Development finance institutions (DFIs) the Industrial Development Corporation (IDC) and the Development Bank of Southern Africa (DBSA) have formed a partnership to collaborate on the development, financing and implementation of energy security projects within special economic zones (SEZs).
Energy security within SEZs contributes to greater competitiveness by ensuring that industries are able to thrive without disruption, as SEZs attract significant investments, contribute to creating employment opportunities and are key drivers of economic growth.
The partnership between the DFIs is a significant milestone in the establishment of a close working relationship by two entities with strong expertise and technical credentials in advancing socioeconomic and industrial development, says IDC industry planning and project development divisional executive Rian Coetzee.
“Energy is a key input cost and enabler in manufacturing, and the IDC and DBSA recognise the significance of reliable and affordable energy,” he adds.
The IDC already has a portfolio of R1.9-billion invested across 22 projects in seven SEZs, including in the Coega and Tshwane Automotive SEZs in which its investments support black-owned Tier 1 and Tier 2 component manufacturers.
“South Africa‘s SEZs are critical engines of industrialisation and job creation, yet past energy constraints have held back their full potential,” says DBSA programmes group executive Dr Phindile Masangane.
“Through this collaboration with the IDC, the DBSA is deploying its full financing and project preparation capabilities to solve that challenge at scale and accelerate the development of energy projects to supply reliable, affordable, low-carbon energy to the zones,” she says.
Further, in the agreement, the organisations aims to ensure collaboration in the development, financing and implementation of energy security projects within SEZs, with a view to enhancing energy resilience, promoting industrial development and supporting sustainable economic growth.
The organisations also aim to jointly identify and originate energy security projects suitable for implementation within this programme, and establish and maintain a structured development project pipeline.
They also aim to co-finance the preparation and/or project development of projects to bankable feasibility stage and to manage the programme within the Department of Trade, Industry and Competition’s Industrial Zones Programme Project Management Unit within the IDC.