Johannesburg, February 7, 2006 —
Mr. Lars Thunell, newly appointed Executive Vice President of the International
Finance Corporation, the private sector arm of the World Bank Group, will
visit Africa during February 2006. This is his first official trip since
joining the IFC from the private sector last month. His itinerary will
include Cameroon (February 6-8), the Democratic Republic of Congo (DRC,
February 9-10) and Nigeria (February 11-13).
The visit underscores the importance and continuing commitment that the
IFC attaches to its partnership with the countries of Sub-Saharan Africa.
Mr. Thunell’s program will include meetings with senior government officials;
consultations with local private sector representatives, donors, and IFC
clients; and visits to IFC projects. Mr. Thunell will be accompanied by
Mr. Richard Ranken, IFC’s Director for Africa, and other senior officials
from the World Bank Group.
The trip will give Mr. Thunell an opportunity to discuss the countries’
priorities for economic and social development and to explore ways to improve
the business environment and increase private sector development.
“Much of Africa continues to benefit from the recovery of the world economy,
including rising commodity prices, improved macroeconomic stability, and
greater regional stability. But challenges remain in generating private
sector development and overcoming the region’s weak investment climate.
It is in these areas that IFC hopes to continue playing a significant role,”
said Mr. Thunell.
Examples of recent IFC investment in the countries to be visited include:
2005: A long-term loan financing of
$1.3 million to 3T Cameroon, a local logistics company, for expansion of
its trucking fleet and construction of a new office building.
2005: A long-term loan financing of $1.0 million to NOSA, a soap manufacturing
company, for expansion of its laundry soap factory and an upgrade of its
water treatment facilities.
Since its first investment in Cameroon in 1973, IFC has committed financing
in 36 projects amounting to $775 million. Investments include $303 million
for IFC’s own account and $471 million for the account of banks participating
in loan syndications. As of June 2005, IFC’s portfolio in Cameroon
was $120 million.
Democratic Republic of Congo
2005: A $6 million equity financing
in Kolwezi’s copper-cobalt mining project.
2005: A $500,000 equity investment in
ProCredit Bank, a microfinance institution that provides financial services
to lower-income clients and micro and small enterprises. This investment
is coupled with a $500,000 million technical assistance grant to provide
capacity building and training to staff.
Since IFC’s first investment in the DRC in 1970, it has committed financing
in 10 projects amounting to $75 million. As of June 2005, IFC’s portfolio
in the DRC was $37 million.
2005: Construction and operation of
the Obajana greenfield cement plant, which will fill a gap in supply whereby
over 75 percent of the annual local consumption of 10.6 million tons is
imported. The project is expected to have a strong development impact by
promoting investment in infrastructure and construction. Its estimated
cost is $870 million.
2003: Redevelopment of the recently privatized Lagos Festac Novotel into
a three-star hotel aimed at the mid-market. Currently under construction
with a total project cost of $39 million.
Since its first investment in Nigeria in 1964, IFC has committed financing
in 72 projects amounting to $900 million. Investments include $787 million
for IFC’s own account and $113 million for the account of banks participating
in loan syndications. As of June 2005, IFC’s portfolio in Nigeria was
$434 million. Having grown from $143 million in 2001, Nigeria is now the
ninth-largest IFC country exposure.
As IFC announced recently, 2006 is its milestone 50th anniversary year
and promises to be a banner year of performance for the emerging markets.
But major challenges remain on macroeconomic stability, corporate
governance, and environmental and social issues.
“Emerging markets as a group have proved they can sustain high growth
and attract capital. There is tremendous dynamism. But the growth is uneven,
and there is a huge unfinished agenda,” said Lars Thunell, executive vice
president of IFC.
Thunell noted that the flow of private capital into the developing countries
– at roughly $350 billion – is now more than four times the amount of
international aid. But, he added, the development community needs to do
a better job of using market-based solutions to reduce poverty, address
social needs, and preserve the global environment.
“More and more development and aid organizations – multilateral banks,
foundations, nonprofits – are looking at an entrepreneurial approach to
development. They are asking how they can harness the power of private
capital, free enterprise, and social entrepreneurship to bring about needed
change,” Thunell said. “This is where IFC, with 50 years of experience
in this area, can play an even larger role.”
“We need to broaden and deepen this economic growth to reach more of the
poor, especially in countries where investment climate barriers are keeping
small entrepreneurs and women trapped in the informal economy,” he added.
IFC’s strategy in Africa is to address the development of the region more
comprehensively. This means focusing not only on large projects,
but also on expanding the investment program to target smaller businesses,
which constitute much of the private sector in Africa. For larger projects,
IFC now targets more support in the formative stages of project development,
thus expanding our role significantly beyond provision of finance. To improve
the overall investment climate, IFC is also focusing its global knowledge
and local expertise on reducing investment constraints faced by the private
sector in Africa.
IFC’s higher emphasis on technical assistance, deriving from the focus
on smaller investments, has also resulted in the creation of the Private
Enterprise Partnership for Africa in 2005. IFC is initially funding core
staff and operating costs of PEP-Africa, while mobilizing donor funding
for extensive technical assistance programs.
In FY05, IFC committed 32 projects in 13 countries in the Sub-Saharan Africa
region, for a total amount of $445 million. IFC’s total committed portfolio
for the region as of June 30, 2005, was nearly $2 billion.
Some recent Sub-Saharan success stories include a 25-year concession to
run the Kenya/Uganda railway network, for which a winning bidder was announced
in December 2005; financial products for funding of private schools in
Ghana; and a transaction in support of the black economic empowerment drive
in South Africa’s financial sector. IFC is also seeking to assist countries
emerging from conflict; examples include repeat investments in Angola.
The International Finance Corporation
is the private sector arm of the World Bank Group and is headquartered
in Washington, D.C. IFC coordinates its activities with the other institutions
of the World Bank Group but is legally and financially independent. Its
178 member countries provide its share capital and collectively determine
The mission of IFC is to promote sustainable private sector investment
in developing and transition 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, helps
clients improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of FY05 was
$19.3 billion for its own account and $5.3 billion held for participants
in loan syndications.
For more information, visit www.ifc.org.