WASHINGTON, D.C., March 17, 2020 — The
World Bank and IFC’s Boards of Directors approved today an increased $14
billion package of fast-track financing to assist companies and countries
in their efforts to prevent, detect and respond to the rapid spread of
COVID-19. The package will strengthen national systems for public health
preparedness, including for disease containment, diagnosis, treatment,
and support for the private sector.
IFC, a member of the World Bank Group, will increase its COVID-19 related
financing availability to $8 billion as part of the $14 billion package,
up from an earlier $6 billion, to support private companies and their employees
hurt by the economic downturn caused by the spread of COVID-19.
The bulk of the IFC financing will go to client financial institutions
to enable them to continue to offer trade financing, working-capital support
and medium-term financing to private companies struggling with disruptions
in supply chains. IFC’s response will also help existing clients in economic
sectors directly affected by the pandemic--such as tourism and manufacturing—to
continue to pay their bills. The package will also benefit sectors involved
in responding to the pandemic, including healthcare and related industries,
which face increased demand for services, medical equipment and pharmaceuticals.
“It’s essential that we shorten the time to recovery. This package provides
urgent support to businesses and their workers to reduce the financial
and economic impact of the spread of COVID-19,” said David Malpass,
president of the World Bank Group. “The World Bank Group is committed
to a fast, flexible response based on the needs of developing countries.
Support operations are already underway, and the expanded funding tools
approved today will help sustain economies, companies and jobs.”
The additional $2 billion builds on the announcement
of the original response package on March 3, which included $6 billion
in financing by the World Bank to strengthen health systems and disease
surveillance and $6 billion by IFC to help provide a lifeline for micro,
small and medium sized enterprises, which are more vulnerable to economic
“Not only is this pandemic costing lives, but its impact on economies
and living standards will likely outlive the health emergency phase. By
ensuring our clients sustain their operations during this time, we hope
the private sector in the developing world will be better equipped to help
economies recover more quickly,” said Philippe Le Houérou, Chief
Executive Officer of IFC. “In turn, this will help vulnerable groups
to more quickly recover their livelihoods and continue to invest in the
Having mobilized quickly at the time of the 2008 global financial crisis
and the Western African Ebola virus epidemic, IFC has a successful track
record of implementing response initiatives to address global and regional
crises hampering private-sector activity and economic growth in developing
The IFC response has four components:
· $2 billion from the Real Sector Crisis
Response Facility, which will support existing clients in the infrastructure,
manufacturing, agriculture and services industries vulnerable to the pandemic.
IFC will offer loans to companies in need, and if necessary, make equity
investments. This instrument will also help companies in the healthcare
sector that are seeing an increase in demand.
· $2 billion from the existing Global Trade
Finance Program, which will cover the payment risks of financial institutions
so they can provide trade financing to companies that import and export
goods. IFC expects this will support small and medium-sized enterprises
involved in global supply chains.
· $2 billion from the Working Capital Solutions
program, which will provide funding to emerging-market banks to extend
credit to help businesses shore up their working capital, the pool of funds
that firms use to pay their bills and compensate workers.
· A new component initiated at the
request of clients and approved on March 17: $2 billion from
the Global Trade Liquidity Program, and the Critical Commodities Finance
Program, both of which offer risk-sharing support to local banks so they
can continue to finance companies in emerging markets.
IFC is already working to deploy its response financing. For example, we
trade-financing limits for four banks in Vietnam by $294 million so they
could continue lending to companies in need, especially small and medium-sized
IFC will maintain its high standards of accountability, while bearing in
mind the need to provide support for companies as quickly as possible.
IFC management will approve projects based on credit, environmental and
social governance and compliance criteria, as applied in past crisis responses.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
where they are needed most. In fiscal year 2019, we delivered more than
$19 billion in long-term financing for developing countries, leveraging
the power of the private sector to end extreme poverty and boost shared
prosperity. For more information, visit www.ifc.org.