- In one of key developments from the BRICS summit which kicked off in Johannesburg yesterday, South African development funder, the Industrial Development Corporation (IDC) and the Bank of China (BoC) have signed a Framework Agreement aimed at strengthening regional trade and investment.
- As part of the agreement, the IDC and BoC are in the process of concluding a R10bn funding package over the next five years.
- Capital support arising out of this agreement will go into development and funding tangible projects spread across, energy, infrastructure, manufacturing, agriculture, and mining sectors.
Citing the lack of access to capital as one of the impediments to accelerating regional industrial development, IDC CEO TP Nchocho was optimistic about regional economic prospects in the wake of this agreement.
“Our helicopter view as one of the leading development funding institutions in sub-Saharan Africa has informed us that lack of access to capital remains one of the biggest challenges affecting entrepreneurs across the continent. This framework agreement therefore will bring to fruition capital mobilisation and technology cooperation among other benefits which should ultimately lead to integration of regional economic and industrial development across the continent,.” said IDC CEO TP Nchocho.
Other objectives of the agreement include:
- Exploring opportunities to enhance the cooperation between each other to co-fund potential future business with the BOC JHB acting on the debt financing side.
- Potential areas of business collaboration shall include but are not limited to, China/Africa investment projects in mining, agriculture, telecommunication and infrastructure development.
- BOC’s Johannesburg office shall endeavour to provide no less than R10 billion or other equivalent currency loan funding to joint investments in the next 5 (five) years.
This framework agreement is similar to pacts that the IDC has signed with other cooperating international in the continent towards long-term cooperation and co-funding initiatives. The agreement’s other objective will serve to formalise the relationship between the IDC and BoC and strengthen the cooperation between the two entities on funding initiatives, especially Chinese foreign direct investment (FDI) into South Africa.
As part of its growing role in South Africa, BOC CEO, Dr Longjian Chen chairs the South Africa and China Economic and Trade Association (SACETA) – a factor that positions BOC to play a key role in helping strengthen South Africa’s economic and industrial development.
Said Dr Chen, “Since the establishment of BOC Johannesburg branch almost 23 years ago, BOC values amongst other things social welfare and economic development and has insisted on serving Africa – China economic and trade cooperation. This Framework Agreement highlights BOC’s resolution in partnering with South Africa in Sustainability, JUST Energy Transformation and other funding initiatives.
Author: Bryan Groenendaal
About the IDC
The Industrial Development Corporation (IDC) of South Africa Limited was established in 1940 through an Act of Parliament (Industrial Development Corporation Act, 22 of 1940) and is fully owned by the South African Government.
IDC priorities are aligned with the national policy direction as set out in the National Development Plan (NDP), Industrial Policy Action Plan (IPAP) and industry Master Plans. Our mandate is to maximise our development impact through job-rich industrialisation, while contributing to an inclusive economy by, among others, funding black-owned and empowered companies, black industrialists, women, and youth-owned and empowered enterprises.
Simultaneously, the IDC must ensure its long-term sustainability through prudent financial and human resource management, safeguard the natural environment, and increasingly position itself as a Centre of Excellence for development finance.
