IDC Funding for Industrial Development & Economic Empowerment

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The Industrial Development Corporation (IDC) was established in 1940 and is a self-financing, self-sustaining, state-owned national development finance institution. The primary objectives of IDC Funding are to contribute to the generation of balanced, sustainable economic growth in Africa and to the economic empowerment of the South African population, thereby promoting the economic prosperity of all citizens.

The IDC achieves this by promoting entrepreneurship through the building of competitive industries and enterprises based on sound business principles. Supporting industrial development capacity and promoting entrepreneurship are therefore key objectives of the IDC. The IDC funds start-up and existing businesses up to a maximum of R1 billion.

The Industrial Development Corporation (IDC)

IDC is owned by the South African government under the supervision of the Economic Development Department. The mission of the Industrial Development Corporation is to contribute to the creation of balanced, sustainable economic growth in South Africa and on the rest of the continent, and to promote entrepreneurship through the building of competitive industries and enterprises based on sound business principles.

IDC’s primary outcome is to facilitate sustainable direct and indirect employment. Its secondary outcomes are to: improve regional equity, including the development of South Africa’s rural areas, poorer provinces, and industrialisation in the rest of Africa; promote entrepreneurial development and grow the Small and Medium Enterprise (SME) sector; advance environmentally sustainable growth; grow sector diversity and increase localised production; and support the transformation of communities and development of black industrialists.

The IDC’s funding is generated through income from loan and equity investments and exits from mature investments, as well as borrowings from commercial banks, development finance institutions (DFIs) and other lenders. The IDC remains committed to promoting environmentally sustainable growth and increasing sectoral diversity to boost the local production of goods.

IDC Funding

Industries and Sectors that will be funded by the The Industrial Development Corporation

In line with the government’s New Growth Path and Industrial Policy Action Plan (IPAP2), businesses in the following sectors will be considered for funding:

  1. Green Industry
  • Renewable energy;
  • Energy efficiency;
  • Pollution mitigation;
  • Waste management and recycling; and
  • Biofuels.
  1. Agricultural value chain
  • Agro-processing
  1. Manufacturing activities
  • Advanced manufacturing;
  • Automotives, components, medium and heavy commercial vehicles;
  • Clothing, textiles and footwear, and leather;
  • Forestry, paper & pulp, and furniture;
  • Metals fabrication, capital and transport equipment;
  • Pharmaceuticals; and
  • Plastics and chemicals.
  1. Strategic high-impact projects
  • Logistics;
  • Industrial infrastructure; and
  • High-impact cross-sectoral projects.
  1. Mining value chain
  • Downstream mineral beneficiation;
  • Mining; and
  • Mining technologies.
  1. Tourism and high-level services
  • Business process services; and
  • Tourism.
  1. Media and motion pictures
  • Media pictures production;
  • Media value chain – broadcasting (radio and television);
  • Media expansion – including new media;
  • Music value chain; and
  • Film production and animation.
  1. Knowledge economy
  • Healthcare;
  • ICT; and
  • Biotechnology.
  1. Business sector
  • The IDC will also assist businesses with capacity building, where needed; and
  • Businesses are encouraged to consider this support, which is partially grant funding.

Qualifying Criteria for IDC Funding

  • Start-up businesses, including funding for buildings, machinery and working capital;
  • Existing businesses for expansionary purposes;
  • Over 50% ownership by persons under 35 years of age;
  • Businesses that demonstrate economic merit and have prospects of acceptable profitability to be able to service their obligation;
  • For the duration of the funding period, businesses whose maximum cost per job does not exceed R500 000 relative to the total funding required;
  • Broad-Based Black Economic Empowerment certification from an accredited verification agency, where applicable;
  • Businesses operating or expanding in South Africa;
  • The funding period will be structured to meet the cash flow needs of the business; and
  • Appropriate capital and interest payment holidays will be applied depending on the financial needs of the business; and there is no prescribed minimum for owner contribution.

At Dream Team Capital, we understand the complexities of the various funding agencies and the unique application criteria for each. We have assisted thousands of entrepreneurs through the application process to access funding for businesses, and we can assist you with the same.

Contact us for more information and assistance on IDC Funding.