IFC’s Development Results by Region

IFC invests in the private sector in developing countries, and the following section details the development achievements of IFC investments in the different regions of the world. IFC’s development results are influenced by macroeconomic conditions and the business environment, by the sector composition of the portfolio, and the size of its investment.

Results Highlights by Region:

• IFC’s development results in 2008 have shown significant improvement from 2007. This improvement is evident in all regions and nearly all industries, and in large part reflects improving economic conditions and favorable investment climates in many developing countries. Weighted results by IFC’s investment volume were even stronger, with the percentage of projects with high development results increasing from 81% in FY07 to 87% in FY08.
  
• Weighted results are higher in all regions, but particularly in Sub-Saharan Africa and East Asia and the Pacific. This indicates that on average larger investments and companies perform better. In part this is due to a higher risk profile for small businesses and investments and also to the fact that larger companies have economies of scale, often better management and corporate governance, and find it easier to overcome difficult business environments.
  
• In line with IFC’s strategy to focus on IDA countries, a third of all IFC investments accounting for about 20% in IFC investment volume included in this analysis (FY99-04) are located are in IDA countries. The 3-year target for the IFC is to ensure 50% of its new projects are in IDA countries.
  
• The sector composition and size of investment partly explain variances in regional performance. For example, in Europe and Central Asia, a high concentration of IFC projects in financial markets – a high-performing sector in IFC’s portfolio - has contributed to a large share of high development results. In contrast, in Africa and East Asia, the concentration of the portfolio on general manufacturing and services sectors with a relatively high proportion of small projects, has contributed to weaker development outcomes. However, as noted above, results have been improving in all regions.