Soweto EV founder challenges IDC over rejected funding
· Citizen
A Soweto electric vehicle entrepreneur claims the Industrial Development Corporation (IDC) has “unfairly” denied him funding for his manufacturing venture while backing a white-owned competitor in the same sector.
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Fezile Dhlamini, founder of Green Scooter, this week revealed he spent eight years attempting to secure funding, without success.
Dhlamini claims he invested about R9.5 million over the past decade to build the company, which manufactures and deploys electric three-wheeled vehicles.
Founder accuses IDC of bias after funding rejection
“I built South Africa’s first black-owned electric vehicle company. I have deployed 70+ EVs with blue chip companies, local small and medium enterprises and exported to the [United Arab Emirates],” he said.
He claimed while his applications were turned down as “too early stage” or due to perceived market risks, the IDC approved about R69.9 million in funding for Mellowcabs, a white-owned company that produces similar electric three-wheeled vehicles.
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According to Dhlamini, in May 2018, he walked into the IDC offices with a business plan, a pitch deck and a dream to manufacture electric vehicles in South Africa.
He said an IDC official looked at him and said: “Come back when you have 1 000 vehicle sales.”
Dhlamini said he then built a pre-order website and within weeks, he had 93 pre-orders and 237 pricing inquiries.
Multiple meetings, revised business models and documentation submissions
He claimed his engagement with the IDC involved multiple meetings, revised business models and submissions of financial and technical documentation.
“Between May 2018 and November 2018, I had seven documented meetings at the IDC. In November 2018, they rejected me at the basic assessment stage,” Dhlamini said.
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At one stage in 2019, an IDC executive allegedly directed the project be funded through a combination of grant and loan financing.
But Dhlamini said the directive was never implemented and his application was later rejected.
He lodged a complaint with the public protector in 2021 and submitted requests for information under the Promotion of Access to Information Act to compare the IDC’s assessment criteria.
Unequal treatment compared to competing company
He said the request was denied on the grounds of protecting third-party commercial information. More recently, Dhlamini escalated the matter to parliament.
On 9 March, he filed a formal petition with portfolio committee on trade, industry and competition, alleging systemic bias in development finance decisions.
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Dhlamini said an IDC executive acknowledged “inconsistencies” in the handling of his case.
However, a subsequent response from another executive said required information had not been submitted – a claim he disputes.
Formal petition
Dhlamini said his company currently holds a factory allocation at the Tshwane Automotive Special Economic Zone, but requires development funding to finalise operations.
The IDC did not respond to questions by the time of publication.