The European Union-funded Risk Capital Facility 2 (RCF2), launched through South Africa’s Department of Trade and Industry, has provided â,¬50-million (about R450-million) to facilitate broad-based black economic empowerment (BEE) in the small-business sector.
The cash will be disbursed over a three-year period with a focus on the creation of employment opportunities in predominantly underdeveloped regions, the Industrial Development Corporation (IDC) said on Monday.
Following on from the successful implementation and closure of the private-sector programme called Risk Capital Facility 1 (RCF1), the RCF2 programme was negotiated between the IDC, the department, a European Commission delegation to South Africa and the European Investment Bank (EIB).
It brings to the table â,¬50-million for private-sector development. Of this, â,¬46,3-million (R430-million) will be available for investing in qualifying projects, with the balance of â,¬3,7-million for ancillary costs, the IDC said.
RCF2 will be housed within IDC and will be co-managed by the IDC and EIB.
Through a total investment of about R300-million, RCF1 created more than 5Â 000 jobs over various sectors throughout the country in 90 small- and medium-sized BEE enterprises. In addition, RCF1 investments leveraged just more than R650-million in co-investments.
EU commitment
“The Risk Capital Facility was designed to support sustainable employment creation and economic empowerment for previously disadvantaged individuals. Despite notable challenges, the successes of this programme have allowed us to favourably consider funding for a similar initiative in the years ahead.
“The European Union’s support in this sector underscores our commitment to partner the South African government in its undertaking to create a better life for all,” said EU ambassador Lodewijk Briët.
Lionel October, deputy director general for enterprise and industry development in Department of Trade and Industry, said the government believes that growing small enterprises is vital to achieving its goal of halving unemployment and poverty by 2014.
“Government is committed to building SMEs [small and medium enterprises] and broad-based BEE. This is a consistent theme of government’s policies such as Asgisa [the Accelerated Shared Growth Initiative for South Africa] and the economic cluster’s programme of action,” he said.
He added that the RCF2 will play a critical role in job creation and economic development throughout South Africa, but principally within underdeveloped, underfunded communities where its effectrs will be most significantly noted. — I-Net Bridge