Evaluation of AFD’s Sunref Program and Transformational Credit Line to Industrial Development Corporation (IDC) in South Africa (CZA1048 ; CZA1117 ; CZA1120 ; CZA1160)

AFD supported three consecutive projects implemented by the IDC in South Africa between 2012 and 2024, aiming to strengthen IDC’s contribution to reducing the country’s carbon footprint and energy intensity.

Projects CZA1048 & CZA1117 were SUNREF Projects, through which AFD provided dedicated credit lines and technical assistance to support the IDC in developing green financing products for small and medium-sized businesses, thereby contributing to job creation and the energy transition.

SUNREF 1 was highly relevant in the early 2010s aligning with Government’s priorities following the 2007 electricity supply crisis, and with the IDC’s role and strategy within the national green transition framework. From 2015 onwards, however, political shifts and the COVID-19 pandemic negatively impacted the implementation of both projects. In addition, projects performance was hindered by the late start of the technical assistance, internal reprioritizations and reorganizations within the IDC, operational bottlenecks and unattractive commercial terms of the credit lines, leading to limited utilization. Nevertheless, both projects delivered a portfolio of legacy sub-projects, with the IDC playing a key role in financing innovative technologies. Project developers also confirmed that they would not have proceeded without the IDC.

In 2018, building on this experience, AFD and the IDC adopted a transversal approach aimed at supporting the IDC’s institutional and operational transformation. A transformational line of credit, combined with a TA grant, targeted four areas for improvement within the IDC: gender equality, operational efficiency and digitalization, financial management and climate finance initiatives.

The project delivered tangible improvements and strengthened the IDC’s capacity to fulfill its mandate, even though key areas – such as credit risk management and the development of processes and tools for small business finance – could not be fully addressed.