The Industrial Development Corporation (IDC), South Africa’s development finance institution which funds entrepreneurs and projects in the industrial sector, also seeks to use investments in infrastructure to free up industrial development opportunities. This was highlighted by IDC divisional executive: agriculture, infrastructure and new industries Lizeka Matshekga at the recent Sixth Council for Scientific and Industrial Research Conference, in Pretoria.
In her presentation, she said: “The IDC is committed to unlocking industrial development opportunities through infrastructure investments and innovation in South Africa. We call on all relevant stakeholders to partner with us in these efforts.” Regarding infrastructure, the corporation focuses mainly on energy, logistics (mainly by means of public–private partnerships, or PPPs), telecommunications and water (also largely through PPPs).
In the field of energy, the IDC is willing to support “conventional” power sources (defined as coal, gas and nuclear), renewables (biogas, biomass, hydro, solar, and wind) and “nonconventional” sources (cogeneration, geothermal, hydrogen and fuel cells, waste-to-energy and wave power). Further, it will support electricity transmission and distribution lines and energy storage systems (except for batteries and oil), as well as energy efficiency projects, whether on-grid or off-grid, including the installation and monitoring of demand-side management systems such as load-limiting and load-shifting systems.
Logistics projects that the corporation is interested in funding include railways, roads, ropeways, shared storage infrastructure, industrial hubs and terminals. With regard to maritime infrastructure, this would include cargo and shipping, marine storage, offshore facilities, ports and terminals, and waterways. In the realm of air transport, the IDC is interested in airport, air cargo and air terminal projects.
With telecommunications, the focus is on broadband infrastructure. This includes fibre networks, wireless networks, open access and shared infrastructure and transmission equipment.
In the water sector, the focus is on storage, transport, treatment and bulk services. Storage covers dams and reservoirs, transport covers pipelines, and treatment refers to the production of fresh water, desalination and the handling of waste water. Bulk services means irrigation schemes and pumpstations.
Matshekga cited some examples of the IDC’s financial support for innovative infrastructure projects. Thus, there is the Kuka Aerial Ropeway, currently in the implementation stage. Located at Steelpoort, in Mpumalanga, it benefited from a R174-million commitment by the corporation and will carry 100 000 t/m of chrome ore from the GlencorXstrata Thorncliffe mine to the smelter. Previously, this ore was transported by truck.
The IDC has also been supporting the local development of hydrogen fuel cells and funded the country’s first commercial fuel cell project in 2015. Fuel cells are seen by the funder as a new sector with high potential that should be proactivity developed. The corporation is also, with partners, involved in the development of demonstration and pilot energy storage technologies and systems, intended to support the renewables sector. It is also seeking to facilitate the adoption of more-efficient irrigation systems for agriculture and assist the city of Cape Town, currently in a freshwater supply crisis, by helping to fund desalination plant design, development, construction and operation projects.
The IDC was set up in 1940 and is wholly owned by the South African government. As of the end of March, the IDC had assets totalling R129.8-billion, while its liabilities came to R41.5-billion. It describes itself as providing “[c]ustom financial products above R1-million to suit [a] project’s needs, including debt, equity, guarantees or a combination of these”. It can be involved in the identification of projects, the determination of their feasibility, their development, commercialisation, expansion and modernisation. It operates across Africa as well as in South Africa, with its head office in Johannesburg (as well as 20 regional and satellite offices) and, at the end of last year, had a staff of 850.
It has a number of focus sectors. These are the metals value chain (mining and basic metals, equipment and machinery, automotive and transport equipment), the chemicals value chain (basic chemicals, speciality chemicals, chemical products and pharmaceuticals), the agriculture value chain (agriculture and agriprocessing), as well as ‘high-impact sectors’ (heavy manufacturing, light manufacturing and tourism) and ‘special high-impact sectors’ (textiles and clothing, media and film), as well as enablers (new industries and industrial infrastructure). The IDC says: “Value chains are earmarked for special attention, including proactive project development, whilst high-impact sectors are exclusively reactive.”