Washington DC, October 26, 2001—The
International Finance Corporation, the private sector arm of the World
Bank, has signed an agreement with the Government of the Free State of
Bavaria to establish a 5 million Deutsche Marks Trust Fund to help finance
private sector development in developing countries.
The Bavaria-IFC agreement marks the first time IFC has established a trust
fund with a state government authority, rather than a national government
or agency. The trust fund will enable Bavarian businesses to work
closely with IFC in private sector development in emerging markets and
“The Trust Fund marks the beginning of a new and important relationship
between Bavaria and IFC,” said IFC Chief Peter Woicke. “This partnership
will give IFC access to Bavarian expertise to address the various constraints
it encounters in the course of its work, while providing Bavarian companies
with access to IFC’s experience in investing in emerging markets and the
developing world,” he added.
Dr. Otto Wiesheu, the Bavarian Minister for Economic Affairs, Transport,
and Technology, added: “I certainly hope that cooperation between Bavarian
medium-sized companies and international finance institutions will be intensified.
Bavaria has much to offer in products and advisory areas, as well
as in the service sector. This Trust Fund supports IFC’s private
sector development work in emerging countries, and helps Bavarian consultants
to better cooperate with the World Bank Group. It is a win-win investment
for all of us.”
The fund, which primarily focuses on technical assistance, will finance
several key aspects of private sector development, such as: pre-business
feasibility studies, the establishment of pilot projects, technology transfer,
technical assistance in the rehabilitation of projects experiencing difficulties,
and technical advisory services in areas such as privatization and capital
“The Bavaria-IFC Trust Fund has been established with the mutual understanding
that private business is playing – and will continue to play – an increasing
and fundamental role in spurring economic growth in developing countries,”
Mr. Woicke said.
The Free State of Bavaria is one of the most attractive business regions
in the Federal Republic of Germany and in Europe, with an economy larger
than each of the economies of nine of the fifteen EU countries, and comparable
to the economies of Ohio and Pennsylvania in the United States. Bavaria’s
international competitiveness is demonstrated by its annual exports of
more than US$80 billion.
IFC initiated the Technical Assistance Trust Funds Program in 1988 in an
effort to identify and support viable business projects in developing countries
at an early stage. Among other forms of technical assistance, the
program provides technical assistance to help entrepreneurs prepare projects
and design proposals that meet the criteria of prospective investors, including
IFC. Since its inception, the program has supported up to 1000 technical
assistance projects in a broad range of sectors. It also supports
some of IFC’s privatization advisory services and capital markets activities
aimed at strengthening private sector institutions.
IFC's mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people's lives. IFC
finances private sector investments in the developing world, mobilizes
capital in the international financial markets, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $31 billion of its own funds and arranged
$20 billion in syndications for 2,636 companies in 140 developing countries.
IFC's committed portfolio at the end of FY01 was $14.3 billion.