AfDB Approves a Line of Credit of USD 200 Million to the Industrial Development Corporation of South Africa
Tunis, 19 May 2010- The Board of Directors of the African Development Bank (AfDB) Group, through its private sector window, approved on Wednesday, 19 May 2010 in Tunis a line of credit of USD 200 million to the Industrial Development Corporation of South Africa (IDC).
IDC will use the proceeds of the Line of credit to on-lend to projects in its current lending pipeline or new projects that may arise in the near future. IDC’s role as a financier of development projects across Africa is growing and is an integral part of its strategy. This transaction will be used to finance long-term infrastructure, agriculture or other development projects, particularly in low income countries and fragile states.
Over the past few years, there has been a tremendous surge in the number, variety and size of projects being developed in Africa and institutions such as IDC play an important role in providing development finance. IDC is a solid, well-managed financial institution with the capacity to play a greater role. It benefits from a strong enabling environment in South Africa from which to operate, including developed capital markets and a skilled labor pool.
The Bank’s involvement will fill a gap in the financial services market by providing long-term foreign currency funding, allowing IDC to on-lend to projects which will ultimately enhance productive capacity and growth on the Continent. The projects will create employment, generate incremental government revenues, expand trade and improve physical and social infrastructure.
The project is well aligned with the Bank’s institutional strategies, including the latest Medium-Term Strategy. It is also aligned with the South Africa country strategy as well as the Bank’s private sector operations strategy.