South African project finance body the Industrial Development Corporation (IDC) and the African Development Bank (ADB) yesterday signed a ten-year $50-million funding agreement that will see the two development finance institutions (DFI) facilitating the rollout of funding to industrial development projects in various sectors throughout the African continent.

This is the second line of credit that the IDC has been given by the ADB, with the first $100-million facility being almost fully applied towards the funding of small-to-medium-sized enterprises (SMEs).

The IDC’s president and CEO Dr Khaya Ngqula said that part of the fund may be used to help South Africa gear up for the 2010 Soccer World Cup but it is envisaged that the fund will be used to boost projects in the Southern African Development Community region in the mining and beneficiation industries, manufacturing, construction, agro-business, transport and communications, electricity, gas and water sectors, as well as financing SMEs principally involved in the automotive services sector, leasing, insurance, tourism, hotels and restaurants.

“Ours is a long shared relationship that sees a leading African DFI, in line with the imperatives of Nepad, partnering another African DFI to advance the development and emancipation of sub-Saharan African industrialists by giving them an opportunity to obtain competitively priced loan finance. The way the deal has been structured supports sustainable development imperatives through responsible environmental practices in the projects we will finance, and we are excited by it,” Ngqula said.

The ADB has certain requirements that must be met once the fund has been set in place.

The procurement of goods and services must be from ADB’s wide list of regional (African) and nonregional (international) countries, while the IDC must have an environmental policy and must conduct its business in an environmentally responsive manner.

“It is my fervent belief that our long-shared relationship with a visionary African DFI such as the ADB will, in the long run, result in the realisation of our long-held vision of extricating our continent from the quagmire of underdevelopment and poverty, into a prosperous shared future among its countries and people,” Ngqula said.