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Investment, Innovation, Impact Partnering with the Private Sector to Deliver Results Karin Finkelston IFC Vice President PowerPoint Presentation
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Investment, Innovation, Impact Partnering with the Private Sector to Deliver Results Karin Finkelston IFC Vice President, Asia Pacific Canberra, Australia, August 21 , 2012. Emerging Markets are the Engines of Longer Term Growth. Source: IMF, October 2011.

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slide1

Investment, Innovation, Impact

Partnering with the Private Sector to Deliver Results

Karin Finkelston

IFC Vice President, Asia Pacific

Canberra, Australia,

August 21, 2012

emerging markets higher risk higher return
Emerging Markets—Higher Risk, Higher Return

Source: IFC analysis based on MSCI information, October 2011

ifc s role
IFC’s Role
  • Promoting open and competitive markets indeveloping countries
  • Supporting companies and other private sector partners where there is a gap
  • Helping to generate productive jobs and deliver essential services to the underserved
  • Catalyzing and mobilizing other sources of finance for private enterprise development
  • Promoting and creating opportunities for women to participate in and benefit from economic activity

IFC is the largest global development institution focused exclusively on the private sector and is a AAA rated investor.

changing dynamics led to new business opportunities
Changing dynamics led to new business opportunities

Opportunities

Trends

Climate Change—a cross-cutting trend

Urbanization

Financial Sector Constraints

Demographic Changes

Multi-polar Growth

Private Sector a Priority

Clean-tech, energy efficiency, renewable energy

Local Financial Market Development

Infrastructure, including Water, Sewage, Energy, and Housing

Health and Education

Rising middle-classes and the Base of Pyramid (BOP) Consumers

Logistics, Irrigation, Supply chain

SMEs, Microfinance, PPPs, South-South investments

Demand for Food and Commodities

ifc fy12 preliminary results and development impact

IFC clients provided 2.4 million jobs in 2010.

  • Globally, between 2008-2010, the number of women employed by IFC clients increased by 14% (to around 31% of the workforce).
  • Last year, IFC clients provided nearly 20m microfinance loans, valued at almost $20b, and 3.3m SME loans valued at over $180b.
  • IFC clients provided:
    • Nearly 42m new residential power connections
    • Over 34m new water connections
    • More than 170m new phone connections
    • Over 22m new gas connections
  • IFC clients purchased nearly $50b of domestic goods and services, and contributed over $20b to government revenues or savings.
IFC FY12 Preliminary Results and Development Impact
  • Investments: 518 new projects in 102 countries
  • Advisory services: $230 million in total project expenditures
  • $20.55 billion in financing: $15.45 billion for IFC’s own account (up 27% on FY11), $5.1 billion mobilized
  • $55.2 billion committed portfolio, representing investments in 1,737 firms
  • Over the last 10 years, IFC made nearly 800 equity investments totaling US$12 billion that delivered a 24% IRR
slide7

IFC Client Example – Australian Junior Mining Partners

  • IFC targets mining companies at the exploration stage to support them as their projects transition through the development cycle.
  • IFC helps companies manage their environmental and social impacts early in the process, develop the project in line with industry best practice, and pursue sustainable development in the mining sector.
  • In turn, our investments support the development of the natural resources sector of the host country and furthers its economic growth.

Ethiopia

Tulu Kapi Gold

$15,000,000

Equity

Equity Investor

2010

Examples of IFC Equity Investments in Australian Junior Mining Companies

Burkina Faso

Morocco

Achmmach Tin

Gryphon Resources

$8,700,000

Equity

$9,800,000

Equity

Equity Investor

Equity Investor

2010

2009

ifc client example macquarie group
IFC Client Example: Macquarie Group

IFC committed US$150 million to Macquarie India Infrastructure Opportunities Fund to provide critical equity capital to developers of private or public-private partnership infrastructure projects in India.

IFC committed US$100 million to the Macquarie - Renaissance Infrastructure Fund, which is jointly managed by Macquarie Group (Australia) and Renaissance Group (Russia) and focused on infrastructure investments in Russia and the Commonwealth of Independent States. The fund has committed financing to transport, power, and telecommunications projects.

IFC invested US$100 million in the Africa Infrastructure Investment Fund 2, an equity fund that promotes the development of basic infrastructure in the region. The fund invested in the Bakwena Platinum Highway toll-road concession in South Africa, which stretches 385 kilometers.

IFC invested in three Macquarie-sponsored funds in Africa, India, and Russia, committing US$350 million in total.

slide9

Innovative Models for PSD: PNG Risk Share Facility

  • Risk share model developed and tested in Africa and brought to PNG by IFC. Plans are underway to broaden the program to a regional level.
  • In PNG, less than 10% of the population has access to finance.
  • In 2011, we partnered with the PNG Government and the World Bank to set up a financial program for SMEs that will help mitigate the default risk that participating banks face by IFC guaranteeing 50 percent of loans that they extend to small and medium enterprises to help increase their access to credit.

The guarantee will help banks extend up to $61 million in new financing to small and midsize businesses.

Bank South Pacific (BSP) is the first institution to participate in the program.

inclusive profitable business solutions ifc client digicel
Inclusive & Profitable Business Solutions: IFC Client Digicel

Global Partnership: IFC helped Digicel offer affordable mobile phone service in countries considered too risky by big operators.

Going into remote markets paid off: Digicel $1.1 bln profit March 2010…

…and revolutionized commerce: Mobile phones connect people with markets across multiple islands and 1000s of miles; Farmers check crop prices on cell phones; villagers safely transfer money via phones.

PNG: telecoms competition adds 0.7 % GDP growth in 2008.

Samoa: Digicel's introduction lets prices drop 60%.

Nauru: coverage jumps from 0 to 90%

“IFC’s Business Edge product will help our retailers better manage and grow their businesses.

This is a win-win proposition for our clients as it will improve customer service and increase access to telecommunications products and services.”

John Mangos, CEO Digicel Papua New Guinea

slide11

Key Milestones of AusAID Partnership

Responding to Private Sector Needs

Highlights

Pacific Microfinance Initiative – 35,000 people in PNG now have access to e-banking services (mobile phone banking and EFTPOS) in rural areas.

Credit bureaus established in Tonga and Vanuatu.

18 significant reforms relating to various aspects of business start-up, operations and alternative dispute resolution in Papua New Guinea, Solomon Islands, Tonga, Vanuatu and Timor-Leste.

Number of days to register a business in Timor-Leste reduced from 83 to 19 days.

In Focus - Public Private Dialogue in Papua New Guinea: National Working Group in Improving Business and Investment Climate in PNG, was launched with IFC support in October, 2011 after a two-year hiatus. As a result of the work, the government allocated dedicated office space to customs officers at PNG Ports so they can operate around-the-clock to speed up customs clearances, removing a bottleneck that slows down the import and export of goods.

In Focus - Access to Finance Program in China: Through the IFC managed Access to Finance program in China, focused on financial inclusion for underserved populations and SMEs in rural areas and frontier regions, between 2006 and 2011 credit information was made available for 774 million individuals, $1.1 trillion of financing to 68 thousand SMEs was enabled by the accounts receivable registry and supported micro-credit providers increased their reach to 70 thousand borrowers.