IFC 2001 Corporate Slideshow

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(No Transcript)
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IFC Part of theWorld Bank Group
IFC is owned by its 176 member countries, which
collectively determine policies.
International Finance Corporation, 1956
International Bank for Reconstruction and
Development, 1945
Multilateral Investment Guarantee Agency, 1988
International Centre for Settlement of Investment
Disputes, 1966
International Development Association, 1960
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World Bank Group Institutional Roles

• IBRD lends to governments of middle-income
  developing countries.
• IDA provides concessional loans to governments of
  the poorest developing countries.
• ICSID facilitates the settlement of investment
  disputes between governments and foreign
  investors.
• MIGA provides guarantees to foreign investors
  against noncommercial risk.

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IFCs Mission

• To promote sustainable private sector investment
  in developing countries, helping to reduce
  poverty and improve peoples lives

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IFC Products and Services

• To assist private enterprise in developing
  countries, IFC
• Provides loans and equity for viable projects
• Mobilizes capital from other sources
• Provides technical assistance and advisory
  services

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Capital Stock Held by IFCs Shareholders
(As of June 30, 2004)
Five largest 45 Other countries 55
United States 23.68
Japan 5.88
Other countries 54.99
Germany 5.37
France 5.04
176 Member Countries
United Kingdom 5.04
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Financial Strength
(As of June 30, 2004)

• Paid-in capital 2.4 billion
• Total capital (net worth) 7.8 billion
• Capital strength IFCs capital resources
  currently stand at 48 percent of risk-weighted
  assets, well above the 30 percent minimum for
  this ratio required by the capital adequacy
  policy.

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International Borrowings

• AAA/Aaa rating
• Borrowed 3 billion equivalent in FY 2004 in the
  international markets
• During FY04, IFC issued bonds in 9 currencies
  U.S. dollars, Japanese yen, Australian dollars,
  euros, Colombian pesos, Hong Kong dollars,
  Peruvian soles, Hungarian forints, and British
  pounds.

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IFCs Operating IncomeFY 20002004

US millions
982
528
380
241
161
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Defining Characteristics of IFC

• Participates only in private sector ventures
• Shares same risks as other investors
• Invests in equity
• Has market pricing policies
• Does not accept government guarantees
• Is profit oriented

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IFCs Beneficial Role

• IFC presence reassures
• Foreign investors
• Local partners
• Governments
• Reputation and standing to help negotiations
• Measure of political risk cover
• Catalyst for other investors and lenders

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What is Project Finance?

• Providers of funds look primarily to project cash
  flow to service their loans and provide a return
  on equity.
• Security for financing consists of assets of
  project, including contracts and cash flow
• Terms of financing tailored to cash flows
• Each project has unique risk/return profile.
• The strength of expected revenue stream secures
  project debt.

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Investors Look for

• Competent sponsors and management
• Commercially strong/cost-competitive projects
• Robust financing plans/appropriate financing
  structure
• Completion guarantees and security
• Sound environmental and social practices
• Appropriate sharing of risks and rewards
• Market-related fees and rates

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Project Cycle and Timing
Internal to IFC
As Seen by Client
Initial Discussions
Initial Review Authorization to Appraise
Management Approval
Mandate Letter Appraisal Financing Negotiations
Board Approval
Info. Memo and Syndication Legal Documentation
Disbursement
Supervision/Evaluation
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Services Offered by IFC

• Financial products loans, equity, quasi-equity,
  structured finance (including guarantees), and
  risk management facilities
• Resource mobilization loan participations and
  securities offerings
• Technical assistance and advisory services on
  environmental/social performance, links with
  small businesses, corporate governance, capacity
  building, investment climatemany other issues

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IFC Financing in FY04
Includes loans, equity, structured finance, risk
management products
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IFC Committed Financing, FY04 By Region
2,030
1,593
763
514
407
236
91
Total committed IFC financing 5.63
billion (4.75 billion for IFCs account, 880
million held for others)
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IFC Investments FY04, by Sector
Total Commitments 5.63 billion
Gross investments, including financing for IFCs
own account and loan syndications.
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IFC Portfolio as of June 30, 2004By Region

US billions
6.08
4.39
2.90
1.59
1.53
1.11
0.35
Total for IFCs account 17.9 billion
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IFC Portfolio FY04, by Sector
Total IFC Portfolio 17.9 billion IFCs own
account only. An additional 5.5 billion is held
and managed for participants.
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IFC Investment Guidelines

• A project must be
• In the private sector
• Financially, economically, environmentally, and
  socially sound
• 25 percent maximum IFC's share of project cost
• Investment size
• 1 million to 100 million in standard projects
• Investments in local financial institutions often
  support on-lending to small and medium enterprises

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Financial Products
IFC Loans

• Currency of choice
• Fixed or floating market-rate pricing
• Features
• Tailored to cash flow
• Long maturities, usually 7 to 12 years
• Appropriate grace periods

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IFC Equity Investments
Financial Products

• Equity investments based on anticipated return
• IFC not normally the largest shareholder (not
  more than 35 percent)
• Passive investor
• Often considered local shareholder
• Long-term investor of 8 to 15 years
• Public listing the preferred exit mechanism

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IFC Quasi-Equity Financing
Financial Products

• Convertible debentures
• Subordinated loans
• Income warrants
• Other hybrid instruments
• Appropriately priced

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IFC Risk Management
Financial Products

• Products swaps, options, forward
• contracts
• Purpose helps client companies hedge interest
  rate, currency, or commodity price
  exposureimproving their credit and profitability

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Structured Finance
Financial Products

• Products partial credit guarantees and
  securitizations in local or foreign currency
• Purpose allows clients to diversify funding,
  extend maturities, and obtain financing in their
  currency of choice helps develop local capital
  markets

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IFCs Indirect Financing
Financial Products

• Credit and equity lines
• Venture capital
• Leasing
• Emphasis on investments in local financial
  institutions that on-lend to small and medium
  enterprises

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IFC Loan Syndications
Resource Mobilization

• Agreement with borrower loan funded by IFC
  and participant banks
• Benefits participant banks receive
• Reduced risk
• Exemption from country-risk provisioning
• Immunity from taxation
• Extensive emerging-market experience
• Detailed preinvestment appraisal
• Sound due diligence and ongoing supervision

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Global Product Groups

• IFC-World Bank jointly managed departments
• Information and Communication Technologies
• Oil, Gas, Mining, and Chemicals
• Private Sector Development, including Foreign
  Investment Advisory Service
• Small and Medium Enterprises

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IFCs Technical Assistance and Advisory Services

• Small and medium enterprises
• Environmental/social performance
• Corporate governance
• Investment climate
• Financial sector
• Infrastructure

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Technical Assistance Trust Funds
Technical Assistance

• Purpose To promote private sector growth in
  developing countries through technical
  assistance.
• Funding Donor governments, development
  institutions, and the World Bank Group
• Eligible countries loan IFCs developing member
  countries of interest to donors
• Management IFC, under its own operating
  procedures and agreements with donors

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Technical Assistance Trust Funds
Technical Assistance

• Benefits
• Targets development objectives
• Provides donors with an effective instrument to
  promote development
• Enhances links among donors, recipients, member
  countries, and IFC
• Program scope
• Cumulative contributions of 931 million since
  1988
• More than 1,380 assignments approved
• Broad program coverage
• Funds many of IFCs technical assistance
  initiatives

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Small and Medium Enterprises
Technical Assistance

• Operations Multidonor SME facilities in
  developing regions Capacity Building Facility
  IFC-IDA partnership in Sub-Saharan Africa
• Focus Business environment access to capital
  and business development services links to
  large-scale investment projects
• Services Tailored to local needs

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Environmental and Social Development
Technical Assistance

• IFCs Leadership
• Promoting clients commercial success through
  sustainable practices
• Catalyzing investments in projects with
  environmental benefits
• Identifying and disseminating international best
  practice
• Equator Principles IFCs safeguards being
  rapidly adopted by global financial institutions

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Environmental and Social Development
Technical Assistance

• Sustainable Business Assistance Program
  Multidonor facilities promote environmental
  innovation, corporate citizenship, and
  sustainable financial markets
• Expertise for economic benefits on energy
  efficiency, carbon finance, HIV/AIDS,
  biodiversity, and other key issues.

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Corporate Governance
Technical Assistance

• Assistance to clients IFC helps companies and
  financial institutions improve their governance
• A global role guidance to regulators, stock
  markets, members of boards collaboration with
  other multilaterals on conferences and
  methodology

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Investment Climate Research
Technical Assistance

• Joint IFC-World Bank research on climate for
  business in developing countries.
• Annual Doing Business report provides comparative
  indicators on business regulation in more than
  140 countries.
• Investment Climate Surveys and Assessments also
  provide detailed data for individual countries.

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Foreign Investment Advisory Service
Technical Assistance

• FIAS completed 60 advisory assignments in FY
  2004 since 1985, it has assisted more than 130
  countries.
• Advises governments on foreign investment laws,
  policies, regulations, programs, and institutions
• Provides advice on investment promotion
  strategies and institutions

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Financial Sector
Technical Assistance

• IFC helps strengthen financial institutions and
  securities markets
• Technical assistance for government and private
  sector clients
• Programs include Financial Markets Advisory
  Services and Sustainable Financial Markets
  Facility

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Infrastructure Public-Private Partnerships
Technical Assistance

• IFC Advisory Services Assists governments on
  transactions that privatize infrastructure
• The Municipal Fund IFC-World Bank pilot
  initiative to invest at municipal level, focusing
  on infrastructure

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IFC Staff Profile

• Over 2,200 staff almost 1,000 in the field
• More than 125 different nationalities
• Specialized skills
• Investment operations
• Private sector development
• Environmental and social review
• Country and industry expertise
• Financial and economic training
• Legal

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IFCs Regional OperationsFY04

• Sub-Saharan Africa
• East Asia and the Pacific
• South Asia
• Europe and Central Asia
• Latin America and the Caribbean
• Middle East and North Africa

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IFC Project Financing
Sub-Saharan Africa
Commitments, USmillions
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FY04 Investments
Sub-Saharan Africa

• Committed 407 million in financing for 25
  projects in 12 countries
• Project financing (for IFCs own account)
• Loans 189 million
• Equity quasi-equity 135 million
• Structured finance and risk mgt. 82 million
• Loan syndications 1 million

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FY04 Technical Assistance
Sub-Saharan Africa

• Africa Project Development Facility
• IFC-IDA pilot program for micro, small, and
  medium enterprises
• IFC Against AIDS
• Global Business School Network
• SME Solutions Center, Madagascar
• South East Africa Tourism Investment Program

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Regional Portfolio for IFCs account FY04
Sub-Saharan Africa

• Largest Country Exposures (millions of U.S.
  dollars)

• Nigeria 290
• South Africa 225
• Mozambique 147
• Cameroon 147
• Kenya 127

• Largest Sectors

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IFC Project Financing
East Asia the Pacific
Commitments, USmillions
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FY04 Investments
East Asia the Pacific

• Committed 763 million in financing for 40
• projects in 7 countries
• Project financing (for IFCs own account)
• Loans 424 million
• Equity and quasi-equity 242 million
• Structured finance and risk mgt. 64 million
• Loan syndications 33 million

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FY04 Technical Assistance
East Asia the Pacific

• Multidonor facilities working with SMEs
• China Project Development Facility
• Mekong Private Sector Development Facility
• Pacific Enterprise Development Facility
• Program for Eastern Indonesia SME Assistance
• Corporate governance
• Sustainability research, conferences
• Training for financial institutions

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Regional Portfolio for IFCs account FY04
East Asia the Pacific

• Largest Country Exposures (millions of U.S.
  dollars)

• China 779
• Thailand 468
• Indonesia 467
• Philippines 435
• Republic of Korea 230

• Largest Sectors

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IFC Project Financing
South Asia
Commitments, USmillions
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FY04 Investments
South Asia

• Committed 514 million in financing for 19
• projects in 5 countries
• Project financing (for IFCs own account)
• Loans 332 million
• Equity and quasi-equity 64 million
• Structured finance and risk mgt. 9 million
• Loan syndications 109 million

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FY04 Technical Assistance
South Asia

• SouthAsia Enterprise Development Facility
• Promoting south-to-south investments
• Links between major investments, SMEs
• Public-private partnerships in infrastructure
• Helping banks increase financing of SMEs
• Investment climate advice

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Regional Portfolio for IFCs account FY04
South Asia

• Country Exposures (millions of U.S. dollars)

• India 1,136
• Bangladesh 133
• Sri Lanka 129
• Nepal 51
• Maldives 28
• Bhutan 10

• Largest Sectors

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IFC Project Financing
Europe Central Asia
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FY04 Investments
Europe Central Asia

• Committed 2.03 billion in financing for 65
• projects in 17 countries
• Project financing (for IFCs own account)
• Loans 1,330 million
• Equity and quasi-equity 336 million
• Structured finance and risk mgt. 1 million
• Loan syndications 363 million
• Includes BTC Pipeline

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FY04 Technical Assistance
Europe Central Asia

• Multidonor facilities SMEs, corporate
  governance, infrastructure
• Private Enterprise Partnership
• Southeast Europe Enterprise Development
• Balkan Infrastructure Development Facility
• Investment climate
• Financial market development
• Privatization and post-privatization
• Links between major investments, SMEs
• Public-private partnerships

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Regional Portfolio for IFCs account FY04
Europe Central Asia

• Largest Country Exposures (millions of U.S.
  dollars)

• Russian Federation 1,188
• Turkey 885
• Romania 280
• Bulgaria 266
• Kazakhstan 167

• Largest Sectors

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IFC Project Financing
Latin America the Caribbean
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FY04 Investments
Latin America the Caribbean

• Committed 1.59 billion in financing for
  45 projects in 16 countries
• Project financing (for IFCs own account)
• Loans 996 million
• Equity and quasi-equity 184 million
• Structured finance and risk mgt. 38 million
• Loan syndications 374 million

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FY04 Technical Assistance
Latin America the Caribbean

• LAC SME Facility
• Capital market development
• Investment climate
• Corporate governance
• Sustainability / corporate social responsibility
• Links between major clients and SMEs

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Regional Portfolio for IFCs account FY04
Latin America the Caribbean

• Largest Country Exposures (millions of U.S.
  dollars)

• Brazil 1,316
• Mexico 1,068
• Argentina 817
• Colombia 401
• Peru 338

• Largest Sectors

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IFC Project Financing
Middle East North Africa
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FY04 Investments
Middle East North Africa

• Committed 236 million in financing for 18
• projects in 8 countries
• Project financing (for IFCs own account)
• Loans 125 million
• Equity and quasi-equity 74 million
• Structured finance and risk mgt. 37 million

Includes LMN Holdings
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FY04 Technical Assistance
Middle East North Africa

• Multidonor facilities working with SMEs
• North Africa Enterprise Development
• Private Enterprise Partnership for the Middle
  East
• Investment climate
• Capacity building for financial institutions
• Links between major investments, SMEs
• Training for Iraqi businesswomen

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Regional Portfolio for IFCs account FY04
Middle East North Africa

• Largest Country Exposures (millions of U.S.
  dollars)

• Pakistan 354
• Egypt 307
• Morocco 84
• Jordan 83
• Algeria 74

• Largest Sectors

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IFC Contacts

• International Finance Corporation
• 66, avenue dIéna
• 75116 Paris
• France
• Wolfgang Bertelsmeier Giorgio Ambrosetti
• Special Representative, Europe Research Analyst
• Tel [phone] Tel [phone]
  33 64
• Fax [phone] Fax [phone]
  71
• E-mail wbertelsmeier_at_ifc.org E-mail
  gambrosetti_at_ifc.org

http//www.ifc.org