Coega Development Corporation CEO, Khwezi Tiya.
The Coega Development Corporation (CDC) achieved for the first time, a double-digit growth in the number of new investors signed in the 2021/2022 financial year with its target exceeded by 86% and the value of pledged investment totalling R557.7 million, chief financial officer Roger Hill said yesterday.
“The investment value signed for the current financial year is R557m against a target of R250m. Seraphim New Energy is one of the investments concluded in the fourth quarter, which contributed to the over-performance for the period under review,” said CDC CEO, Khwezi Tiya.
This was mostly attributed to investors taking up brownfield space in the multi-user facility, and other available facilities.
But Hill warned, “Although the number of signed investors has been exceeded, there remains a challenge with funding for new investors, which might negatively effect performance of investment attraction in the following financial years, if no supplementary or alternative solution is found.”
Most of the signed investors would soon begin construction of their facilities, and this would contribute towards improving the financial sustainability of the organisation.
However, Hill said the CDC’s efforts to attract tenants needed to be supplemented by state funding, but pointed to a “change in the Department of Trade, Industry and Competition’s (Dtic) funding arrangement.
The CDC, he said, was also working on the classification of the Export Processing Zone (EPZ) as a schedule 3 entity, which would enable it to apply for credit guarantees needed to facilitate clients’ needs.
The investment middleman, vital to the Eastern Cape economy, generated revenue of R628.1 million; its coffers boosted as well by the Dtic’s approval for infrastructure funding for investors of R2.5bn for the period 2015-2022.
It achieved a growth in client portfolios of external services of R10.38bn – low hanging fruit from Transnet’s development of the Ngqura Manganese Export Terminal.
The CDC recorded an overall favourable variance of 3% or R6.1m, which it said is primarily attributable to the receipt of a municipal rebate of R23.6m and over-performance in respect of utility charges to tenants of R19.8m.
“This over-performance is offset by under-performance in respect of the rental income of R34.9m. This under-performance in the rental portfolio is due to a combination of factors including termination of leases and construction delays in completing tenant buildings, resulting in delayed occupation,” Hill said.
He said R1.56bn in small, medium and micro-sized enterprises (SMME) spend was achieved, of which R1.31bn accrued to black SMMEs, including black women-owned and youth-owned businesses.
BUSINESS REPORT