By: Anna Majavu
The Industrial Development Corporation (IDC) is poised to give away R200 million in grant funding for a township, rural and small-town SMMES to purchase alternative energy systems. SMMEs, including both formal and informal traders, social businesses, small retailers and manufacturing businesses who have been directly affected by load-shedding can apply for the grants. The IDC will again be using intermediaries, or strategic implementing partners (SIPs) both to disburse the R200 million and to identify which businesses to give the alternative energy grants to. Companies who want a slice of the money have until 4 November 2023 to put in a bid.
IDC head of corporate affairs Tshepo Ramodibe said barring any obstacles, the IDC aimed to start rolling out the new Township Energy Fund early next year. The SIPs will have to provide evidence that they have “appropriate partnership arrangements with local/community-based installers and maintenance providers” and show how they will include youth and women in their projects.
They will not be allowed to fritter the money away on “expenses” and may only spend a maximum of 15%, or R30 million overall, on their own management fees. “While we can’t provide a precise number of SMMEs that we intend to reach, we are hopeful that partnering with SIPs, which have a considerable footprint in the township and rural economies, will give us greater reach,” Ramodibe told Vutivi News. He added that the IDC had a good experience with using SIPs to roll out national assistance to township and rural businesses after the July 2021 unrest and later the KwaZulu-Natal floods.
When asked if it was wise for the SIPs to also be in charge of choosing which SMMEs would get the grants instead of allowing them to apply to the IDC directly, Ramodibe said the IDC had put safeguards in place to prevent conflicts of interest and corruption. “SIPs will be vetted through an intense due diligence process. They will need to demonstrate good governance and adequate policies, systems and procedures. The IDC has regular and detailed reporting requirements from the SIPs,” he said, adding that the IDC would also audit them to ensure they were delivering.
SIPs that procure equipment or components locally will get preference. While experienced solar system installers are likely to be selected to distribute some of the funds, many of the smaller businesses, especially street-based micro-enterprises, will need to use generators or inverters instead, and companies specialising in those will also be drawn in. “We will, as far as possible, insist on local partners from the targeted areas who meet the IDC’s commitment to transformation ie. black, women- and youth-owned”, said Ramodibe. Non-profit organisations with a track record in rolling out alternative energy systems can also apply.
