South Africa - Line of Credit to the Industrial Development Corporation of South Africa


Project Summary

Approval Date 19 May 2010
Signature Date 26 May 2011
Sovereign / Non-Sovereign Non Sovereign
Sector Finance
DAC Sector Code 24030
Commitment U.A 146,162,503.47
Status Implementation

Project General Description

The project is a USD 200 million LoC to provide long-term funding to the Industrial Development Corporation of South Africa (IDC) to finance projects outside of South Africa. The line of credit is in line with the South African Government's strategy to promote the industrial sector in particular, and to assume economic development in general. IDC will use the proceeds of the LoC to on-lend to projects in its current lending pipeline or new projects that may arise in the near future. IDC’s role as a financier of development projects across Africa is growing and is an integral part of its strategy. Typically, IDC will provide loans on a long-term basis, particularly in the case of infrastructure, often with an initial grace period and priced with a project-specific, risk-based lending margin over the reference index (i.e., LIBOR or EURIBOR). The pipeline of projects to be supported by the LoC is composed exclusively of projects in low income countries (LICs) and fragile states. This LoC will not be used for loans to small-and medium-sized enterprises (SMEs). Although the Bank’s previous LoCs provided funds for SME finance, IDC’s SME activity is concentrated in South Africa and also funded in ZAR.

Project Objectives

The LoC is designed to support IDC’s strategy to develop its financing activities outside South Africa. It will be used to finance long-term projects in the areas of infrastructure, agriculture or other development sectors in low-income and fragile countries. The ultimate goal of these projects will be to build productive capacity and accelerate growth on the continent.

Beneficiaries

The LoC will target small and medium-sized industrial enterprises whose assets do not exceed R 120 million in total (approximately UA 14 million), and individual loans total R $ 65 million (around UA 7 million). Operations cover the entire industrial sector, including manufacturing companies (large and small), agro-industries, mining and energy, chemicals, textiles, the wood and paper industry, metal base and tourism.

Participating Organization

Funding
African Development Bank

Information

IATI identifier 46002-P-ZA-HA0-003
Last Update 31 Oct 2019

Export

Contact Details

Email private-sector@afdb.org

Geographic Location

Country South Africa
Coordinates Location Name
-26.1 28.0667 Sandton