AGENCY DEVELOPMENT AND SUPPORT (ADS) DEPARTMENT

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AGENCY DEVELOPMENT AND SUPPORT (ADS)
DEPARTMENT
IDC SUPPORTING LOCAL ECONOMIC DEVELOPMENT

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PRESENTATION OUTLINE

• Key mistakes made by municipalities  when
  applying for funding
• Good practices for funding proposals
• Tips on how to improve proposals and packaging of
  their projects
• New ADS Initiatives
• Social Enterprise Fund
• Spatial Intervention Fund
• 3rd Party Funds
• Inclusive Business

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CHALLENGES FACED BY MUNICIPALITIES

• Lack of engagement with the private sector 
  especially chambers of commerce and industry in
  the areas in which municipalities/development
  agencies operate
• Political interference and influence in the
  functioning and operation of municipalities/develo
  pment agencies and tensions within the parent
  municipality as to where development priorities
  lie
• Lack of skilled staff and resource constraints
  within municipalities/agencies .
• Financial uncertainty and medium/long term
  viability leads to staff uncertainty about their
  future which leads to lack of continuity.

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CATALYTIC PROJECTS

• catalytic projects often take time to develop,
  plan and implement and, even once launched and
  implemented, these projects take further time to
  mature. It is only in the implementation and
  maturity phases of a catalytic project that the
  full impact of development initiatives will be
  visible in terms of job creation and economic
  spin-off.

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Operational model
Sector specialization through Strategic Business
Units (SBUs)
flexible application of a large variety of
financial products

• Agro-Industries
• Mining Beneficiation
• Chemicals Allied Industries
• Metals, Transport Machinery Products
• Textiles Clothing
• Forestry Wood
• Tourism
• Media Motion Pictures
• Techno Industries
• Healthcare
• Green Industries
• ICT
• Strategic High Impact Projects
• Venture Capital

• Equity
• Mezzanine debt/quasi equity
• Commercial debt
• Guarantees
• Trade finance
• Bridging finance
• Share warehousing
• Special funding schemes
• Business support products
• Project feasibility funding
• Venture Capital

utilising two business channels

• Industrial Finance
• Project development

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Special IDC Schemes - generic
Transformation and Entrepreneurial Scheme (TES)
UIF Job Creation Fund
Gro-E Scheme

• Women Entrepreneurial Fund (R400 million)
• People with Disabilities Fund (R50 million)
• Development Fund (R250 million)
• Equity Contribution Fund (R150 million)
• Community Fund (R150 million)

• R10 billion available for 5 years
• Loans _at_ Prime - 3 for the first 5 years
• Equity _at_ 5 RATIRR
• Capital and interest payment holidays as per
  financial needs of the business
• Minimum R1 million Maximum of R1 billion per
  project
• Business must have prospects of acceptable
  profitability to service its obligations
• Cost per job created should not exceed R450 000
• B-BBEE certification from an accredited
  verification agency is required

• R2 billion, 5-year, listed private placement bond
• Cost per job up to R450 000 will be eligible
• Pricing _at_ 6.0 fixed
• Extent of discount is based on the risk and
  developmental impact
• Maximum R100m
• Only senior debt instruments
• Client is required to drawdown within 7 months
  after approval

Distressed Funding

• R6bn made available for companies negatively
  affected by the recent international financial
  crisis

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CORE STRATEGIES/NEW INITIATIVES

• Social Enterprise Fund
• The fund aims to provide grant funding to
  establish (start-up) and develop (grow,
  replicate, scale) social enterprises and
  entrepreneurs
• Spatial Intervention Fund
• The fund aims to promote, facilitate and
  implement economic development in a specific
  area, to address spatial disparities, harness job
  creation opportunities and bring about meaningful
  change.
• Inclusive Business
• 3rd Party Funding

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Day Month Year
The Industrial Development Corporation 19 Fredman
Drive, Sandown PO Box 784055, Sandton, 2146 South
Africa Telephone [phone] Facsimile (011)
269 2116 E-mail callcentre_at_idc.co.za
THANK YOU
Ornet Nene Agency Development Support
(ADS) Tel [phone] Fax [phone] E-mail
ornetn_at_idc.co.za Website www.idc.co.za