The World Bank Group, other than providing IDA & IBRD financing to borrowing governments, also has three other pillars. These are the IFC, MIGA and the ICSID. The activities by the MIGA were explained in an earlier post, in this article we are focusing on the International Finance Corporation ( IFC ), the private sector pillar of the WBG. For the first time in the history of the World Bank Group the IFC was the pillar with the biggest budget, financing for more than $22 billion in fiscal year 2014.
The IFC provides financial support through loans and equity financing to its clients and additionally provide advice to unlock private sector investment. For a project to be eligible for IFC support a number of criteria must be met. The project must be located in a developing country that is a member of the IFC, active in the private sector, be technically sound, have good prospects of being profitable, benefit the local economy and satisfy environmental and social standards.
The IFC provides different forms of financing, including (syndicated) loans, structured finance, equity finance and trade finance. The IFC only provides finance when the company cannot attract the financing on the market against reasonable rates. Usually the maturities of the financing are relatively long, expanding from 8 to potentially 20 years. The IFC cooperates in is financing with a lot of other financiers, from the $22 billion that was invested in FY14, more than $5 billion was mobilized from other financiers. One of those other financiers is the Dutch FMO.The Netherlands Development Finance Company (FMO), called Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. in Dutch, is a bilateral private-sector development bank based in the Hague, the Netherlands.
As a Dutch company seeking financial support from the IFC or perhaps seeking market advice, there are multiple ways to get engaged. The best way is to apply for financing by submitting an investment proposal. However, it would be wise to seek the advice of the IFC before submitting your proposal, just so you can make sure you have touched on all the elements the IFC is looking for.