01 Feb KfW Development Bank signs USD 80 million loan facility with Industrial Development Corporation
Johannesburg, 31st January 2019 – KfW (the German Development Bank) and the Industrial Development Corporation of South Africa Limited (IDC) have celebrated yet another milestone. This follows an agreement signed by the two entities in November 2018 during which KfW committed to provide the IDC with a USD 80 million loan facility.
The facility since named the South African facility for Green Growth (SAFGG) will enable local entities to access funding so they can invest in the Green Economy – the result of which will help to mitigate the impact of CO2 emissions. In addition, this facility is earmarked to benefit projects that will have a beneficial impact on environmental protection and resource efficiency, e. g. water resource protection and conservation.
Speaking at its annual reception in Pretoria, South Africa, KfW representative Dr. Stefan Peiß commended the IDC for its role in providing funding to smaller and mid-size companies that were harnessing opportunities in the Green Economy.
While financial needs of large commercial enterprises were generally well catered for by the private sector, Dr. Peiß, argued that the smaller yet innovative entrepreneurs in the Green Economy experienced many challenges, ranging from difficulties in accessing markets, poor infrastructure, and little or no physical assets that could be used as collateral for accessing financing.
To which the newly appointed IDC Chief Executive Officer Mr TP Nchocho agreed, adding that that the loan facility from KfW will significantly boost the IDC’s objectives of increasing its investment in renewable energy initiatives and infrastructure related projects.
“We are therefore grateful to KfW for its continued support to IDC. For us, this relationship demonstrates the level of confidence that KfW has in our organization. But most important, KfW’s support has largely helped us to meet our developmental mandate especially regarding supporting growth of local SMMEs operating in various sectors of the economy including, agriculture, light manufacturing and tourism,” said Nchocho.
Jan Martin Witte, a KfW director based in Pretoria further lauded the German Development Bank’s relationship with the IDC saying it was mutually beneficial.
Citing challenges most prevalent in the infrastructure space, Nchocho said the IDC would utilise this facility towards addressing the infrastructure backlog. He said that some parts of South Africa were experiencing water shortages – a factor he attributed to ageing infrastructure or lack of.
“The challenge with such a situation is that it has a direct impact on food security especially if our dams can’t provide sufficient water to farmers in times of drought,” said Nchocho.