The European Community (EC) and the South African Government/Department of Trade and Industry today concluded a EUR 54,901,000 (R549 010 000) agreement targeted at supporting black economic empowerment (BEE) and job creation in the private sector. The grant from the EC will be used to establish a private equity fund (the Risk Capital Facility) managed jointly by the Industrial Development Corporation (IDC) and the European Investment Bank (EIB).

The Ambassador of the European Union to South Africa, Michael Lake, stated that: "The Risk Capital Facility forms part of a larger Private Sector Support Programme to the DTI and illustrates the EC's continued support for economic development in South Africa".

The Risk Capital Facility will co-invest with the IDC in sustainable high development impact projects and will also provide wholesale financing to development-orientated niche funds. The Facility will have an equity bias and will, in addition, provide funding for business support.

"It is expected that the Risk Capital Facility will facilitate the creation of at least 7,000 additional jobs, which will be a critical component of Government's job creation initiatives" said Alec Erwin, Minister of Trade and Industry.

According to the IDC's Chief Executive Officer, Mr Khaya Ngqula: "The IDC frequently investigates new avenues to stretch its development impact. We believe that the IDC has been selected as fund manager based on its sound track record in Black Economic Empowerment as well as its ability to evaluate financial, technical, environmental and economic risks".

Michael Tutty, EIB's Vice-President responsible for the African, Caribbean and the Pacific region, stated: "The EIB will apply its expertise gained from managing risk capital funds elsewhere in the developing world to add value to the management of the EU Risk Capital Fund".