Our sectors

New Industries

New IndustriesRustmo1 Solar Farm produces 12 500 megawatt hours of electricityRustmo1 Solar Farm produces 12 500 megawatt hours of electricity

Driving industrial development and facilitating job creation

Since 1940, the Industrial Development Corporation (IDC) has helped facilitate South Africa’s industrial capacity by financing viable businesses within key sectors to stimulate the country’s economic growth.

In 2015 the IDC reinforced its operations and established the New Industries Strategic Business Unit (SBU). The primary objective is to identify the most promising new and emerging industry value chains and enabling technologies to support and nurture them so that they become globally competitive and facilitate jobs-rich industrialisation to make a meaningful contribution to South Africa’s economic growth.

Following the assessment of the attractiveness (sustainability and developmental impact) and potential competitive advantage of numerous new industry value chains and enabling technologies, a few were prioritised for pro-active development support through the New Industries SBU. These include:

Energy Storage From utility scale through to domestic and transport applications
Fuel Cells Focusing on market creation and stimulation to justify the localisation and domestication of the manufacturing of Fuel Cell components and ultimately complete Fuel Cell systems
Gas Beneficiation Focusing on the development of the value chain around a globally unique and competitive South African developed gas cleaning technology for supply to global markets
Renewable Energy inputs Focusing on the localisation and domestication of a variety of inputs, including in the solar, wind and hydro sectors
Medical Devices Focusing on the localisation and domestication of medical devices used,  consumed and required on the continent
Natural Products Application of SA’s indigenous flora in food ingredients, nutraceuticals, cosmetics and pharmaceuticals
Additive Manufacturing 3D printing as an enabling technology in multiple value chains
Nano-technology An enabler of multiple value chains

Based on our assessment, we are certain that each one of these industries has the potential to stimulate the establishment of many new sustainable businesses, which could create a significant number of jobs (thousands as a minimum; tens of thousands as a real potential) across the full industry value chain (from raw material through to final product). These new industries will thus make a meaningful contribution to economic growth in South Africa and will further facilitate the achievement of the following developmental outcomes:

  • Beneficiation of raw materials (for example platinum beneficiation within the Fuel Cell industry)
  • Localisation of manufacturing/import replacement (for example manufacturing of solar panels with very high local content)
  • Export revenue generation (for example through the local manufacturing of gas cleaning solutions and the sale thereof into global markets)
  • Youth entrepreneurship (for example through support of low barrier-to-entry enabling technologies such as 3D printing)
  • Rural community development (for example through growing, harvesting and processing of plants that are unique to SA for use in food ingredients, cosmetics or pharmaceuticals)

How do we fund businesses in New Industries?

The SBU is mandated to provide funding to businesses and projects in all of the prioritised new industries utilising equity and/or debt instruments. Funding can generally be provided across the entire value chain and at various stages of business development, from project origination or company start-up through to full-scale industrialisation and ultimately growth stage. Funding is structured on a case-by-case basis taking into account the maturity/risk profile of the business or project and its projected cash consumption/generation.

IDC expects the promoters of a business or project to make a meaningful equity contribution. If funding is structured as equity, IDC would typically target an equity stake of between 25.1% and 49.9%. Pricing of IDC funding, be it in the form of equity and/or debt, will be on normal commercial terms, with an appropriate discount based on the level of developmental objectives that are achievable.

The business or project under consideration should as a minimum:

  • Display good prospects of being economically viable
  • Leverage and capitalise on SA’s competitive advantages
  • Be aligned to and contribute towards the achievement of the SBU’s industry development goals for the relevant new industry

How do we structure funding?

The New Industries SBU assesses all applications and projects based on technical, commercial, financial and economic considerations.

Applications: Entrepreneurs that have developed a business proposal for the establishment of a new business or the expansion of an existing business within any part of the value chains and in any of the prioritised industries or utilising one of the prioritised enabling technologies can approach the SBU for funding.

Projects: Entrepreneurs or entities who wish to partner with the IDC in developing a project within any of the prioritised new industries can approach the SBU for co-funding of pre-feasibility and feasibility studies, including the funding of pilot plants.

How do I apply for funding?

Application for funding should be in writing and should include an executive summary and a business plan.  Please refer to this website for a comprehensive business plan guideline and further information. Click here to apply online.

 

Our sectors

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