1. AGENCY DEVELOPMENT AND SUPPORT (ADS) DEPARTMENT IDC SUPPORTING LOCAL ECONOMIC DEVELOPMENT

2. PRESENTATION OUTLINE Key ‘mistakes’ made by municipalities when applying for funding Good practices for funding proposals Tips on how to improve proposals and packaging of their projects New ADS Initiatives Social Enterprise Fund Spatial Intervention Fund 3 rd Party Funds Inclusive Business

3. CHALLENGES FACED BY MUNICIPALITIES : Lack of engagement with the private sector especially chambers of commerce and industry in the areas in which municipalities/development agencies operate Political interference and influence in the functioning and operation of municipalities/development agencies and tensions within the parent municipality as to where development priorities lie Lack of skilled staff and resource constraints within municipalities/agencies. Financial uncertainty and medium/long term viability leads to staff uncertainty about their future which leads to lack of continuity.

4. CATALYTIC PROJECTS: catalytic projects often take time to develop, plan and implement and, even once launched and implemented, these projects take further time to mature. It is only in the implementation and maturity phases of a catalytic project that the full impact of development initiatives will be visible in terms of job creation and economic spin-off.

5. 5 Operational model Agro-Industries Mining & Beneficiation Chemicals & Allied Industries Metals, Transport & Machinery Products Textiles & Clothing Forestry & Wood Tourism Media & Motion Pictures Techno Industries Healthcare Green Industries ICT Strategic High Impact Projects Venture Capital Equity Mezzanine debt/quasi equity Commercial debt Guarantees Trade finance Bridging finance Share warehousing Special funding schemes Business support products Project feasibility funding Venture Capital Sector specialization through Strategic Business Units (SBUs) … Sector specialization through Strategic Business Units (SBUs) … … flexible application of a large variety of financial products … flexible application of a large variety of financial products … utilising two business channels… Industrial Finance Project development

6. 6 Special IDC Schemes - generic Gro-E Scheme R10 billion available for 5 years Loans @ Prime - 3% for the first 5 years Equity @ 5% RATIRR Capital and interest payment holidays as per financial needs of the business Minimum = R1 million & Maximum of R1 billion per project Business must have prospects of acceptable profitability to service its obligations Cost per job created should not exceed R450 000 B-BBEE certification from an accredited verification agency is required R10 billion available for 5 years Loans @ Prime - 3% for the first 5 years Equity @ 5% RATIRR Capital and interest payment holidays as per financial needs of the business Minimum = R1 million & Maximum of R1 billion per project Business must have prospects of acceptable profitability to service its obligations Cost per job created should not exceed R450 000 B-BBEE certification from an accredited verification agency is required R2 billion, 5-year, listed private placement bond Cost per job up to R450 000 will be eligible Pricing @ 6.0% fixed; Extent of discount is based on the risk and developmental impact Maximum = R100m Only senior debt instruments Client is required to drawdown within 7 months after approval R2 billion, 5-year, listed private placement bond Cost per job up to R450 000 will be eligible Pricing @ 6.0% fixed; Extent of discount is based on the risk and developmental impact Maximum = R100m Only senior debt instruments Client is required to drawdown within 7 months after approval Women Entrepreneurial Fund (R400 million) People with Disabilities Fund (R50 million) Development Fund (R250 million) Equity Contribution Fund (R150 million) Community Fund (R150 million) Women Entrepreneurial Fund (R400 million) People with Disabilities Fund (R50 million) Development Fund (R250 million) Equity Contribution Fund (R150 million) Community Fund (R150 million) UIF Job Creation Fund UIF Job Creation Fund Transformation and Entrepreneurial Scheme (TES) Distressed Funding Distressed Funding R6bn made available for companies negatively affected by the recent international financial crisis

7. CORE STRATEGIES/NEW INITIATIVES Social Enterprise Fund : -The fund aims to provide grant funding to establish (start-up) and develop (grow, replicate, scale) social enterprises and entrepreneurs; Spatial Intervention Fund : -The fund aims to promote, facilitate and implement economic development in a specific area, to address spatial disparities, harness job creation opportunities and bring about meaningful change. Inclusive Business 3 rd Party Funding

8. Day Month Year The Industrial Development Corporation 19 Fredman Drive, Sandown PO Box 784055, Sandton, 2146 South Africa Telephone (011) 269 3000 Facsimile (011) 269 2116 E-mail callcentre@idc.co.za THANK YOU Ornet Nene Agency Development & Support (ADS) Tel: 011 269 3863 Fax: 086 210 3863 E-mail: ornetn@idc.co.zaornetn@idc.co.za Website: www.idc.co.za