Development at What Cost? The Industrial Development Corporation and the Kinetiko Gas Project
The International Energy Agency (IEA) has repeatedly warned that no new fossil fuel projects can be developed if the world is to meet net zero emissions by 2050. In other words, there can be no new coal, oil or gas fields if we want a viable chance at avoiding the global temperature increase limit. Yet, as the world slowly shifts towards a low-carbon economy, proponents of ‘natural gas’ (sometimes called fossil gas) continue to position it as a transition fuel – a supposedly ‘cleaner’ alternative to coal that can ensure energy security while supporting economic growth. This narrative, however, ignores the significant environmental, economic, and reputational risks associated with gas projects. By latching onto the notion of gas as a ‘bridge fuel’, the Southern African region risks locking itself into a high-carbon pathway with the support of its own financial institutions.
In 2024, the Fair Finance Coalition of Southern Africa (FFCSA) published the third report in its Financing Fairly series. The Financing Fairly 2024 report presented the results of FFCSA’s latest round of policy assessments and evaluated the extent to which the policies of public finance institutions in Southern Africa align with international sustainability standards and support a just energy transition. This case study builds on that report by zooming into the finance and investment practices of one such institution – the Industrial Development Corporation (IDC). It examines the IDC’s role in its financial partnership with Kinetiko Energy Ltd to develop South Africa’s largest onshore liquefied natural gas (LNG project): the Kinetiko Gas Project. Situated in Mpumalanga – the country’s mining and pollution hotbed – the Kinetiko Gas Project has attracted significant opposition from civil society due to the potential environmental and socio-economic impacts associated with the project, including its likely contribution to climate change. As a public finance institution, the IDC holds a mandate to promote sustainable industrial development in the region and to advance South Africa’s constitutional and international legal obligations in this regard. This role is particularly critical in the context of the climate crisis, compounded by the country’s energy crisis, as well as the triple challenge of poverty, inequality and unemployment.
As this case study demonstrates, the IDC’s approval and disbursement of financing for the Kinetiko Gas Project is a direct reflection of its continued support for an industry notorious for adverse climate, environmental and human rights impacts. Investment in new gas projects is incompatible with South Africa’s transition to a low-carbon economy and risks undermining any progress the country has made towards achieving its climate goals and commitments under the Paris Agreement. Rather than supporting fossil fuel expansion, the IDC should be prioritizing less-risky investments that deliver sustainable outcomes for people, the environment, and the economy.
It must be noted at the outset that FFCSA engaged with the IDC throughout the research process and provided an opportunity to comment on a draft of this case study. In January 2026, the IDC indicated to FFCSA that it no longer had financial exposure to, or involvement in, the Kinetiko Gas Project, stating that previously disbursed funds had been returned unused. FFCSA sought further clarification regarding the IDC’s prior involvement in the Project and its broader approach to gas investments. However, no response had been received from the IDC at the time of finalising of this case study.
