The Industrial Development Corporation (IDC) has confirmed that it has approached the National Treasury for an explicit guarantee, which it says will enable it to attract more concessional funding to meet its development mandate.

The State-owned development financier has also approached the South African Revenue Service (SARS) to explore the prospect of being granted tax exemptions similar to those in place for the Development Bank of Southern Africa.

CFO Isaac Malevu told Engineering News & Mining Weekly in an interview that the scale and timing of the guarantee had not been decided, but he confirmed that the proposal had been made to the National Treasury.

“An explicit guarantee would help us attract concessional funding . . . and secondly, it will help reduce the credit risk of the IDC, and hopefully that improves our credit rating,” Malevu explained.

“That’s what we’re looking for, because at the moment, when we talk to investors, our non- performing loans ratio and impairments ratio are seen as high. But if we had a guarantee, the picture looks very different.”

CEO Mmakgoshi Lekhethe, who previously worked at the National Treasury, could not be drawn on the department’s reaction to the request, which comes at a time when the National Treasury is still seeking to reduce the contingent liabilities on the national accounts.

Instead, she highlighted to Engineering News & Mining Weekly the fact that the IDC had not been among those State entities that had sought regular support from the National Treasury, which “recognised the role that the IDC was playing” in supporting the retention of key industries and in preserving industrial employment.

She added that the strategic nature of the sectors supported by the IDC had also been amplified by recent geopolitical developments, especially the war that had disrupted shipping in the Strait of Hormuz.



The National Treasury generally uses either the Medium-Term Budget Policy Statement in October or November, or the February Budget, to announce the type of policy changes being sought by the IDC.

Confirmation of the approach to the National Treasury and SARS comes against a backdrop of government wanting the IDC to play a more developmental role in sustaining strategic sectors, such as steel.

Speaking at the group’s 2025/26 financial results, Trade, Industry and Competition Minister Parks Tau reaffirmed the high expectations he had of the IDC in sustaining the domestic steel industry, which is under pressure as a result of global oversupply and rising international tariffs.

South Africa’s largest steel producer, ArcelorMittal South Africa (AMSA), is currently trading under a cautionary announcement because of ongoing discussions with the IDC over a possible transaction.

Tau said that the Steel Masterplan was under review and that once the changes were announced, which could be during the course of September, he expected that the IDC would fully align itself with the new strategy.

He described AMSA as a major part of the domestic steel ecosystem and said sustaining both its primary production and some of the niche products it produced was crucial to certain downstream sectors, making specific reference to the automotive industry.



Lekhethe told Engineering News & Mining Weekly that the IDC was likely to pursue the transaction despite the absence of a strategic equity partner, while stressing that interest was being shown by potential future partners.

“What we’ve decided to do is acquire the asset, and get on and do the work ourselves with the company, and depending on the turnaround strategy and the engagements, we can then decide what to do . . . [T]here are a lot of interested parties out there, but we haven’t identified any strategic equity partner yet.”