IFC takes equity stakes in private sector companies and another entities such as financial institutions, and portfolio and investment funds in developing countries. IFC is a long-term investor and usually maintains equity investments for a period of 8 to 15 years. When the time comes to sell, IFC prefers to exit by selling its shares through the domestic stock market in a way that will benefit the enterprise, often in a public offering.
IFC operates on a commercial basis. It invests exclusively in for-profit projects and charges market rates for its products and services.
To ensure the participation of other private investors, the Corporation generally subscribes to between 5 percent and 15 percent of a project's equity. IFC is never the largest shareholder in a project and will normally not hold more than a 35 percent stake.
IFC's equity investments are based on project needs and anticipated returns. The Corporation does not take an active role in company management.
IFC risks its own capital and does not accept government guarantees. However, to meet national ownership requirements, IFC shareholdings can be treated as domestic capital or local shares.
