Johannesburg, South Africa — ESI-AFRICA.COM — 15 February 2012 – Over the next five years the Industrial Development Corporation (IDC) is to invest R10 billion in the South African economy in order to establish a green energy industry in the country, and to create more jobs in the process.

Of the three economic stimulus packages announced by President Jacob Zuma in parliament last week, the most is known about the R10 billion that the IDC has set aside. This money will be used mainly to make loans at very low interest rates available for labour-intensive projects, especially in green industries and advanced manufacturing projects.

“It will be used for renewable energy resources, in particular solar and wind power,” said IDC chief financial officer Gert Gouws. “Agricultural processing projects will also be considered for cheap loans. The loans will be financed from dividends from the IDC’s equity stakes, which will clearly be high over the next couple of years.”

The equity portfolio contains only three blue-chip resource companies – Kumba Iron Ore , Sasol and BHP Billiton – and it is already worth more than R40 billion. Kumba, for example, last week declared a closing dividend of R21, which brings the final dividend for the year to R34.50 per share – more than double that of last year.

Share investments of about R10 billion in ArcelorMittal SA and Sappi  – will be available for funding the labour-intensive loans scheme. “The degree of labour intensity of each project concerned would be the absolute benchmark on which the interest rate for each loan will be determined,” said Gouws.

“Renewable energy projects,” he explained, “were not in themselves exceptionally labour-intensive, but the supply channels – such as the manufacture of parts and the research to conduct an environmental impact study over one or two years – were certainly labour-intensive.” He added that the intention was to obtain overseas partners for green industries to map out the development of a local industry.