Final ppt ifc1st fase
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IFC is the largest global development institution focused on the private sector in developing countries. It has invested over $265 billion since 1956 to end extreme poverty and boost shared prosperity. IFC works with companies and other private sector partners in more than 100 developing countries, using its capital, expertise, and influence to create markets and opportunities in the toughest areas of the world.
Final ppt ifc1st fase
- 1. A Study on International Finance Corporation Presented To:- Presented By:- Dr. Y.C.Joshi Ankit Rathva (11M48) Ashish Rathod (11F49) Nilesh Makwana (11F69)
- 2. Introduction Of IFC • IFC is the largest global development finance institution focused on the private sector – the global leader in private sector development finance • Driven by IFC’s vision and purpose, they make a unique contribution to development • they invest, advise, mobilize capital, and manage assets – providing solutions for an inclusive and sustainable world • It was established in 1956. Vision of IFC is that people should have the opportunity to escape poverty and improve their lives. 2
- 3. Objectives of IFC • Strengthening the focus on frontier markets • Addressing climate change and ensuring environmental and social sustainability • Addressing constraints to private sector growth in infrastructure, health, education, and the food-supply chain • Developing local financial markets • Building long-term client relationships in emerging markets 3
- 4. Review of Literature • Allen Blackman and Geoffrey J. Bannister (1998) in many developing countries the informal sector, comprised of low-technology unlicensed micro-enterprises, is a major source of pollution. • Environmental management in this sector is exceptionally challenging. Though clean technologies offer a means of mitigating the problem, to our knowledge there has been no rigorous empirical research on why informal (or even small-scale) firms do and do not adopt them. • As a first step toward filling this gap, this paper presents the results of an econometric analysis of the diffusion of propane among informal “traditional” brick makers in Cd. Juárez, Mexico—a leading source of air pollution owing to their reliance on cheap, highly polluting fuels such as used tires and scrap wood. 4
- 5. Objectives of the study • To study the functions of the IFC • To study how IFC categorized the business activities • To study how IFC promotes the growth of the private sector in less developed member countries • To study investment policies and activities developed by IFC • To study contribution of IFC in India 5
- 6. IFC's Vision, Values, & Purpose vision is that people should have the opportunity to escape poverty and improve their lives. values are excellence, commitment, integrity, teamwork, and diversity. purpose is to create opportunity for people to escape poverty and improve their lives by: • Mobilizing other sources of finance for private enterprise development • Promoting open and competitive markets in developing countries • Supporting companies and other private sector partners where there is a gap • Helping generate productive jobs and deliver essential services to the poor and the vulnerable • To achieve our purpose, IFC offers development-impact solutions through firm- level interventions (direct investments, advisory services, and the IFC Asset Management Company); by promoting global collective action; by strengthening governance and standard-setting; and through business-enabling-environment work. 6
- 7. IFC: Reputation and Value • IFC is the world’s largest multilateral private sector investor in the emerging markets • AAA rating • Profitable every year since it was established • 2,600+ people in our 80 offices worldwide • In-house syndications department working with over 200 banks • Global benchmarking – identifies and disseminates international best practice • Advice on environmental and social issues • Political risk mitigation • Preferred creditor status • IFC Performance Standards adopted through the Equator Principles by over 50 global institutions 7
- 8. What IFC Do • Investment Services - In FY11, IFC invested $12.2 billion and 518 projects - Mobilized an additional $6.5 billion to support private sector in development countries. • IFC Financial & Investment Projects - Loans - Syndication Loans - Equity Finance - Structured Finance - Risk management Projects - Local Currency & Financing - Trade Finance 8
- 9. • IFC Asset Management Company - Mobilizes and manages funds on behalf of institutional investors including sovereign funds, pension funds, and development finance institution. - As of June 30, 2011 had approximately $4.1 billion in assets under management. • Funds include - IFC Capitalization Fund - IFC Africa, Latin America and Caribbean Fund - The African Capitalization Fund • Advisory Services Business Lines: - Access to Finance - Investment Climate - Sustainable Business - Public-Private Partnerships 9
- 10. Functions Of IFC • It promotes sustainable private sector development • Providing financial assistance to the private sector projects and companies located in the developing world. • Helping private companies based in the developing world mobilize financing in the international financial markets. • Providing advisory and technical assistance to the businesses and governments • While the World Bank finances projects with sovereign guarantees only, the IFC finances projects without sovereign guarantees also. This means IFC is primarily active in private sector projects 10
- 11. Cont… • Like a bank, IFC lends or invests its funds to its customers and expects to make a sufficient risk-adjusted return on its global portfolio of projects. • IFC supports projects with positive developmental outcomes, and to improve the outcome of such projects by various means. • IFC provides both investment as well as advisory services. • IFC's Advisory Services focus basically on five core areas: Access to Finance, Business Enabling Environment, Environmental & Social Sustainability, Infrastructure Advisory, and Corporate Advice. 11
- 12. IFC’s Operation • Financing services • Protection of interest • Applicability of Certain Foreign Exchange Restrictions • Valuation of Currencies • Warning to be Placed on Securities • Political Activity Prohibited 12
- 13. IFC Investment Guidelines Private sector, with strong sponsor commitment Financially, economically, environmentally, and socially sound Maximum IFC share (excluding syndications) • 25% of project cost over $50 million • 35% of project cost under $50 million • 40% of project costs for expansion projects Investment size • Typically $5 million to over $100 million Projects and IFC’s investment are expected to earn competitive and commercial rates of return: • Comprehensive security package required for loans • Reasonable exits are expected for IFC equity and quasi-equity investments Expert IFC teams work closely with the client to finalize the investment 13
- 14. Partners & Stakeholders As a global financier with operations in many regions and sectors, IFC works with a wide range of groups that have a stake in our projects, are affected by our work, or help us strengthen our impact on sustainable private sector development. Our partners, stakeholders, and outreach include: • Civil society • Development institutions • Donors • Foundations & companies • IFC member countries • Media 14
- 15. Sustainable Development at IFC • IFC has well established and rigorous standards for environmental, social, and positive economic impact • IFC works with clients to maximize the positive impact of projects we finance • In many cases, this leads to reduced risks and long run financial benefits • Particularly important in African context 15
- 16. Global Infrastructure Department • Power • Renewable Energy • Transport • Water • Infraventures • Telecoms • Oil, Gas & Mining 16
- 17. A Valuable Partner they are well-positioned to help clients in good times and bad they offer: • A strong financial position • Low leverage ratios, prudent risk management policies • A long-term partnership perspective, providing clients important countercyclical financing when commercial banks cut back • The expertise and experience needed to make a difference, focusing on innovative transactions where our development impact is the highest – creating opportunity where it is needed most • Affiliation with the World Bank 17
- 18. IFC’s Global Reach 100+ country and regional offices worldwide 3,500 staff, of which 55% are outside of Washington Moscow Almaty Washington Istanbul Cairo New Delhi Mexico City Hong Kong Dakar Port-of-Spain Bogota Nairobi São Paulo Johannesburg Buenos Aires IFC HQ/Hub Offices IFC Operational Center IFC Country Offices 18
- 19. Their Core Businesses Asset Investment Advisory Management Services Services Company • Loans • Access to finance • Wholly owned • Equity • Sustainable subsidiary of IFC • Trade finance Business • Private equity fund • Investment manager • Syndications Climate • Invests third-party • Securitized finance capital alongside IFC • Public-Private • Other financial products Partnerships $55.2 b $4.1b $200m portfolio under per year mgmt 19
- 20. The Reach of IFC’s Projects IFC’s activities help raise living standards for people throughout the developing world Last year their clients provided: • 2.2 million jobs • $112 billion in micro, small, and medium enterprise loans • 8 million patients with health care treatment • 35 million people with clean water • 1.4 million students with education services 20
- 21. Financing Criteria • Located in a developing country that is a member of IFC • Be in the private sector • Be technically sound • Have good prospects of being profitable • Benefit the local economy • Be environmentally and socially sound, satisfying IFC environmental and social standards as theyll as those of the host country 21
- 22. IFC Financing $20bn IFC’s own account Mobilization* 20 15 $15bn 10 $10bn 5 $5bn 0 $0 FY07 FY08 FY09 FY10 FY11 FY12 * Mobilization includes syndicated loans, structured finance, IFC initiatives and other, and IFC Asset Management Company. 22
- 23. Investments by Region, FY11 Commitments for IFC’s Account: $12.2 Billion Global >1% Sub-Saharan Africa 18% Middle East and North Africa 13% East Asia and Pacific 16% Latin America and the Caribbean 25% South Asia 6% Europe and Central Asia 22% 23
- 24. Investments by Industry, FY11 Commitments for IFC’s Account: $12.2 Billion Agribusiness & Forestry Other Sectors 4% >1% Consumer & Social Services Trade Finance 4% 38% Financial Markets 25% Telecommunications & Information Technology Funds 3% 4% Oil, Gas & Mining Infrastructure 2% Manufacturing 13% 7% 24
- 25. IFC and India (Reducing poverty together) 25
- 26. • Long term partner-first investment in India in 1958 • Regional hub of south Africa (including Bangladesh, Bhutan, Maldives, Nepal, Sri lanka) • Office in India Delhi, Mumbai, Chennai, and Kolkata. • Cumulative IFC investments, India-march 2012 ($6.8bn) • IFC committed portfolio , India- December 2012 ($3.6bn) • IFC against AIDS 26
- 27. IFC In India • Since 1956, IFC has invested in 264 companies in India, providing over $7 billion in financing for its own account and $2.1 billion in mobilization from external resources. • portfolio of $3.7 billion (as of June 2012) makes India IFC's largest country of operations 27
- 28. IFC investment in India 1950-60: Kirloskar Oil Engines 1970: HDFC, Zauri Industries etc. 1980: Ashok Leyland, mahendra & Mahindra, Tata steel, etc 1990: Moser baer, IDFC, Jet Airways, 2000: Apollo tyres, Dabur Pharma, ING vysya, TVS motors, Cairn India etc. 28 2010: Central bank of india, Auro mira and Utkarsh Microfinance
- 29. What does IFC look for in its people? • Technical expertise • Diverse nationalities and experience • Strong interpersonal and teamwork skills • Commitment to the IFC mission • Leadership potential • Language proficiency • Enthusiasm for working in a multicultural environment • Interest to live in emerging markets 29
- 30. Global Recognition Best Overall Development Finance Multilateral of Institution and Best the Year Award DFI in Africa Project Finance Trade Finance International Deal of the Magazine Decade Award January 2011 July 2011 (BTC Pipeline) Infrastructure Journal Renewable Deal of the April 2011 Multilateral Year for Asia Pacific Agency of the (China WindPotheyr Year Group) Infrastructure Project Finance Journal International April 2011 June 2011 30
- 31. Who they Are, What they Do • IFC is the largest global development finance institution focused on the private sector – the global leader in private sector development finance • they create opportunity for people – to escape poverty and improve their lives • Driven by our vision and purpose, they make a unique contribution to development • they invest, advise, mobilize capital, and manage assets – providing solutions for an inclusive and sustainable world 31
- 32. Conclusion • IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries. • IFC Industries (Sectors) are in charge of processing IFC transactions. They also provide the Regional Departments with the expertise and knowledge needed to process new projects. 32
- 33. The most sensitive needs for energy, water, roads, phone connections, healthcare, education, sanitation, waste management, access to financial services, are among those who live in low- income, rural and semi-urban parts of the country. For this IFC works for following sectors. • Building infrastructure and assisting public-private-partnerships; • Facilitating renewable energy generation; promoting cleaner production, energy and water efficiency; • Supporting agriculture for improved food security; • Creating growth opportunities for small businesses; • Reforming investment climate; • Developing public-private partnerships; • Encouraging low-income housing; and • Making affordable healthcare efficient and accessible. 33
- 34. THANK YOU 34
Editor's Notes
- #3: Part 1 – Corporate Overview IFC is part of the World Bank Group. While IBRD lends and advises governments, they support the private sector. IFC is owned by our 183 member countries, which collectively determine their policies, and approve all of their investments. The U.S. is the largest shareholder with 24%, follotheyd by Japan (6%), Germany, France and the UK (5% each).
- #18: IFC is a profitable institution and does not receive any ongoing financing from our shareholders. they raise funds for onlending on the international capital markets, benefitting from our AAA rating.
- #19: IFC has offices in about 86 countries, including 42 of the least developed countries. they have decentralized our business to be closer to clients and speed up decision-making, resulting in 55% of staff now located outside of Washington. Our business is divided into seven regions, each with at least one hub office where decision-makers and the bulk of staff are located, and several country offices. Istanbul was recently established as a Operations Center, to provide the full functionality of our headquarters in terms of business processing and client responsiveness.
- #20: IFC has evolved its product offering to respond to the changing needs of our clients. In Investment Services they have developed innovative financial products including partial credit guarantees, local currency finance and short-term trade finance through local banks. Equity makes up about one-third of our investments. On the Advisory side, they offer four business lines focused on both direct advice to private sector companies and financial institutions and advice to governments on private sector issues. The IFC Asset Management Company invests resources of sovereign funds, pension funds and other institutional investors, allowing IFC to make more investments than they could alone and giving investors access to our pipeline of transactions and deep expertise in developing countries. Our objective is to coordinate our service offerings in a way to add value to our clients and increase our overall level of investment and development impact. [If possible, give example from your own experience on how they combine investment and advisory.]
- #21: To improve our development results, IFC invests considerable resources in measuring the developmental impact of our projects. they also have an Independent Evaluation Group to improve accountability and identify lessons learned.
- #22: For each investment, they need to ask ourselves, what unique role does IFC have, what value-added will they bring, and what will be the potential development impact of this project? Normally our investment size ranges from US$1 million to US$50 million, and for equity investments, they take bettheyen 5-20% shareholding.
- #23: In the year ended June 30, 2011, IFC committed US$12.2 billion for our own account and mobilized an additional US$6.5 billion of funding in 518 new projects in 102 countries. they earned net income of US$2.2 billion for the year, of which $600 million was granted to the World Bank for support to least-developed countries.
- #24: The Europe and Central Asia Region and Latin America and Caribbean Region remain to be the largest recipients of IFC financing, together representing 47% of new investments. Investments in the Middle East and North Africa and Sub-Saharan Africa are growing, and half of our projects theyre located in the least-developed countries.
- #25: IFC invests in a wide range of sectors, with support to financial institutions (Financial Markets and Trade Finance) representing the two largest. This reflects IFC’s strategy to broaden access to finance and deepen capital markets by expanding the availability of microfinance and credit for small and medium enterprises. For each of these sectors, they have a dedicated investment staff who have developed global expertise on industry trends, appropriate financial structures, key drivers, etc. as theyll as in-house Industry Specialists who bring technical expertise on that sector. This allows us to understand the most important criteria for an investment in that sector to be profitable, specifically in the context of emerging markets. This is also one of the reasons that clients come to IFC, for our global reach and sector knowledge.
- #30: Part 2 – Recruitment / Role and Career Path of an IO Technical expertise is highly valued; staff join IFC with specific experience in the area of work. 66% of our staff is from developing countries. This diversity is important to us in terms of enriching our perspective and understanding our clients and stakeholders. IFC sponsors staff for visa and work authorization they expect to more than 400 people in fiscal year 2012: 75% of which will be based outside of Washington, reflecting our decentralization strategy (highest needs in Sub-Saharan Africa, South Asia and East Asia & Pacific about one-third will be in investment roles
- #31: Examples of awards IFC has won in 2011 in recognition of the leading role they play in private sector investment.