5 September 2003
The Industrial Development Corporation (IDC) this week signed a US$125-million loan agreement with international commercial banks to enable it to meet its funding commitments.
The money is meant for general corporate funding requirements, IDC chief financial officer Gert Gouws said.
The IDC is a self-financing, government-owned development finance institution which aims to contribute to the economic empowerment of South Africans and the generation of balanced, sustainable economic growth in Africa.
The IDC achieves this by providing risk capital to entrepreneurs investing in economically viable projects through a variety of products, including loans to industrialists, equity investments and trade finance.
One of the corporation’s core strategies is to maintain its financial independence from the government, as a result of which it has to access capital markets to source loan funding.
According to Gouws, increasing investor confidence in South Africa, coupled with the IDC’s sovereign rating, will allow the corporation to source funds at lower rates in the future, thus allowing it to finance its activities more competitively.
About 23 banks from around the world collectively provided the IDC’s latest loan, for repayment over the next three years. The lead arrangers of the loan were Bayerische Landesbank, BNP Paribas, Citibank, Standard Chartered Bank and Sumitomo Mitzui Banking Corporation Europe Limited.
IDC CEO Khaya Ngqula told representatives of these banking institutions that the money would be put to good use, adding that the IDC appreciated the role they played in the country’s economy.
“We see this as an affirmation of faith which we all have in South Africa. Furthermore, we feel that this will only help us to continue doing what we know best, that is, invest in supporting South Africans and empowering our communities.”