IDC posts R20.7bn funding approvals in 2022/23

The Industrial Development Corporation (IDC) of South Africa has remained resilient in the face of challenging macroeconomic conditions, widespread electricity disruptions, and poor infrastructure delivery in the country. Despite these obstacles, the IDC has made significant strides in funding approvals and disbursements for the 2022/23 financial year. CEO TP Nchoncho recently discussed the corporation's performance and future plans with CNBC Africa, shedding light on the key sectors driving their investments and the outlook for economic development in the country. One of the standout achievements for the IDC in the past year was the approval of R20.7 billion in on-balance sheet financing, with R17.8 billion disbursed to various sectors. The manufacturing sector received a substantial portion of the funding, with over R8.6 billion allocated to support industrial growth and innovation. Additionally, investments in the mining and metal sector played a crucial role, with a significant advance of R3.5 billion to a platinum miner and R1.6 billion to a metals processing company in Mozambique. While the energy sector received less disbursement due to challenges in reaching financial close on renewable energy projects, the IDC remains optimistic about future funding in this domain. Moreover, the IDC's focus on financial sustainability has led to returns on investments aimed at around 13 to 16 percent, surpassing their weighted cost of capital. This robust financial performance has enabled the corporation to maintain a strong asset quality despite elevated non-performing loans resulting from historical exposures. Nchoncho highlighted the importance of managing impairments and NPLs within acceptable limits to safeguard the IDC's balance sheet and capital adequacy. The economic landscape in South Africa has posed challenges for businesses across sectors, including mining, manufacturing, and agriculture. Clients of the IDC have faced difficulties such as disrupted supply chains, logistical constraints, and limited access to international markets. However, Nchoncho noted a sense of resilience among the IDC's customer base, with many clients honoring their debt obligations and delivering returns on their portfolios. This resilience has been crucial in navigating the turbulent economic environment and sustaining business operations. Looking ahead, the IDC remains focused on key sectors that hold promise for economic growth and development in South Africa. The energy transition space, strategic critical minerals essential for energy generation, and the manufacturing sector are areas of priority for future investments. The IDC aims to leverage opportunities in green energy, mineral resources, and manufacturing innovation to drive sustainable economic growth and create employment opportunities. In conclusion, the IDC's commitment to driving economic development in South Africa remains unwavering despite the challenges posed by the current economic climate. With a strategic focus on key sectors and prudent financial management, the corporation is poised to support businesses, create jobs, and foster innovation in the country. As South Africa navigates through turbulent times, the IDC stands as a beacon of hope for sustainable economic progress and development.