IDC well geared to take on more funding activities, says CFO Isaac Malevu

The IDC has identified 160 opportunities to invest in, including the commercialisation of hydrogen.

The Industrial Development Corporation (IDC) has reported a R33 million loss for the 2020/21 financial year, largely due to Foskor’s R2.2 billion loss.

However, CFO Isaac Malevu said the group’s financials had strengthened materially during the year, supported by a strong rebound in the value of its listed portfolio to R51.9 billion, from the R23.5 billion reported in March 2020. Impairments and write-offs had also reduced from R7.7 billion to R2.2 billion.

“The improved balance sheet means that IDC is well geared and positioned to take on more funding activities in support of both government and private sector led investment initiatives,” Isaac said.

The company further stated that it is aiming to convert a significant portion of a R24 billion investment pipeline into commitments following a steep fall in both approvals and disbursements during the financial year.

This pipeline is made up of 160 opportunities across a range of sectors, from agriculture and manufacturing to non-coal mining, with energy-related prospects emerging particularly strongly, as well as projects related to decarbonisation and the just energy transition.

“We should approve, I believe, a substantial portion of the pipeline that is available to us and hopefully move fast towards financial close in order to disburse,” CEO TP Nchocho said, reporting that the target for the current financial year was to make approvals of more than R10 billion.

The IDC had also received a mandate from its shareholder minister, trade, industry and competition minister Ebrahim Patel, to support the commercialisation of a green-hydrogen economy in South Africa.

A specialised team had been assembled to assess the full spectrum of opportunity, including the inputs and resources employed in the production of green hydrogen, as well as manufacturing spinoffs and distribution and logistics networks.

“I have designated the IDC to lead the commercialisation of the hydrogen economy in South Africa and there's considerable work that is being done now and we hope to complete that work in the course of this year and to be able to put some of those ideas forward to investors,” the minister said.

He also urged the IDC to “go green, go industrial and go bolder” as it sought to bounce back from a year where the focus had been on shoring up its balance sheet to “weather the storm”.