IFC has announced gains on key development indicators for fiscal 2006, with investments in high-risk and low-income countries up 20 percent and a record $9.5 billion in investment commitments and resource mobilization for private sector projects in developing countries.
"We made tremendous progress this year targeting financing in areas where IFC's help is needed most. IFC's investments in Africa and the Middle East increased 80 percent. Our investments in infrastructure and private sector health and education projects were up more than 50 percent," said Lars Thunell, IFC's Executive Vice President.
Thunell launched the Annual Report on September 18, at the World Bank Group's Annual Meetings in Singapore.
Development Results
Projects IFC has invested in provided health care to 2.4 million patients and education services to 320,000 students last year. Our investments in telecommunications have helped 80 million people gain access to phone service since 1996.
Oil, gas, and mining companies in which IFC has invested contributed $4.4 billion to government revenues in developing nations last year. These companies have also created 50,000 jobs.
In FY06, IFC increased its investments in critical sectors that support economic development. Investment commitments in infrastructure projects were up more than 50 percent, providing support for reliable power for industrial processes and transportation infrastructure for getting goods to market.
To facilitate trade to and from the emerging markets, IFC launched a trade finance program in FY06, issuing more than 380 partial or full guarantees against underlying trade transactions and covering the payment risk of participating banks in 40 countries. The average guarantee is for less than $1 million, and about 80 percent of IFC's trade finance is in Sub-Saharan Africa.
IFC also introduced a new development outcome tracking system for investment operations in FY06, to measure and track results throughout the life of a project. A similar system was implemented to monitor the development impact of all active technical assistance and advisory projects.
Investing in Development
IFC is the largest provider of multilateral financing for private sector projects in the developing world. In FY06, we committed $6.7 billion in funds from our own account and mobilized an additional $1.6 billion through syndications and $1.3 billion through structured finance. Based on the total costs of the private sector projects we helped finance this year, each $1 in IFC commitments for our own account resulted in an additional $2.88 in funding from other sources. Altogether, we supported 284 investment projects in 66 countries.
IFC has been consistently profitable since 1956. Businesses must create profits to generate jobs and wealth, and IFC's financial results reflect the success and growth of enterprises in emerging markets around the world. Our operations contribute to economic, financial, environmental, and social sustainability in emerging markets.
This year nearly a quarter of our commitments were in low-income or high-risk countries, demonstrating the viability of private enterprise even in difficult environments. IFC's investment commitments to firms operating in the Middle East and North Africa more than doubled in FY06, and commitments for private sector projects in Sub-Saharan Africa increased nearly 60 percent.
Building Capacity
To support future private sector development, IFC provides technical assistance and advisory services that address obstacles to private investment and assist private companies. With the support of donors, IFC was able to launch 350 new projects in 80 countries in FY06.
IFC made important strides in technical assistance and advisory activities by restructuring these activities into five strategic business lines, allowing us to focus on our strengths, improve project quality, and increase knowledge sharing.
Most of IFC's technical assistance work is carried out in low-income or high-risk countries, with almost 50 percent of projects implemented in frontier countries. The majority of funding approved in FY06, over 40 percent, was for projects in Sub-Saharan Africa.
A Cause for Celebration
From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds and arranged $25 billion in syndications for more than 3,500 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY06 was $21.6 billion for its own account and $5.1 billon held for participants in loan syndications.
IFC's FY06 results make this 50th anniversary year a cause for celebration. Our five decades of experience demonstrate the private sector's capacity to improve lives in developing countries. We have helped create jobs by building and expanding enterprises, encouraged private equity funds to invest where they had never invested before, and helped privatize and restructure entire economic sectors.
IFC's Annual Report provides full details of the Corporation's FY06 performance.
For more information contact:
Susan Blesener
Annual Report Editor
Phone: (202) 473-7269
E-mail: SBlesener@ifc.org
Published September 17, 2006
