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Effective Business Strategies at the World Bank Group

Effective Business Strategies at the World Bank Group Trade Winds Conference May 2007 International Development Association Multilateral Investment Guarantee Agency International Finance Corporation International Centre for Settlement of Investment Disputes The World Bank Group

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Effective Business Strategies at the World Bank Group

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  1. Effective Business Strategies at the World Bank Group Trade Winds Conference May 2007

  2. International Development Association Multilateral Investment Guarantee Agency International Finance Corporation International Centre for Settlement of Investment Disputes The World Bank Group 15-20 year loans, with interest, 3-5 year grace period, eligibility based on GNI per capita International Bank for Reconstruction and Development 35 –40 year credits, no interest, 10year grace period, eligibility based on GNI per capita Promotion of sustainable private sector investment in developing countries (financing private sector projects, assistance) Promotion of foreign direct investments into developing countries as global insurer to private investors and advisor to countries on foreign investment Assistance in the mediation or conciliation of investment disputes between governments and private foreign investors

  3. A Quick Word about Procurement Opportunities • IBRD/IDA Lending (FY06 $23.6B) to Foreign Governments (ie, Borrowers) generates international competitively bid contracts (approx. 40,000 per year) • Lucrative business provided a targeted and committed strategy • Best practices: • Get into the pipeline early & focus on your strengths • Review the project documents • Learn the Procurement Rules (thoroughly) • Use local representation / build local partners • Speak language of development

  4. Borrower activity Project Cycle of the World Bank Country Assistance Strategy Project Identification Evaluation Project Preparation Project Supervision Project Appraisal Implementation Loan Negotiations Loan Approval and Signing Joint activity World Bank activity

  5. The Real Reason We’re Here: Private Sector Opportunities in Emerging markets We can’t ignore that emerging economies now account for over half the total world GDP (measured by purchasing power parity)

  6. …..and not just in China and India Forecast Real GDP annual percent change Developing Developing ex. China & India 2008 Source: World Bank

  7. How Can You Mitigate Risk in these Growth Markets? World Bank Group Private Sector Arms • International Finance Corporation (IFC) • Triple bottom line: people, planet, profits • AAA Institution • Provides loans and equity to viable projects • Mobilizes capital from multiple sources • Provides technical assistance and advisory services to companies and governments • Multilateral Investment Guarantee Agency (MIGA) • Guarantees foreign direct investment (FDI) into developing countries • Technical services to attract and retain FDI

  8. Defining Characteristics of the IFC • Participates only in private sector ventures • Shares same risks as other investors • A Long-term partner • Invests in equity • Has market pricing policies • Does not accept government guarantees • Is profit oriented

  9. IFC’S Value Added • Global Reach & Expertise: Doubled overseas staff presence in past 4 years (1,200+ today) • IFC owns professional relationships with most major emerging market corporates • IFC presence reassures: Foreign investors, Local partners and Governments  Stamp of Approval • Reputation and standing to help negotiations • Measure of political risk cover • Catalyst for other investors and lenders

  10. IFC Products & Services • Loans • long-term, local currency, etc. • Equity & Quasi-equity • common or preferred stock, sub-debt, asset- and mortgage-backed securities • Loan Participations (B-loans) • Mobilized capital via the sale of participation in IFC’s own loans • Client Risk Management Products • Asset and liability tools, eg, currency and interest rate swaps • Guarantees & Partial Credit Guarantees • Technical Assistance & Advisory Services (TAAS) • Access to finance, Business enabling, Value Added to firms (eg, corporate governance), sustainable development and investment banking services

  11. Our Role • Leverage position in the U.S. Executive Director’s office to help open doors and understand business opportunities • Counseling on procurement strategies, political dynamics, grievances, etc • Business Development to help U.S. industry better leverage the IFC/MIGA for emerging market operations • Honest broker b/w sponsor/provider and IFC/MIGA investment officers • Basic structuring and deal proposal consulting

  12. CONTACT INFO William Center Advisor & Director of Business Liaison 202-458-0120 wcenter@worldbank.org Bryan Lopp Business Liaison 202-473-2742 aellis4@worldbank.org

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