1. LATEST DEVELOPMENTS ON INCENTIVES
Mark Alard
Director : Strategic Partnerships and Customer Care
17 February 2017

2. OUTLINE Available Incentive Schemes 12i Tax Allowance
Black Industrialist Scheme (BIS)
MCEP Loan Facility
Amended Guidelines - ADEP
Amended Guidelines - Strategic Partnership Programme (formerly known as Incubation Support Programme)
THRIP Call
Contact Details

3. AVAILABLE INCENTIVE SCHEMES
12i Tax Allowance
Automotive Incentive Scheme (AIS)
Aquaculture Development Incentive Programme (ADEP)
Export Marketing & Investment Assistance (EMIA)
Sector Specific Assistance Scheme (SSAS)
Capital Projects Feasibility Programme (CPFP)
Film & Television Production
Business Process Services (BPS)
Support Programme for Industrial Innovation (SPII)
Technology and Human Resources for Industry Programme (THRIP)
Incubator Support Programme (ISP)
Black Industrialist Scheme (BIS)
Critical Infrastructure Programme (CIP)
SEZ Investment Incentive

4. MANUFACTURING INVESTMENT CLUSTER
Incentive Programme
Purpose
Target / Eligibility Criteria
Incentive Offering
12I Tax Allowance - comes to an end in December 2017
To promote industrial upgrading and use of new technology in manufacturing.
Green and Bownfield investments
Tax allowances up to 55 % of the investment cost and Training Allowance

5. BROADENING PARTICIPATION CLUSTER
Incentive Programme
Purpose
Target / Eligibility Criteria
Incentive Offering
Black Industrialist Scheme (BIS)
Partner with Black owned and managed companies on their expansion and green field investments
Must be at least 51% Black owned
Cost sharing grant of up to R50 million based on qualifying costs

6. INTRODUCTION AND BACKGROUND
04 Nov 2015: Cabinet approved the Black Industrialist Policy which aligns with the National Development Plan and the Industrial Policy Action Plan (IPAP); which underpins development of the Manufacturing Sector, with an aim to raise the impact of interventions to support industrial development;
09 Nov 2015: Launch by the Minister of Trade and Industry, as part of government’s broad industrial base and inject new entrepreneurial dynamism in the economy
The BIP Policy calls for bolder policy interventions on the part of the State to expand the industrial base of the country and grow the economy through dedicated support directly at black manufacturers; as highlighted in the latest IPAP;
Launch of Black Industrialist Scheme (BIS) – incentive programme of the Black Industrialist Policy, which aims to promote the participation of black industrialists as manufacturers in key sectors as identified in IPAP;
BIS – Outlines key measures aimed at supporting majority black-owned manufacturing companies such as access to finance, access to markets, skills development, standards, quality and productivity improvement.

7. OBJECTIVES OF THE BIS
Accelerate the quantitative & qualitative increase and participation of Black Industrialists in the national economy, selected industrial sectors & value chains.
Create multiple & diverse pathways and instruments for Black Industrialists to enter strategic & targeted industrial sectors & value chains in the short to medium term.
Utilise Black Industrialists for economic growth, economic transformation, employment creation and sustainability.

8. ELIGIBILITY CRITERIA
Have greater than fifty percent (>50%) shareholding and management control.
 Have a valid B-BBEE certificate of compliance.
Be directly involved in the day-to-day running of the
operation and must have requisite expertise in the sector.
 Have a project with a minimum investment of (R30m).
Undertake a project which should result in securing or
increasing direct employment.
Requisite skills, expertise and knowledge in operation

9. INCENTIVE OFFERINGS
Cost sharing grant ranging from 30% to 50% to approved entities to a maximum of R50 million.
Quantum of grant depends on: level of black ownership, management control and the project value.
The maximum grant of R50 million may be utilised for:
Capital investment costs;
Feasibility studies towards a bankable business plan (to the maximum of 3% of projected investment project cost);
Post-investment support (to the maximum of R ); and
Business Development Services (to the maximum of R2 million)

10. ECONOMIC BENEFIT CRITERIA
Description
Points
A. Employment
Securing/retaining or increasing direct employment 1
B. Market Share
New business/operations: Securing market share for the entity; or
Existing business/operations: Increase market share for the entity
C. Quality Improvement
Reduction of relative prices and/or increasing the quality of products to consumers
D. Green Technology and Resource Efficiency Improvements
Savings or better utilisation of energy or materials and/or cleaner production improvement and/or waste management improvement and/or water usage improvement and/or use of renewable energy
E. Localisation
Increasing the localisation of production activities (diversification and exports)
F. Regional Spread
Projects should be located in rural areas or areas with unemployment higher than twenty five percent (25%)
G. Personal Risk
Demonstrate own financial and/or non-financial contribution to the business
H. Empowerment
Achieve at least a level Four (4) B-BBEE contributor status as per revised B-BBEE codes of good practice published in October 2013 (as amended)
[1]

11. QUALIFYING COSTS Capital Investment
Machinery and Equipment (owned or capitalised financial lease), tools, jigs and dyes and forklifts, at cost and will also include green technology, energy and resource efficiency equipment.
Owned and leased (capitalised lease) factory buildings, at cost. The investment in qualifying buildings must either constitute newly acquired buildings or the acquisition of an existing building at cost.
Commercial vehicles (owned or capitalised financial lease) are only eligible if such vehicles are to be used for commercial purposes linked to the production process. This includes vehicles such as for collection, delivery and distribution of goods.

12. QUALIFYING COSTS Investment Support Feasibility Studies
The objective of this component is to offer support for project feasibility studies and related assessments that have a positive impact on the developmental aspects including job creation, skills development, as well as black business empowerment.
The feasibility studies will include licences, quality assurance, conformity assessments and standards.
The appointed service provider(s) for the feasibility studies must be sourced from the DFI’s list of accredited service providers following due procurement processes and procedures.
Post Investment Support
Specialised technical training will be supported in selected areas identified by the BI with the assistance of the DFI’s
Mentorship guidance will include financial management, operations and production planning, human resource development, administration, marketing and business continuity services.

13. QUALIFYING COSTS (BDS)
Focus areas
Categories
Consulting fees and expenses
Product Development
Product design
Pattern-making, prototyping, grading, sizing and counter-sampling
Product development
Introducing product ranges and product adaptations for new markets
Conformity assessment of products e.g. testing, inspection, certification
Costs for conformity assessment of products
Consumer acceptability studies
Marketing new products to focus groups before product launch to market
Packaging design
Consultancy and design costs
Conformity assessment certification
Quality management improvement, Environmental management improvement, process capability improvement and Product quality improvement
- Cost of Installing or improving quality management systems;
- Costs for preparations for certification and pre/initial assessment costs
Accreditation
Costs for preparations for accreditation and pre-/initial assessment
Information technology systems
Acquisition and deployment of systems
Acquisition software for integrated production management information systems
Procurement process improvement
Introducing improved and efficient procurement processes
Cost of introducing new procurement processes
Patents Costs
Registration of Patents
Registration costs

14. Percentage Black ownership
GRANT CALCULATION
Quantum of grant – Depends on level of black ownership and
points achieved on the economic benefit criteria
Points on Economic Benefit Criteria
Percentage Black ownership
50% to 75%
> 75% to 90%
> 90% to 100%
4 to 6 Points
30%
35%
40%
7 Points
45%
50%

15. NON QUALIFYING COSTS
Assets purchased from a connected party and Business Development
Services including Feasibility studies and Post-investment support
sourced from a connected party will be excluded from qualifying costs.
Salaries and Wages
Passenger Vehicles (non-commercial vehicles) such as sedans, luxury 4 X 4s, SUVs and People Carrier Minibuses
VAT and finance charges on assets
Rates and Taxes
Training that is not related to the manufacturing operations of the entity
Staff wages & salaries and staff related costs incurred in implementing any of the above projects
Costs incurred before approval

16. CHECKLIST AND PROCESS Fully completed and signed Application Form
Valid BB-BEE certificate
Valid Tax Clearance Certificate
Incorporation Certificate
Latest Audited Financial Statements or Mgt Accounts
Financial Projections for three years (New and Expansion Projects )
Completed Business Plan
Project Executive Plan / Summary
Board Resolution
Certified Copies of the Identity Documents of Shareholders and Shareholder Certificates

17. CHECKLIST AND PROCESS
Proof that the Market has been secured (off take agreements / or letters of intent)
Pre-Feasibility Research document (if applying for feasibility component )
Fully completed and signed declaration form (arms length relationship)
Assurance letters / agreements from the co-funders of the project
Quotations of assets
Economic Benefits (Page3 of 9) to be fully completed
All potential applicants will be required to engage with the Department
Upon completion of all documentation as per the checklist, an enquiry number will be issued and submission of application to the
All further communication will be directly between applicant and programme administration upon submission of application online

18. Manufacturing Competitiveness Enhancement Programme Loan Facility
This facility has been launched in September 2016 with the Department of Trade and Industry and the Industrial Development Corporation (IDC)
The facility is administered by the IDC
Purpose of the facility is to make South African manufacturing companies more competitive.
The programme focuses on providing working capital loans to manufacturing companies who qualify as per the qualifying criteria. Plant and Equipment loans will be provided only to manufacturing companies that are owned by Black Industrialists only
Both loans are priced at a preferential rate fixed at 4% per annum

19. Qualifying Criteria for Working Capital Loan
Facility is available for working capital
Not applicable to start ups
Capped at R50 million per application
Only applicable to manufacturing companies under SIC code 3
Max repayment term is 48 months
First draw down must be within 6 months from the date of approval
Applicant must not lay off staff during the term of the facility
Should be BB-BEE level 4 or achieve that status within two years of approval
Fees (for eg. Raising fees) not applicable

20. Qualifying Criteria for Plant and Equipment Loan
Facility is only available for Black Industrialists (BI)
Start up businesses may also apply
Capped at R50 million per application
Only applicable to manufacturing companies under SIC code 3
Max repayment term is 84 months
Pre and post business development support will be capped at R3 million per application
NB : Must qualify with the dti definition of Black Industrialist

21. DEFINITION OF BLACK INDUSTRIALISTS
A Black industrialist is a juristic person that includes co-operatives, incorporated in terms of the Companies Act 2008 (as amended) owned by Black South Africans as defined by the B-BBEE Act, who creates and owns value-adding industrial capacity and provides long-term strategic and operational leadership to a business. Characterized by:
Provision of strategic and operational leadership;
has a high level of ownership (>50%) and/or exercises control over the business;
Entrepreneurial driven; takes personal risk in the business;
does business in the manufacturing sector ( IPAP),
long term commitment to the business and is a medium to long term investor.
While there is a desire to support entities with significant and dominant Black ownership and control, it is accepted that there may be a need to include other shareholders to attract relevant skills, finance and opportunities.

22. HOW TO APPLY Visit the IDC website www.idc.co.za
Click on apply for finance and follow the instructions
Note that the institutional arrangements and due processes of the IDC need to be adhered to when making an application for either of these facilities

23. Target / Eligibility Criteria
Incentive Programme
Purpose
Target / Eligibility Criteria
Incentive Offering
Aquaculture Development and Enhancement Programme (ADEP)
.To stimulate investment in the Aquaculture with the specific intention to
Increase production
Sustain and create jobs
Encourage geographical spread
Broaden participation
South African Registered Entities engaged in the following operations:
Primary
Brood Stock
Seed Production
Juvenile (spat, fry, fingerling) operations including hatchery and nursery facilities
On-growing operations
Secondary
Post-harvesting handling, eviscerating, packing & quick freezing
Filleting, portioning and packaging
Value adding: curing, brining & smoking
Waste stream handling
Ancillary
Feed manufacturing,
R&D projects
Privately owned aquaculture veterinary services
Emerging Black Farmers
Reimbursable cost-sharing grant of up to a max of R30 (40 million )million for qualifying costs
Score based using an Economic Benefit crireria

24. BROADENING PARTICIPATION CLUSTER
Incentive Programme
Purpose
Target / Eligibility Criteria
Incentive Offering
Incubation Support Programme (ISP)
Encourage partnering with big private sector to develop suppliers and improve their score cards
South African registered legal entities.
Registered higher education or further education institution in partnership with private sector.
Licensed and/or registered science councils in partnership with private sector
50:50 cost-sharing support for large private sector investors.
60:40 cost-sharing support for SMMEs.
Cap = max R10m per financial year over 3 years.

25. BROADENING PARTICIPATION CLUSTER
Incentive Programme
Purpose
Target / Eligibility Criteria
Incentive Offering
Strategic Partnership Programme (SPP)
Encourage partnering with big private sector to develop suppliers capability and capacity thus providing linkages to the strategic partners supply chain
South African registered legal entities with a minimum turnover of R100 million for two consecutive years as per the audited financial statements
At least 60% of the entities being incubated must be at least 51 percent Black owned
50:50 cost-sharing support for large private sector investors.
Cap = max R15m per financial year over 3 years subject to the availability of funds

26. BROADENING PARTICIPATION CLUSTER
Incentive Programme
Purpose
Target / Eligibility Criteria
Incentive Offering
Technology and Human Resources for Industry Programme (THRIP) – Call for applications
To increase the number of people with appropriate skills in the development and management of research-based technology for industry.
South African registered legal entities.
Registered higher education or further education institution in partnership with private sector.
Licensed and/or registered science councils in partnership with private sector
THRIP is a cost-sharing grant of up to R8m  per annum for a period (3) years for approved project engaged in applied research and development in science, engineering and technology

27. Incentive Development and Administration Division (IDAD)
CONTACT DETAILS
Incentive Development and Administration Division (IDAD)
Telephone:
Customer Contact Centre:
website: (Financial Assistance)