Armscor initiated fund seeks R350 million to boost black defence industry


Another effort to attract and involve entrepreneurs and industrialists from South Africa’s largest population demographic, in the form of a defence industry enterprise and supplier development fund, comes from Armscor.

The fund, made public in the State-owned enterprise’s tender information portal under the reference ESD Fund/02/2021, has an estimated value of R350 million.

The ESD Fund, is according to information defenceWeb had to request, is an initiative of the Defence Sector Charter Council (DSCC) to appoint “a host and manager”.

The DSCC is, according to a SA National Defence Force (SANDF) statement released earlier this year, a representative body with the aim of expediting transformation and revitalisation of the local defence industry. It will, again according to the statement, ensure consistent implementation of the defence sector code (DSC) for broad-based black economic empowerment, focussing on areas seen as “a challenge in transformation”. These include manufacturing technology, exports and “other technical areas”.

The Armscor tender is a request for quotation (RFQ) inviting submissions from suitably qualified service providers to, among others, receive deposits from contributors (local defence industry companies SA Aerospace, Maritime and Defence Industries Association members) and disburse funds as directed by the DSCC.

The ESD Fund will, according to the Armscor RFQ, fund “black-owned entities in SADI (SA Defence Industry)”, engage in manufacturing promotion initiatives for SADI; fund “innovative black-owned technology entities” either in or related to SADI; “promote development of intellectual property and exploitation in SADI by and in collaboration with black people” as well as support the growth of black business in the local defence industry.

Included in the 12 services listed as the ESD Fund manager’s scope of work   are ensuring small black businesses to be supported comply with “all applicable laws”, ensuring “meaningful participation of designated groups”, assessing commercial viability of business cases for funding and ensuring all projects funded meet DSCC objectives.