Your Partner in Development
STATUS AND OWNERSHIP
Sudan Development Corporation (SDC), established in 1974, is the leading financial institution involved with investment and the provision of finance for development in the Sudan. SDC, as defined by its Act, is an autonomous corporate body having perpetual succession, a common seal, and may sue and be sued in its own name.
Authorized Capital = U.S.$500 Million
Paid Up Capital = U.S. $200 Million
SDC is wholly owned by the Government of the Sudan and is managed by a Board of Six Directors.
I. Contribute to the promotion and acceleration of the economic development of the Sudan through the provision of financial and technical assistance to new and existing revenue-bearing projects/companies.
II. Encourage the participation of capital and skills - domestic and foreign - for the economic development of the Sudan with the objective of contributing directly or indirectly to the increase in earning and / or saving of foreign exchange through export promotion or import substitution.
III. Initiate and encourage the extension of technical and managerial assistance in the promotion and development of revenue-bearing projects, whether or not such projects shall be financed by SDC.
IV. Act as a coordinating agent in projects or joint ventures; by providing local currency components of the financing and / or entrepreneurship and supplementing the appropriate technology and foreign finance from Arab, Asian and other international sources.
In pursuance of its objectives the Corporation may:
I. Promote and identify opportunities in new development projects in the Sudan.
II. Invest directly in any project, which proves to be financially sound, commercially viable and technically feasible.
III. Provide administrative, technical and financial assistance for the development, expansion or operatin of projects/companies.
IV. Assist in streamlining the operation of existing development projects to achieve optimum utilization of planned capacities.
Sudan Development Corporation within the context of its investment policy :-
I. Manages its participations and capital assets in accordance with the principles of sound business practice within the framework of national development policies.
II. Uses its best endeavours to attract foreign finance and mobilize internal financial resources.
III. Seeks to diversify its portfolio of investment among different economic sectors and endeavours to extend its range of activity to cover the different regions of the country.
IV. Extends its assistance to revenue-bearing projects and companies in the fields of agriculture, industry, agro-industry, mining and services.
V. Accords priority to projects aiming at import-substitution and export promotion.
VI. Participates only in projects, which prove through feasibility studies and appraisal reports, to be technically feasible, commercially viable, economically sound and contribute to the development of the National Economy.
VII. Renders assistance only to projects, which demonstrate the availability of competent management and the commitment of adequate finance including cost over-runs.
I. SDC requires sponsors to make sufficient contribution to the financing of projects to ensure their commitment to the success of the projects.
II. SDC conducts its operations on a self-sustained and profitable basis.
III. SDC normally acquires a share in the equity capital of any one project.
IV. SDC shareholding shall not exceed 40% of the total capital of the project.
V. SDC may dispose of its shares or fade out its investment in any one project whenever if deems appropriate.
VI. The total amount of SDC's financial assistance in the form of equity, guarantees and other forms, to any one project shall not exceed 50% of the total cost of the project and 10% of the net worth of the Corporation.
VII. Loans shall be repayable in the currency or currencies in which they are extended or in any other currency or currencies acceptable to SDC,
VIII.SDC shall make adequate provisions against potential losses and build up reserves to a level consistent with sound financial practices taking into account the size and quality of its portfolio of equity participation, loans and guarantees. Within these limitations, SDC shall seek to pay fair dividends to the Government while maintaining satisfactory prospects for the continuation of a sound liquidity situation in local and foreign currencies.
IX. SDC shall not bear the risks resulting from foreign exchange fluctuations in respect of loans. The borrower(s) shall bear the costs of such risks.
X. SDC shall not incur or permit any of its subsidiaries to incur any long-term debt from outside sources whereby the total indebtedness of SDC and all its subsidiaries exceeds three times the capital and reserves of SDC and its subsidiaries.
XI. SDC shall seek to obtain the best return on its short-term investments while reasonably diversifying their maturities in accordance with financial projection.
XII. SDC shall be reimbursed for all its preinvestment expenses.
SDC provides loans and other forms of financial assistance as follows ;-
a) Equity Participation in Project Capital.
b) Islamic Modes of Finance.
Murabaha - Financial assistance in which a client desirous of purchasing equipment, goods, raw materials etc., requests the financial institution to acquire these items on his behalf at cost and sells them to the client on a cost-plus negotiable profit margin basis. Capital and profit will be payable on terms and conditions to be agreed upon.
Musharaka (Participation) - Financial assistance, which is formally a limited partnership, whereby both the financial institution and the customer provide capital for a specific project. Another possibility is the participation of the financial institution in an existing enterprise by means of a capital contribution. The pro-rata distribution of profits between the financial institution and the customer is subject to a contract between the parties. Losses are shared by the partners in direct proportion to their capital contribution. The financial institution may participate in the management of the venture but it may also waive this right.
Musharaka is based on either permanent or diminishing participation. In the latter form the participation of the financial institution diminishes through time.
Leasing - This is a mode of financial assistance under which production and/or services facilities are provided by SDC and leased to the client on terms and conditions to be agreed upon. Normally, this includes rentals, operational costs and maintenance charges to be paid by the client.
Guarantees - In certain circumstances the Corporation may further assist a project by acting as a guarantor within the limits of total finance indicated above.
THE ROLE OF SDC
In addition to the financial assistance listed above, the Corporation plays a leading role in all stages of the project cycle including the operational stage. The continuous support of the corporation may include:
I. Assistance during the negotiation stages to ensure that the project company will be structured on a sound economic, financial and legal basis.
II. Participation on the Board of Directors of these project companies.
III. Participation in the promotion, formulation, establishment and commissioning of these project companies-
IV. Provision of contracts inside and outside the Sudan to facilitate and expedite implementation of projects.
V. Spearheading of reappraisal and market surveys and studies during the operational stage.
VI. Monitoring and reviewing of operations throughout the project life,
VII. Provision of technical assistance to new or operational projects whether or not financed by SDC.
RELATIONS WITH FOREIGN INSTITUTIONS
SDC maintains a wide network of relationships with foreign finance institutions, which permits it to serve as a link between Sudanese project sponsors and foreign technical or management partners, investors and financial sources.
THE LOCAL SPONSOR
I. Several projects co-financed by the Corporation are initiated by local sponsors seeking assistance. In cases where a project is identified by the Corporation, one of the first steps is to find a suitable local sponsor. Such a local sponsor may be an individual, a group of individuals, partnership, or a corporate body.
II. The local sponsor should be ready to participate in the development of the project and ultimately to become the owner of the project.
III. In cases where 3 project is initiated by a local sponsor, he / she must submit a preferability study outlining the principal characteristics of the proposed project, on the basis of which the corporation shall decide the further steps to be taken.
IV. The local sponsor will also be expected to assist the technical partner in planning the project and to acquire a reasonable stake in the share capital of the project company to be established.
FEES AND CHARGES
Financial assistance is advanced at a profit margin determined from time to time by the Board of Directors.
Fees chargeable by SDC include: "Murabaha" margin; an investigation fee of 1/2 percent charged on total financial assistance to a project; a commitment fee of 1 percent payable on the undisbursed portion of a loan; guarantee fees at a rate to be determined by the Board of Directors; charges in respect to technical assistance are determined on the basis of mutual agreement.
a) All financial assistance rendered by SDC should be evidenced by authenticated documents.
b) SDC assists projects implemented by enterprises having distinct legal entity.
c) Subject to the type of assistance rendered, any of the following legal documents are required wherever relevant: Memorandum and Articles of Association; Certificate of Registration; Shareholder's Agreement; "Murabaha" Agreement; "Musharaka" Agreement; Lease Agreement; Loan Agreement; Technical Cooperation Agreement; and Management Agreement.
To protect its own financial position, SDC shall take adequate security measures towards any loan, murabaha, or guarantees and in this respect shall ascertain that any of the following requirements for collateral security are fulfilled:-
a) First mortgage on the borrower's registered property including land, buildings, machines and other fixed assets and / or a lien on the floating assets.
b) Bank guarantee from a reputable bank acceptable to SDC or counter guarantee.
c) In addition SDC may in its absolute discretion: Demand collateral security from a third party or a counter guarantee; Earmark certain present or future assets of the borrower as security with regard to the claims of the Corporation;
Demand post-dated cheques.
HOW TO APPROACH THE CORPORATION FOR SUPPORT
Initial contacts with the Corporation should be made by way of a formal letter supported by: Prefeasibility study on the marketing, technical and financial aspects of the project; Name of the applicant's bankers and, if a company or a Partnership, the Registration Certificate, Memorandum and Articles of Association or Partnerships Deed; Licences, permits and concessions which will be available to the project; Audited accounts for previous years if any. (for existing companies); Other information and documents SDC may deem necessary.