engineering|London|Africa|African Development Bank|Alcan|Cable|Cogeneration|Eskom|IDC|Industrial|Industrial Development Corporation|Investment Bank|Nuclear|PROJECT|Projects|Renewable Energy|Renewable-Energy|Systems|Transnet|Africa|France|Germany|South Africa|USD|Automotive|Chemicals|Cogeneration|Development Finance Institution|Electricity Shortages|Energy|Energy-intensive Projects|Forest Products|Manufacturing|Nuclear|Products|Renewable-energy Systems|Steel|Steel Fabrication|Systems|FIFA|Cogeneration|Fabrication|Geoffrey Qhena|Gert Gouws|Infrastructure|Power|Cable|FIFA World Cup|Broadband
Engineering||Africa|Cable|Cogeneration|Eskom|Industrial|Nuclear|PROJECT|Projects|Renewable Energy|Renewable-Energy|Systems|Transnet|Africa|||Automotive|Cogeneration|Energy|Manufacturing|Nuclear|Products|Steel|Systems||Cogeneration|Fabrication|Infrastructure|Power|Cable||
cape-town|engineering|london|africa-company|african-development-bank|alcan|cable|cogeneration|eskom|idc|industrial|industrial-development-corporation|investment-bank|nuclear-company|project|projects|renewable-energy|renewable-energy-company|systems-company|transnet|africa|france|germany|south-africa|usd|automotive|chemicals|cogeneration-industry-term|development-finance-institution|electricity-shortages|energy|energyintensive-projects|forest-products|manufacturing|nuclear-industry-term|products|renewableenergy-systems|steel|steel-fabrication|systems|fifa|cogeneration-person|fabrication|geoffrey-qhena|gert-gouws|infrastructure|power|cable-product|fifa-world-cup|broadband
© Reuse this The State-owed Industrial Development Corporation (IDC) plans to approve at least R60-billion worth of investments over the next five years to 2012/13, which would be a material scale-up from the R26-billion it has approved in the previous five years.

CEO Geoffrey Qhena, speaking at the group’s 2007/8 financial results presentation on Thursday, also insisted that the company planned to increase the amount of risk it took on in pursuing these investments so as to deepen the IDC’s developmental impact.

The organisation would seek to play a significant role in the development of manufacturing enterprises that could feed into the massive investment programmes of Eskom and Transnet, which together would involve capital expenditure of more than R400-billion over the next five years.

However, new opportunities were also opening up in the production of renewable-energy systems, such as solar panels and solar geysers, as well as in cogeneration. The development finance institution said it stood ready to support South Africa’s cogeneration drive and was considering a number of funding opportunities for bidders to the Eskom programme.

Qhena said it would also continue to look at resource-beneficiation initiatives, but told Engineering News Online that some of these projects, including the $2,7-billion Alcan aluminum smelter, had been affected by the prevailing electricity shortages. He did not have details as to how many of the projects in its pipeline were affected, but said the power crisis would be a constraint for the short- to medium-term for a number of its energy-intensive projects.

The IDC also envisaged playing a role in infrastructure and public private partnerships, including making funding available for Broadband Infraco, a new State-owned enterprise that plans to build a 'super cable' between Cape Town and London ahead of the 2010 FIFA World Cup. The IDC was planning to inject some R500-million into Infraco in the not too distant future.

In addition, it would invest in private hospitals in rural areas and townships, having set aside R500-million for these projects.

Qhena also insisted that it was increasingly aligning its business to government’s industrial policy and would be seeking to support more projects in the four key sectors identified, including automotive, forest products, chemicals and steel fabrication.

IDC TO RAISE DEBT LEVEL TO R18BN
The group would need to triple the debt on its balance sheet from R6-billion to R18-billion in order to help in financing this more robust and expanded project pipeline.

However, CFO Gert Gouws said that it would not be raising this debt on the capital market, but would instead be turning to other development finance institutions, including the African Development Bank, the European Investment Bank, as well as development finance institutions in France and Germany.

The African Development Bank was in the process of doing a due diligence of the IDC, as it was likely to extend between $150-million and $200-million into its South African counterpart.

Additional funds would be released when its 97,5% subsidiary Foskor was listed toward the end of 2009. The IDC currently valued Foskor on its books at R9-billion, but it expected its valuation to climb to more than R18-billion by the time it was listed on the JSE.

The IDC increased its approvals during 2007/8 to a record level of R8,5-billion, but had only been able to disburse a small proportion of that by year-end. Gouws said that this was normal given the long lead times involved in the projects it was supporting.

But he stressed that, while IDC’s balance sheet remained strong, with capital and reserves of more than R75-billion (underpinned by listed and unlisted investments whose value grew from R50-billion to R72-billion as of March 31, 2008), it was also taking on more risk that could affect some of its ratios.

For instance, impairments as a percentage of total financing at cost (excluding the group’s investment into the pebble-bed modular reactor nuclear technology company) had risen from less than 10% in 2006 to over 12% in the last financial year.

“This is in line with our development mandate, which often sees us assuming high levels of risk in the form of equity or mezzanine finance, as compared with our private banking partners,” Gouws explained.


Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Small Business Deputy Minister Elizabeth Thabethe
Updated 27 minutes ago South Africans needed to become more entrepreneurial and create their own jobs, instead of expecting government to create jobs or rely on private-sector employment. “We need to become masters of our own destinies,” Small Business Development Deputy Minister Elizabeth...
Updated 28 minutes ago Plans to increase gross domestic expenditure on research and development (GERD) to 1.5% of gross domestic product by 2019 are yet to be formally adopted, despite the target being incorporated in the draft strategic plan of the Department of Science and Technology...
Updated 38 minutes ago Statistics South Africa (Stats SA) would, in future, focus more strongly on the trends of long-term unemployment in its quarterly labour force surveys (QLFSs), statistician-general Pali Lehola said on Thursday. Releasing the QLFS for the three months ended September...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
Integrated energy and chemical company Sasol has partnered with Unisa Graduate School of Business Leadership (SBL) professor and founder and CEO of PanAvest Partnership Dr Douglas Boateng to publish a series of books on executive supply chain management aimed at...
MORNÉ DU PLESSIS Increased urgency and burgeoning awareness of the importance of these issues are beginning to change political risks and, thus, State responses to environmental concerns
The World Wide Fund for Nature’s (WWF’s) 2014 Living Planet Index (LPI) indicates that there has been a 52% decline in vertebrate species since 1970. The Index tracked the trends of 10 000 discrete populations of over 3000 vertebrate species between 1970 and 2010.
Rwanda has joined a number of East African countries seeking to import electricity from Ethiopia as its demand grows. After it became apparent several generation project it is implementing will not come on stream early enough, now plans to import 400 MW from Ethiopia...
Metrorail’s first new passenger train will arrive in November next year, says Passenger Rail Agency of South Africa (PRASA) CEO Lucky Montana. “Next year we will be able to put our hands around the infrastructure and equipment we have been talking about for so long.”
The Competition Commission has launched an investigation into what it says are “price fixing, market division and collusive tendering in the market for the manufacture and supply of automotive components to original equipment manufacturers” (OEMs, or vehicle...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks