Mitigating key risks

Key risks Alignment to strategic objectives Link to material issues Mitigating controls Further detail
The risk of the IDC being over dependant or reliant on a limited number of counterparties or financial products Sustainability: Financial Capital Continue to be a financially sustainable organisation
  • Clear ownership of the “top 5” equity investments within the Corporate Strategy and Portfolio Management Department
  • Risk Appetite Analysis and reporting
  • Scenario stress analysis to Exco and Board strategy sessions
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The risk of macro-economic conditions impacting the IDC’s business Sustainability: Financial Capital Economic factors
  • Management analysis of economic, political, industrial, legal and other economic events and reporting each potential implication to the Board
  • Regular scenario analysis (exchange rate, interest rate, economic growth) undertaken and presented to the Board
  • Credit policies incorporate early warning mechanisms
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The risk of margin erosion or income opportunity loss due to inappropriate or incorrect pricing Sustainability: Financial Capital Continue to be a financially sustainable organisation
  • Pricing Policy for debt, equity and guarantees
  • Breakage fee on issuance of term sheet
  • Cancellation fee on approved transactions
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Sustainability/successful implementation of projects Increasing Industrial Development Impact Continue to be a financially sustainable organisation
  • Regular operational reports to the Board
  • Team approach to due diligence including peer review
  • Representation on project steering committees
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The risk that an action or inaction by IDC damages the organisation’s reputation Sustainability: Human, Social, Natural and Manufactured Capital Increased stakeholder engagement to communicate plans successes, and foster co-operation between role players
  • The IDC engages a public relations agency for strategic communication
  • Communications Department is responsible for co-ordination of all external communications
  • Crisis communications procedure
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The risk of negative sector specific trends Increasing Industrial Development Impact Economic factors
  • Sector Limits Policy
  • Explicit Board approval required to waive sector limits per transaction
  • Research and Information Department sector reports
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Inadequate operational and financial performance of sefa (capacity, resources, reputation, delivery) Increasing Industrial Development Impact Continue to be financially sustainable organisation
  • Ongoing capacity building assistance to sefa
  • IDC appoints CEO of sefa
  • Secondment of IDC personnel into sefa
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Rationalisation/consolidation of state-owned companies Sustainability: Financial Capital Maintain good governance including risk assessment and fraud prevention processes
  • Ongoing Board engagement with Minister
  • IDC participates in review
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Financial, environmental and social performance impacting on IDC’s performance Sustainability: Financial Capital Continue to be a financially sustainable organisation
  • Monitoring by Board representation
  • Monitoring by Post Investment Monitoring Department
  • Strategic vs non-strategic investment monitoring
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CASE STUDY

Platmin

This regionally optimised mega mine will lead to the creation of an operation of significant size, allowing for mining of the ore body in a continuous and sustainable manner.

Coega Dairy Holdings

The IDC has identified increased competition in the dairy value chain and import substitution in the cheese industry as key sector development goals. We also singled out the need for increased farmer (and specifically B-BBEE) participation in dairy value-adding initiatives.

Windtown Lagoon Resort 

The newly built Windtown Lagoon Resort and Spa reflects the IDC’s focus to funding community-based projects that have potential to create employment opportunities in far-flung regions.


APPROVALS
R13.1 billion
DISBURSEMENTS
R16.0 billion
JOBS FACILITATED
18 922
JOBS SAVED
3 950
© The IDC 2013. All rights not expressly allowed are reserved. P.O. Box 784055, Sandton, 2146, South Africa