South Africa's State-owned Industrial Development Corporation (IDC) reported funding approvals of R9,4-billion for the year to March 31, 2010, down from the R10,8-billion approved in the previous year. The decline in approvals was the fist in a number of years, with the IDC having a stated target of injecting R70-billion into the domestic economy between 2009 and 2013.

But CEO Geoffrey Qhena indicated that it was still possible to meet the injection target and set a new target of R100-billion by 2015, with R11,7-billion to be directed towards green industries, which would be "our biggest focus".

The development finance institution (DFI) also reported approvals worth R1,4-billion for companies that found themselves in distress as a result of South Africa slumping to its first recession in 17 years during 2009.

It said on Thursday that such approvals, which represented 15% of total IDC approvals, had helped to secure 8 800 jobs.

In total, the IDC supported 28 companies that were deemed to be in distress and also helped an additional 60 firms in restructuring efforts in light of the strains created by the recession.

Qhena acknowledged that the uptake of distressed funding had been lower than initially anticipated and said that plans were in place to address this with industry workshops and other forums.

At the height of the recession, it was announced that the IDC had set aside R6,1-billion to support companies in distress. However, it also put in place strict conditions, with recipients facing restrictions on retrenchments, dividends and executive bonuses. The IDC indicated last year that these restrictions been "very painful" for some of the entrepreneurially orientated beneficiaries to accept.

Qhena said that 25 000 jobs had been created and saved through IDC support in 2010, which was lower than in 2009, but still a "significant achievement" in light of the "difficult" trading conditions.

The group's revenue fell 48% and profit declined by 60% to R2,2-billion over the period.

The IDC also noted that some 65% of its funding had been directed towards economic expansion and had flowed to either start-up enterprises, or expansionary activities.

Qhena said that the group's strategy had been realigned to support government's second Industrial Policy Action Plan, or Ipap2, and the so-called New Growth Path, which was geared towards revitalising manufacturing, particularly around South Africa's R800-billion infrastructure programmes, creating sustainable jobs and developing new industries, especially green industries.

The IDC would, in future, consider taking the lead on project origination, which Qhena said would call for deeper resources and increased risk taking.

However, no reference was made to the possibility that government might be considering a recapitalisation of the IDC in order to provide it with the balance sheet strength needed to take on higher levels of risk.

Trade and Industry Minister Dr Rob Davies has questioned whether it was appropriate for the IDC to be operating off a balance sheet that has been bequeathed to it "quite literally by Jan Smuts". For his part, Economic Development Minister Ebrahim Patel, whose department now has authority to coordinate the major DFIs, has called for the strategic development framework for the institutions such as the IDC to ensure "a far greater impact in achieving the goals of our developmental State".

All IDC indicted, though, was a commitment to "leveraging" its balance sheet. However, it also stressed that prudent management "remains vital so that the lender is still able to align demand and capital requirements as projects come on stream".