!Khi Solar One

Once completed, this concentrated solar tower power station will be one of the largest in the world. One of the benefits of this project relative to most other renewable energy projects is its ability to store energy and to deliver electricity to the grid during peak times.

Risk profile of IDC’s book

Concentration risk


Although IDC has recently made substantial investments in the green economy space, sector concentration remains one of the key strategic priorities of the Corporation. Exposure to the mining industry is at 30% and the top 10 business partners represent 62% of the IDC’s portfolio at market value.

A positive trend in the journey towards portfolio diversification is the increasing share of the manufacturing sectors’ portion of the book. It currently amounts for 44% of the total portfolio compared to 38% five years ago. The main driver of portfolio diversification is the annual Board-approved capital allocation process, allocating capital amongst different SBUs over a five-year period. Additional safeguards against such concentration include the sector and counterparty limits guidelines and the monitoring of IDC’s portfolio by the Corporate Strategy and Portfolio Management Department.


Although commodity (resource-based) concentration of the IDC book is still evident, some progress has been made towards diversification as indicated by the growth of non-resource-based sectors’ share over recent years.

The resource–based portion of the portfolio keeps growing in absolute terms, but in relative terms it continues to decline (from 82% in 2007 to 70% in 2013), due to the rapid growth in non-resource-based investments (see accompanying graph). It still constitutes the largest portion of the book at two-thirds. The continued diversification of the portfolio is driven by the Green industries, ICT, Metals and SHIP business units.

Financial product

As at financial year-end (31 March 2013), the total market value of the IDC portfolio (including commitments) had increased by 3% to R144 billion from the prior year level of R140 billion, mainly due to a number of large transactions approved in the Green industries, Mining and Metals SBUs.

The book at market value is dominated by equity (both listed and unlisted), representing 72% of the portfolio, with the remainder attributable to loans (27%) with a small portion of guarantees.

The nature of the IDC’s mandate as a DFI often necessitates the financing of start-ups or market segments that are not funded by commercial financial institutions. Such funding represents equity instead of loan funding. Businesses that are in the early stage of their business lifecycle (e.g. conceptual or pre-feasibility) might be unable to provide sufficient security to obtain loan funding. In such instances, for example, IDC will acquire an equity stake. Large projects are also often funded through a combination of equity and loan funding, with the equity portion often exceeding the loans portion.


Regional diversification of the IDC book is progressing well. It was especially evident over the past two years, with major growth in the IDC’s involvement in South Africa’s less developed provinces (except Gauteng and Western Cape) in terms of both value and number of investments, though there is still room for further improvement.

The regional diversification over recent years was primarily due to some large investments in the green and mining sectors in rural areas. Diversification has also been assisted through the efforts of our regional offices.

Investment in the rest of the continent is primarily driven by the Corporation’s ‘Rest of Africa Engagement Strategy’ and managed through our investment criteria and regional investment limits, as well as country boundaries.

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.

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