South Africa’s Industrial Development Corporation (IDC) said on Tuesday the pre-feasibility study for a R129-billion coal-to-liquid plant it was conducting with Sasol was due in March 2009.
If successful, the project, 49% owned by IDC, was scheduled to be completed in 2016, with the first fuel expected to come on stream that same year, IDC chief executive Geoffrey Qhena told Reuters in an emailed statement.
Qhena also said the state-owned financial lender would invest at least R60-billion over the next five years, as a global credit crunch bites and companies seek alternative funders.
”As IDC we have made a commitment to approve investments of at least R60-billion over the next five years,” he said.
”This is a large increase compared to the R26-billion that was approved over the previous five years.”
IDC’s 2008 annual report indicates a strong balance sheet, with capital and reserves increasing by R23,7-billion to R75,8-billion during the 2007/08 financial year, mainly on the back of high commodity prices.
IDC’s activities cover the whole range of industries, including agriculture, mining, manufacturing and services.
But Qhena said IDC foresaw a greater need to fund industries in support of South Africa’s revamped national industrial policy, as well as infrastructure related investment.
Africa’s richest economy has embarked on a multibillion-dollar spending programme as the country gears up to host the Soccer World Cup and moves to boost power generating capacity that has crimped growth.
”In the shorter term, the IDC is expecting a greater demand for its funding as the liquidity experienced in the capital markets over the past few years is drying up and commercial financial institutions take a more risk-averse approach to lending,” Qhena said.
He said IDC mining subsidiary Foskor, which grew its profit before tax by R520-million to just over R1-billion in 2007/08, was preparing an initial public offering for 2009.
”The IDC will transfer at least 26% of its equity in Foskor to black South Africans [before the end of 2009],” Qhena said, adding that further updates to the market will be provided later. – Reuters