Johannesburg — THE Industrial Development Corporation (IDC) last week said it would use the R900m raised in a syndicated term loan from local banks for investments in black economic empowerment, job creation and investment in poorer provinces.

On Thursday, the IDC signed two term loan facilities worth $125m and R900m in the international and local markets respectively.

A syndicate of 15 banks financed the loans. Standard Chartered, Calyon Corporate and Investment Bank, Standard Bank, Investec and Bank of Tokyo Mitsubishi were the mandated lead arrangers.

Raising money in foreign and local markets is one of the ways in which the government-owned corporation funds itself.

Besides term loans, the IDC can also raise money by selling its stakes in listed and unlisted entities.

IDC corporate funding head Bharti Harie said the R900m raised locally would be used for the organisation's general corporate purposes, which included promoting economic development in poorer provinces, wealth creation and black economic empowerment.

"We need to make investments that create wealth.

"This loan means that we will have more money to spend on development," Harie said.

According to the IDC's latest annual report, in the financial year to June last year, the corporation's funding to rural areas amounted to more than R6,5bn in more than 700 transactions.

A trade and industry department budget vote document, which the national treasury published last month, showed that, over the past five years, more than 85% of the IDC's deals benefited small and medium-sized enterprises.

Last year, small and medium-size enterprises received 70% of approved loans.

The IDC said the dollar loan facility would have a tenure of three years, while the rand facility would run for five years.