South Africa’s Industrial Development Corporation, and state-owned lender, has a plan to sell about 15 billion Rand’s worth of investments it currently holds over the next five years. The initiative is part of its divestment plan, Chief Financial Officer, Gert Gouws said in Addis Ababa, Ethiopia’s capital, today.

The state-owned lender has decided it will focus on selling debt and obtaining loans in the next 12 to 18 months, Gouws explained in an interview.

We are under-leveraged. In the next 12 to 18 months, our focus will be on bond issuances and borrowings rather than share sales.

Gouws says the IDC will use the money from divestments, borrowing and bond sales to finance renewable energy projects around the country.

Gouws is attending the World Economic Forum on Africa in the Ethiopian capital and says the IDC will borrow and issue bonds to raise as much as 50 billion rand in the next five years.

Gouws says the South African government has ordered the lender to tackle the jobless rate by boosting the backing of projects that will help the continent’s largest economy alleviate unemployment.

South Africa’s unemployment rate rose to 25,2 per cent in the first quarter of this financial year. That’s the highest of more than 60 nations that economic news agency, Bloomberg, monitors.

Finance Minister Pravin Gordhan has previously said the government has aspirations to reduce the jobless rate to 14 per cent by 2020 through economic growth, even though that economic growth may slow to 2,7 per cent this year from 3,1 per cent last year.

The IDC currently has investments in more than 200 companies, R50 billion in publicly traded companies, and R30 billion in unlisted stocks.

[Source: MoneyWeb]