IFC Helps Business in the Middle East & North Africa

IFC is helping develop the private sector in the Middle East and North Africa through private investments and technical assistance. Our work ranges across 19 countries—from Morocco in the west to Pakistan in the east—and covers a wide variety of sectors.

In early December, IFC's Executive Vice President Lars Thunell visited Egypt, Algeria, and Morocco on his first official trip to the region since joining the Corporation. His visit highlighted IFC's continuing commitment to private sector development, poverty reduction, and employment creation throughout the region.

IFC's Regional Strategy

Investing in the financial, infrastructure, and small and medium enterprise sectors Providing targeted, high-impact technical assistance for the financial sector, smaller businesses, the business environment, public-private partnerships, and privatizations Supporting investments and technical assistance in frontier markets Supporting economic reform through investment and advice on global best practices Promoting intra- and interregional investments to accelerate economic integration and business expansion

IFC's technical assistance facility, the Private Enterprise Partnership for the Middle East and North Africa (PEP-MENA) complements IFC's investments to help achieve these development goals and introduce best practices.

Rising Investment, Especially in Frontier Countries
In fiscal 2006, IFC's commitments in the region more than doubled, reaching $668 million in 29 projects, up from $315 million for 21 projects the previous year. These investments were spread across sectors including infrastructure, manufacturing, oil and gas, and financial institutions, with the last category representing over 40 percent of our new commitments. The largest country exposures are in Egypt and Pakistan.

IFC's commitments in the region's high-risk or low-income countries reached $331 million, nearly half of overall commitments and a big increase from $53 million the previous year. This reflects several projects in Pakistan, mainly in the financial sector; a large cement project in Iraq; and investments in Afghanistan and Yemen across sectors including telecommunications, financial markets, and oil and gas.

Egypt: Supporting Key Sectors
During his visit, Lars Thunell signed IFC's first private-public partnership advisory agreements with Egypt's government to support three infrastructure projects.

The New Cairo Water and Wastewater projects will provide safe water and sanitation to the growing population of New Cairo and outlying areas. New Cairo is being developed to ease overcrowding in the capital and is projected to grow from 350,000 to 2 million residents by 2020.

The New School project will help the government meet the country's growing demand for schools. This effort will help address a current shortage of facilities and prepare for population growth across Egypt.

“Public-private partnerships are a business model that helps increase private sector investment in public infrastructure to meet the needs of a growing economy and improve services, especially for the people who need them most,” Thunell remarked at the signing.

Thunell also visited the Wadi Group, an IFC client company, to see how the Corporation is helping one of Egypt's largest integrated poultry companies. Our $15 million loan to the Wadi Group will support key upgrades, including the expansion of the company's acreage of olive groves and the increase of its exports of glass food containers. The investment will provide new employment for about 750 workers.

Algeria and Morocco: An Increasing Role
In the Maghreb region, Lars Thunell promoted private sector development as the most important engine of growth and job creation. IFC is scaling up its investments and technical assistance in Algeria and Morocco as part of its strategy to contribute to private sector growth, improve the investment climate, and develop the small and medium enterprise sector.

In Algeria, IFC increased its investments to $34 million in fiscal 2006 and consolidated its technical assistance work. In the financial sector, IFC has been instrumental in creating many new private sector institutions, including Société Generale Algerie, the Arab Bank Corporation, and the Arab Leasing Corporation.

Looking forward, IFC will help Algeria improve the availability of financial services to small and medium enterprises, encourage private sector participation in infrastructure, and assist the privatization process. We will continue to support the local private sector through both investment and advisory services.

In Morocco, over the last 30 years IFC has contributed about $1 billion to support development of the private sector. In fiscal 2006, IFC's investments here reached nearly $56 million, including Morocco's share of regional projects. Investments include Viola Water International, the Maghreb Private Equity Fund II, and Fondep, Morocco's fourth microfinance institution.

The equity fund will enhance the competitiveness of leading companies in the Maghreb region by providing equity and other value-added services to small and medium enterprises and transferring strategic and operational skills to local entrepreneurs. IFC's partial guarantee to Fondep provides long-term sustainable financing to an institution whose network of 43 agencies reaches more than 45,000 active beneficiaries across Morocco.

Through PEP-MENA, IFC is working with the government to improve Morocco's business environment, as well as with banks to disseminate best practices in lending to small and medium enterprises. IFC has also recently entered an advisory mandate with the Moroccan Federation for IT, Telecommunications, and Off-Shoring, to improve the IT sector's access to financing and export promotion.

Promoting Growth of Smaller Businesses
On his visit, Lars Thunell also learned more about IFC's Business Edge, a range of management training products and services specially designed for owners and managers of smaller businesses. Adapted from IFC's work in Southeast Asia and launched in the Middle East and North Africa in 2004, this effort has already trained over 13,000 people through a network of local certified training providers. The program has also helped build the capacity of training providers and generated substantial demand for management training aimed at small and medium enterprises.

Thunell commended the Business Edge team in Egypt for their pioneering work and expressed his hope to see the program expand further into other regions.


For additional information contact:

Riham Mustafa or Egidio Germanetti
Phone: +20 2 461 9150 Ext. 306/314
E-mail: rmustafa@ifc.org / egermanetti@ifc.org