The Land Reform Credit Facility

The Land Reform Credit Facility (LRCF) is a wholesale finance facility offered by Khula Enterprise Finance Ltd., whose aim is to stimulate and encourage private sector participation and involvement in the land reform process.

The LRCF, funded by the Department of Land Affairs and the European Union, achieves its objective by incentivising commercial banks and other high credit-rated institutions to invest in high-value agricultural and eco-tourism joint ventures, thereby unlocking private sector investment in the agricultural, agri-business and eco-tourism sectors.

Dutch funds available for investments in South Africa

South Africa is regarded as a new market and one which is expanding rapidly, opening the door to opportunities for businesses to expand investments and trade relations.

The Dutch Ministry of Foreign Affairs finances companies seeking to invest in South Africa, together with a local South-African company. It is possible for such companies to receive a contribution of 50% of the total project costs.

This business Dutch incentive programme, known as PSOM, ensures co-operation with emerging markets. With regard to its utilisation in South Africa, only Dutch companies - together with a South African company - may apply for such a PSOM grant.

However, the PSOM incentive does not only stimulate investments in South Africa, given that it may be applied to Dutch investments in other African countries such as: Benin, Burkina Faso, Cape Verde, Egypt, Ethiopia, Ghana, Kenya, Mali, Mozambique, Rwanda, Senegal, Tanzania, Uganda and Zambia.

Please see http://www.evd.nl/psom for the latest information about countries in which the PSOM incentive is available.

In terms of adhering to the criteria for a PSOM grant, the proposed investment must be a Dutch initiative, in co-operation with a local counterpart.
With regard to investments in Uganda or Mozambique, the situation is somewhat different, enabling companies based in an emerging market, such as South Africa, to apply for a PSOM grant.

Qualifying Criteria: To qualify, projects should at least meet the following criteria:

• The project should stimulate the transfer of knowledge and have a positive impact on
   employment creation and income generation;
• The project should aim at introducing a new, but elsewhere proven technology or product;
• The project is initiated and implemented in co-operation with local South African
    counterparts; and
• The project has a maximum duration of two years.

PSOM projects are selected on the basis of an open tender procedure.

SEDA Technology Programme (stp)

As part of the Government’s national strategy of consolidating small enterprise support interventions across various Government Departments and agencies, the Department of Trade & Industry (dti) has in place a process for streamlining its small enterprises support interventions.

As part of this process, the dti and the Department of Science and Technology (DST) agreed to merge the Godisa Trust with the National Transfer Centre (NTTC) and the Technology Advisory Centre (TAC). The three dti incubators, namely Mpumalanga Stainless Steel Initiative (MSI), Downstream Aluminium Centre for Technology (DACT) and FURNTECH, were also incorporated into the SEDA Technology Programme (STP).

The STP was created in order to provide technology and business development support services to small enterprises as an integral part of its mandate to drive the national technology and business incubation agenda.

The programme contributes to South Africa's economic development through the creation of and support for technology business centres, inclusive of incubators and technology demonstration centres. These centres offer a wide variety of business support services and office infrastructure to small enterprises.

It also provides a range of services that enable industry and, especially, small enterprises in the second economy to access and transfer technology.

There are two main areas in which the STP provides support, being:

Technology Transfer Division:

The Technology Transfer Division (TTD), a division within the STP which manages the Technology Transfer Fund (TTF). Its purpose is to facilitate technology transfer and diffusion to Small, Medium and Micro Enterprises, with a specific focus on the second economy. The TTD assists businesses in acquiring appropriate technologies through national and international networks and by negotiating technology transfer agreements.

The programme offers the following services:

- Technology assessment
- Technology sourcing and evaluation
- Technology selection
- Negotiating and drafting of agreements
- Technology transfer education
- Technology transfer
- Project management
- Technology Advisory centre

TTD provides finance through the TTF, whose primary purpose is to specifically fund defined components of the process of transferring available technology to entrepreneurs, communities and existing South African businesses, focusing on the second economy.
The TTF provides funding to enable technology transfer for the second economy as a grant with no pay-back up to a maximum of R500 000 per project.

Technology Business Incubation:

Incubation sets out to assist in growing Small, Medium and Micro Enterprises in South Africa. It is designed to strengthen technology diffusion and harness the entrepreneurship of the science and technology community in this country.

Incubation provides support to South African enterprise, with such support directly assisting inventors and new enterprises to use technology optimally in quest to improve the competitiveness of their products and services. In addition, it improves business infrastructure, strategic guidance, financial and legal advice, and creates an environment of learning and sharing - an environment in which information, experience and ideas are freely exchanged.

Incubation also assists enterprises to develop skills, knowledge and markets. These improvements are intended to lead to increased business profitability and growth, enabling increased employment and entry to new markets with cutting-edge products and services.

The STP currently delivers financial, strategic, technological and management support to the following incubators:

- Mpumalanga Stainless Initiative;
- The Down Stream Aluminium Centre for Technology;
- Furniture Technology Centre;
- Acorn Technologies;
- Chemin;
- Egoli Bio Life Sciences;
- Embizeni Innovation Support Centre;
- Softstart - Bodibeng Technology (SoftStartBTI);
- Timbali Technology;
- Zenzele Technology;
- Essential Oils Incubation Centre;
- Ekurhuleni Base Metal Incubator;
- Platinum Incubator;
- Bio-diesel Incubator; and
- AIDC

PSOM Grant:

Projects in South Africa selected to receive a PSOM grant are awarded 50% of the total project costs. The maximum permissible total project costs is EUR1,500 million, while the average PSOM contribution is EUR0,5 million.

A PSOM project for Mozambique or Uganda receives 60% of total project costs, while the maximum total project cost is EUR850 000. The average PSOM contribution is approximately EUR500.000. Funding for the remainder of the project budget must be provided by the participants themselves.

EVD:

The final responsibility for the PSOM incentive lies with the EVD while the Netherlands Embassy, located in Pretoria, provides a key advisory role.