Washington, D.C., December 18, 2008—IFC’s
Board today approved a package of crisis response initiatives to support
the private sector in emerging markets hit by the global financial crisis.
On December 9, it also approved a Sovereign Funds Initiative which will
enable IFC, a member of the World Bank Group, to raise and manage commercial
capital from sovereign funds for equity investments in some of the poorest
developing countries. The initiatives will support the private sector,
which is critical to employment, recovery, and growth.
The crisis response facilities consist
of a doubling of the IFC Global Trade Finance Program to $3 billion, a
new $3 billion Bank Recapitalization Fund, and an Infrastructure Crisis
Facility which is expected to mobilize at least $1.5 billion. These will
be supported by advisory services addressing the needs of clients affected
by the crisis. The goal of the Sovereign Funds Initiative is to connect
long-term commercial capital from state-owned investors with the substantial
investment needs of private companies in developing countries.
“We are pleased that the Board approved
and endorsed these important initiatives,” said Lars Thunell, IFC’s Executive
Vice President and CEO. “With the support of donors and partners, these
IFC facilities will provide critical assistance to many businesses and
entrepreneurs and reduce the impact of the crisis on the poor. In addition,
our new Sovereign Funds Initiative should mobilize new sources of commercial
capital for long-term investment in frontier regions and countries.”
The four crisis response facilities are expected to deploy about $30 billion
over the next three years. IFC will fund the facilities and has invited
other donors, including governments and international financial institutions
to contribute financing and expertise. The Japanese government has announced
that it will become a founding partner and invest $2 billion in the Bank
IFC’s Board of Directors is a permanent board that represents IFC’s 181
member countries and guides its programs and activities.
About IFC’s Crisis Response Facilities
Expanded trade finance program: IFC will double its existing Global
Trade Finance Program from $1.5 billion to $3.0 billion over a three year
period to meet a large increase in demand for short-term trade finance.
The expanded facility will benefit participating banks, including those
in some of the world’s poorest countries.
Bank Recapitalization Fund: IFC will launch a global equity fund
to recapitalize banks, as bank failures would further damage economic activity
and worsen poverty in developing countries. IFC expects to invest $1 billion
over three years and Japan has announced it will invest $2 billion in the
Infrastructure Crisis Facility: This new IFC facility will
bridge the gap in available financing for viable,
privately-funded infrastructure projects
facing financial distress. IFC expects over three years to invest a maximum
of $300 million and that other sources will invest between $1.2 billion
and $10 billion.
IFC Advisory Services: IFC is scaling up and refocusing its advisory
services geared to financial institutions and governments, and reform of
the financial infrastructure—banking for small and medium enterprises,
leasing, microfinance, housing, investment policy and promotion, and business
operation and regulation.
For more information about IFC’s crisis response, visit www.ifc.org/financialcrisis.
IFC, a member of the World Bank Group,
creates opportunity for people to escape poverty and improve their lives.
We foster sustainable economic growth in developing countries by supporting
private sector development, mobilizing private capital, and providing advisory
and risk mitigation services to businesses and governments. Our new investments
totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous
year. For more information, visit www.ifc.org.