17 June 2009
South Africa’s Industrial Development Corporation has had further success in raising funds from foreign credit agencies, the latest being a €30-million (about R334.5-million) credit line from French-based Proparco.
Proparco is a partially owned subsidiary of French development finance institution Agence Française de Developpement, and acts as a catalyst for private investment targeting economic growth and development in developing countries.
According to the IDC, the line of credit will be used to increase the state-owned lender’s capacity to lend, in line with their target of investing over R60-billion in the South African economy over the next five years.
“We have a strong working relationship with Proparco, which is demonstrated by the fact that the IDC is receiving its fifth credit facility from the institution,” IDC chief financial officer Gert Gouws said in a statement late last month.
“This loan will also boost our export credit finance, which has proved to be a key stimulus for the South African economy.”
Proparco southern Africa regional representative Sophie le Roy explained that this fifth transaction with the IDC would meet a crucial need for hard currency in the country.
“The funds will benefit a wide range of South African businesses that need foreign currency to keep funding their activity,” she said.
According to the IDC, the demand for lending had increased tremendously due to the global economic downturn, prompting the state-owned lender to source funding from the international market in recent months.
Last month, it secured a US$50-million (about R422-million) loan from the China Construction Bank Johannesburg branch to recapitalise its export finance book, as well as €60-million (about R690.9-million) credit line from the European Investment Bank to finance viable projects by small and medium enterprises in the industrial, resources and services sectors.
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