The Industrial Development Corporation (IDC) has confirmed that it has approached the National Treasury for an explicit guarantee, which it says will enable it to attract more concessional funding to meet its development mandate.
The State-owned development financier has also approached the South African Revenue Service (SARS) to explore the prospect of being granted tax exemptions similar to those in place for the Development Bank of Southern Africa.
CFO Isaac Malevu told Engineering News in an interview that the scale and timing of the guarantee had not been decided, but he confirmed that the proposal had been made to the National Treasury.
“An explicit guarantee would help us attract concessional funding . . . and secondly, it will help reduce the credit risk of the IDC, and hopefully that improves our credit rating,” Malevu explained.
“That's what we're looking for, because at the moment, when we talk to investors, our non-performing loans ratio and impairments ratio are seen as high. But if we had a guarantee, the picture looks very different.”
