Press Releases
print

IFC Executive Vice President Lars Thunell to Visit Africa in February 2006


In Johannesburg, South Africa
Elizabeth Pretorius
Phone: 27 11 731 31 55
E-mail: epretorius@ifc.org

In Washington, D.C.
Corrie Shanahan
Phone: +202 473 2258
E-mail: cshanahan@ifc.org


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:

Cameroon

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.

Nigeria

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.

About IFC

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 its policies.

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.