From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Tue Jul 07 2009 - 04:58:29 EDT
IDC invests R800 million in Eritrea's mining sector and plans to invest
R15bn in Africa
Jul 6th, 2009 . <http://www.EastAFRO.com/Post/category/featured> Featured,
<http://www.EastAFRO.com/Post/category/news> News
IDC plans to invest R15bn in rest of Africa over five years
July 6, 2009
Business Report
<http://www.busrep.co.za/index.php?fArticleId=5068420&fSectionId=552&fSetId=
662>
By Mzwandile Jacks
http://www.EastAFRO.com/Post/wp-content/themes/themefolder/images/GoldImage4
00x200.jpg
The Industrial Development Corporation (IDC) had set aside R15 billion to
invest in new and existing projects in the rest of the continent over the
next five years, the state-owned financier said at the weekend.
Gert Gouws, the IDC's chief financial officer, told Business Report this was
part of its mandate, which stated that it must invest in Africa and increase
developmental returns from identified countries.
"These investments will not only benefit those countries but will also
benefit South Africa, (because) we will be using South Africa's goods and
services in those projects.
"We are looking for opportunities not only in sub-Saharan Africa, but also
in north Africa," Gouws said.
The IDC had invested R2.9bn in Africa in the past financial year, but the
budget would be cut by nearly half this year to R1.5bn because the
development financier had to allocate R6.1bn for local firms that were hit
by the recession.
According to the IDC's website, it extended its reach beyond South Africa to
the Southern African Development Community in 1998 and to the rest of Africa
in 2002.
It saw the need to invest in the continent because South Africa's prosperity
was inextricably linked to Africa's economic development.
Africa represented enormous market potential and untapped resources, and was
projected to be one of the last bastions of economic growth.
The company invests in projects ranging from mining and mineral
beneficiation to agro-processing, infrastructure development and tourism.
In the past financial year, the IDC made its first investment in Eritrea:
R800 million in the mining sector. The project will produce gold, silver,
copper and zinc over its 10-year life span.
This will create 400 direct job opportunities and lift government revenue by
7 percent a year over the life of the mine.
It is expected to serve as a catalyst to develop Eritrea's mining industry.
The IDC has approved funding of R100m for a project in Mali to manufacture
chipboard from rice straw.
It has invested R166m in Botswana to establish a plastic pipe manufacturing
plant.
In Uganda it has invested R75m in a project to upgrade infrastructure,
including the development of a ferry and the upgrading of roads, water and
power supplies; and R783m in a telecoms satellite aimed at improving the
quality of Uganda's telecoms service.
Gouws said the IDC had also invested in a number of smaller projects.
One analyst, who did not want to be named because he did not cover the IDC,
said the parastatal could be moving aggressively into Africa because there
were fewer opportunities in South Africa.
Gouws disagreed. South Africa remained the IDC's primary investment
destination.
"We cannot neglect South Africa, because it is our backyard. This is why we
have now opened IDC offices in all nine provinces," he said. "And we are
currently conducting due diligence in these provinces."
Geoffrey Qhena, the chief executive of the IDC, said the opening of these
offices had improved co-operation with local business communities.
This would increase proactive identification of development projects and
access to clients. These offices would be a conduit for business support.
According to the IDC, in the current financial year an additional 13 000
jobs are expected to be retained through the funding of distressed
companies.
At the group's annual results on Thursday, Qhena said the IDC was busy with
the first batch of money to help firms affected by the domestic economic
slowdown.
He said that in keeping with its long-term strategy, the emphasis was on
funding interventions to help preserve jobs.
The IDC said it would fund distressed companies to ensure their long-term
sustainability. Interventions would be "on a firm-by-firm" basis.
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