The Critical Infrastructure Grant
The Critical Infrastructure Grant stimulates investment growth in line with the National Industrial Policy Framework (NIPF) and Industrial Policy Action Plan (IPAP). The CIP is a cost-sharing incentive that is available to the approved applicant/s or infrastructure project/s upon the completion of verifiable milestones or as may be approved by the Adjudication Committee. Infrastructure is deemed “critical” to the investment if such investment would not take place without the said infrastructure or the said investment would not operate optimally. When you need to invest in infrastructure in order to make further productive investment possible, you are eligible for a grant in respect of that infrastructure cost. For a comprehensive Critical Infrastructure Grant Business Plan… do not hesitate to contact DTC.
Infrastructure, in this case, refers to those installations without which the new project cannot be undertaken, such as paved roads and bulk water. Also, when you need to make an investment in order to sustain an existing operation, e.g. invest in Solar and Green Energy, you will be eligible for support in respect of such investment cost.
Note that production equipment, vehicles and buildings do not qualify. It is a requirement that the public must benefit from the infrastructure in question. The BEE requirement was relaxed late in 2016 to a minimum Level 8.
A business plan is the most essential element of the early planning stage of your business. DTC can assist with the Critical Infrastructure Grant business plan. Our developments are often used to create a vision for businesses, secure funding, secure non-repayable business grants, attract team members and/or manage the company.
Core elements of a comprehensive Critical Infrastructure Grant Business Plan are:
•Legal entity: Your business plan should include copies of all registration documents, the income tax, and VAT certificates of the business entity.
•Shareholders and management: Add detailed CV’s of all directors, members, as well as key personnel to motivate that management has the necessary experience to manage the operational, administrative, human resources, marketing and financial aspects of the business. A Broad-Based Black Economic Empowerment (BBBEE) rating and organogram must be included.
•Capital expenditure: Capital expenditure is the money a corporate entity spends to buy, maintain, or improve its fixed assets. The business plan should include copies of recent quotations for land and buildings, equipment and soft assets (computers, etc).
•Development: Provide a copy of the development and cluster layout, as well as, a detailed bill of the infrastructure required, with recent quotations for all material costs. Describe the key staff involved in the development and a transfer of skills plan.
•Staffing: Include the cost to company of all salaried, waged, part-time and contract employees, historical and going forward. Ensure that all salaries and wages are preferably market-related and not below minimum wage guidelines for the industry. Outline your process for identifying and hiring new staff members.
•Marketing analysis: Studies the attractiveness and the dynamics of a special market within a specific industry. It is part of the industry analysis and, in turn, of the global environmental analysis. Through all of these analyses the strengths, weaknesses, opportunities and threats of a company can be identified. Projected turnover levels need to be based on secured contracts, letters of intent, and/or detailed market research. Include copies of these documents and/or write-ups of the research conducted. Draw up and implement a general and specific marketing strategy to articulate how the business will attract market share and achieve projected turnover levels.
Some of the areas that the market research should focus on include-
-Competitors’ analysis;
-Competitive edge of the business;
-Demand and supply;
-Sustainability of the business;
-Future developments (technological, new market entrants, alternate products, etc);
-Contracts with clients;
-Letters of intent from potential clients;
-Other networks and potential relationships that may have been created; and
-Strategic location of the business.
•For acquisitions: Obtain the past three years’ historical financial statements and latest management accounts for the current year. The valuation will be based on the Discounted Cash Flow Method (valuing the operations of the business based on its income-generating potential, based on historical and projected future performance), and not necessarily the value of the assets.
•Financial projections: Include documents comprising of the management account, income statement, balance sheet, cash flow, cash forecast, break even analysis, loan amortisation schedule and fixed asset schedule with ratios, graphs, and calculations.
•Appendix: Include additional documents that provide statutory information, required by funders in an application (contact us for the complete list).
At DTC, we understand the complexities of the various criteria and requirements for an accurate and custom business plan. If using the document to raise funding and/or non-repayable business grants, we guide forward through the process and provide access to our expansive network of funders across South Africa.
For more information and assistance with your CIP Grant Business Plan – Contact us