IFC Donor Funded Operations

Presentation to Norwegian Dialogue

May 13, 2004

IFC Donor Funded Operations

Presentation to Norwegian Dialogue

May 13, 2004

International Finance Corporation

IFC’s Donor Funded Operations (DFOs)

In addition to the Technical Assistance In addition to the Technical Assistance Trust Funds Program (TATF) IFC programs Trust Funds Program (TATF) IFC programs supported by Donors include:supported by Donors include:• Regional SME FacilitiesRegional SME Facilities• Sustainable Business Assistance ProgramSustainable Business Assistance Program• Advisory Services including:Advisory Services including:

• Foreign Investment Advisory Services (FIAS)Foreign Investment Advisory Services (FIAS)• Private Sector Advisory Services (PSAS)Private Sector Advisory Services (PSAS)

• Private Enterprise Partnership (PEP) in FSU/MongoliaPrivate Enterprise Partnership (PEP) in FSU/Mongolia• Financing Facilities – Iraq SBFF and Balkans Financing Facilities – Iraq SBFF and Balkans

InfrastructureInfrastructure• Norway/Bank Group TF for Private Sector and Norway/Bank Group TF for Private Sector and

InfrastructureInfrastructure

IFC-Managed SME IFC-Managed SME FacilitiesFacilities

• Program has more than doubled in Program has more than doubled in last 3 years (new one in the Middle last 3 years (new one in the Middle East – PEP-ME covering Yemen, Iraq, East – PEP-ME covering Yemen, Iraq, Afghanistan and West Bank/Gaza)Afghanistan and West Bank/Gaza)

• $31 million annual operating budget $31 million annual operating budget (IFC funds matched 4:1)(IFC funds matched 4:1)

• 90% of countries served are IDA 90% of countries served are IDA eligibleeligible

SME Capacity Building SME Capacity Building FacilityFacility

• Supports pilots and partnershipsSupports pilots and partnerships• Incubator role broadens WBG’s SME Incubator role broadens WBG’s SME

productsproducts• $7.1 m annually from IFC net income $7.1 m annually from IFC net income

(Approx 70 active projects)(Approx 70 active projects)• Tool for building relationships with Tool for building relationships with

outside partners, leveraging them to outside partners, leveraging them to benefit WBG operations benefit WBG operations (ACCION, FUNDES, (ACCION, FUNDES, SWISSCONTACT, SWISSCONTACT, SEWA, etc)SEWA, etc)

IFC’s Sustainable Business Assistance

Program• Objective – Expand IFC’s support for environmental and Objective – Expand IFC’s support for environmental and social sustainabilitysocial sustainability

• Address 3 core areas of IFC’s work:Address 3 core areas of IFC’s work:

• Consistent with key Johannesburg commitments to Consistent with key Johannesburg commitments to improve the quality of people’s lives:improve the quality of people’s lives:• Cross-cutting issues: “actively promote corporate responsibility and Cross-cutting issues: “actively promote corporate responsibility and

accountability”accountability”• Pollution, water and sanitation, biodiversity, clean energyPollution, water and sanitation, biodiversity, clean energy

• Total funding needed of $55 m over 5 years of which IFC Total funding needed of $55 m over 5 years of which IFC will contribute $10 m will contribute $10 m

Mainstream project-related Mainstream project-related workwork

Corporate Citizenship Facility (CCF)Corporate Citizenship Facility (CCF)

Capacity building in Capacity building in financial marketsfinancial markets

Sustainable Financial Markets Sustainable Financial Markets Facility (SFMF)Facility (SFMF)

Environmental projectsEnvironmental projects Environmental Opportunities Facility Environmental Opportunities Facility (EOF)(EOF)

Corporate Citizenship Facility (CCF)

• Support IFC clients and wider private Support IFC clients and wider private sector where there is a demand for sector where there is a demand for assistance in three areas:assistance in three areas:• Engaging with stakeholdersEngaging with stakeholders

• Community development, consultation and Community development, consultation and engagement, distribution of benefits, local engagement, distribution of benefits, local economic growtheconomic growth

• Employees and employmentEmployees and employment• Employment practices, HIV / AIDS, employee Employment practices, HIV / AIDS, employee

ownershipownership• Environmental stewardshipEnvironmental stewardship

• Footprint, externalities, global impactsFootprint, externalities, global impacts

Sustainable Financial Markets Facility (SFMF)

Enhance the environmental and social development impact of IFC’s investments in and via financial intermediaries

Help the financial sector to use sustainability as a tool to build better businesses and increase long-term competitiveness

Increase the quality and amount of environmentally and socially responsible investment in developing countries

Improve the capacity of IFC’s financial intermediaries to operate in an environmentally and socially sustainable manner

Strategically support and influence the sustainability agenda in the broader financial community

Core Objectives

Environmental Opportunities Facility

(EOF)• Focus on innovative projects that generate Focus on innovative projects that generate

primarily local environmental benefitsprimarily local environmental benefits• Overcome uncertainty associated with new Overcome uncertainty associated with new

markets,markets,new business models, and new technologiesnew business models, and new technologies

• Two types of support:Two types of support:• Project Preparation -- Grant funding for preparation of Project Preparation -- Grant funding for preparation of

business plans, market assessments, etc.business plans, market assessments, etc.• Investment Funding – Flexible financing products:Investment Funding – Flexible financing products:

• Market-rate funding for risky, small venturesMarket-rate funding for risky, small ventures• Concessional financing tailored to innovative Concessional financing tailored to innovative

projectsprojects• Seed capital for post R&D technologies and project Seed capital for post R&D technologies and project

developersdevelopers

• Emphasis on partnerships with financial Emphasis on partnerships with financial intermediaries, local institutions, multilaterals, intermediaries, local institutions, multilaterals, bilateralsbilaterals

IFC Advisory Services

• Foreign Investment Advisory Service Foreign Investment Advisory Service (FIAS)(FIAS)• Founded in 1985Founded in 1985• Works only at request of client governmentWorks only at request of client government• IFC and World Bank contribute 35-40% of IFC and World Bank contribute 35-40% of

fundingfunding

• Private Sector Advisory Services Private Sector Advisory Services (PSAS)(PSAS)• Advisory and Transaction specialistsAdvisory and Transaction specialists

• Lawyers, Technical, Environmental, Social, Lawyers, Technical, Environmental, Social, Marketing, AuditingMarketing, Auditing

Private Enterprise Partnership (PEP) in

the FSU• IFC TA in the FSU region began with the creation of IFC TA in the FSU region began with the creation of

the private sector through privatization and land the private sector through privatization and land reform in 1991reform in 1991

• In May 2000 IFC’s Board approved the creation of PEP In May 2000 IFC’s Board approved the creation of PEP to expand IFC’s TA in the FSU work on:to expand IFC’s TA in the FSU work on:

• Promoting private sector investment with emphasis on foreign Promoting private sector investment with emphasis on foreign direct investment (FDI).direct investment (FDI).

• Supporting the growth of SMEs, particularly through building Supporting the growth of SMEs, particularly through building viable financial intermediaries.viable financial intermediaries.

• Improving the business enabling environment, with emphasis on Improving the business enabling environment, with emphasis on corporate governancecorporate governance

• In October 2002 IFC’s Board reviewed the progress of In October 2002 IFC’s Board reviewed the progress of PEP and extended it through 2006PEP and extended it through 2006

Norwegian TF for Private Sector and

Infrastructure• NTF-PSI covers Bank GroupNTF-PSI covers Bank Group• Established August 2002Established August 2002• Designed to:Designed to:

• Align Norwegian priorities with Bank Group Align Norwegian priorities with Bank Group Private Sector Development Strategy (PSD)Private Sector Development Strategy (PSD)

• Improve dialogue between Norway and the Improve dialogue between Norway and the Bank Group on PSDBank Group on PSD

• Improve coordination between Bank and IFC on Improve coordination between Bank and IFC on PSD initiativesPSD initiatives

• Efficiently and transparently allocate Efficiently and transparently allocate Norwegian support of PSD activities in the Bank Norwegian support of PSD activities in the Bank Group including global/regional PSD programsGroup including global/regional PSD programs

Norwegian TF for Private Sector and

Infrastructure• Initial funding of $7.1 MillionInitial funding of $7.1 Million• Second year funding of $8.0 mSecond year funding of $8.0 m• Third Year….Third Year….• Call for Proposals targeting:Call for Proposals targeting:

• Investment Climate and GovernanceInvestment Climate and Governance• Infrastructure Service Delivery to the PoorInfrastructure Service Delivery to the Poor• Existing global/regional programsExisting global/regional programs

• Screening Criteria:Screening Criteria:• 50% of the funds for Sub-Saharan Africa50% of the funds for Sub-Saharan Africa• Poor Countries – Bottom three categories of ODA Poor Countries – Bottom three categories of ODA

DAC listDAC list• Fit with Norwegian priorities and PSD StrategyFit with Norwegian priorities and PSD Strategy

Contact and Reference Links

IFC TFs - IFC TFs - Fred Wright, Principal Project Officer, CTATFFred Wright, Principal Project Officer, CTATFTelephone: Telephone: 202-473-6076202-473-6076

E-mail:E-mail: fwright@ifc.orgfwright@ifc.orgNTF-PSINTF-PSI Marianne Bergstrom, Operations Officer, INFCSMarianne Bergstrom, Operations Officer, INFCS

Telephone: Telephone: 202-473-O630202-473-O630E-Mail:E-Mail:

mbergstrom@worldbank.org mbergstrom@worldbank.org

External web sites: www.ifc.org and www.worldbank.org External web sites: www.ifc.org and www.worldbank.org IFC Annual report on DFOs www.ifc.org/tatfIFC Annual report on DFOs www.ifc.org/tatfSME Facilities www.ifc.org/sme SME Facilities www.ifc.org/sme Environmental and Social Facilities www.ifc.org/enviroEnvironmental and Social Facilities www.ifc.org/enviro

Private Enterprise Partnership www.ifc.org/pepPrivate Enterprise Partnership www.ifc.org/pepFIAS www.ifc.org/fiasFIAS www.ifc.org/fiasNTF-PSI – NTF-PSI –

http://wbln0018.worldbank.org/infrastructure/ntfpsi.http://wbln0018.worldbank.org/infrastructure/ntfpsi.nsf nsf