Frontier Markets:
IFC InfraVentures: A New Way of Working

In 1911, a massive earthquake triggered a mountain landslide in southeast Tajikistan, forming a natural dam and reservoir.

Few could foresee it at the time, but the power harnessed from this dam would hold vast potential, capable of generating electricity for local people throughout the isolated region’s cold winters and dark nights. Until now it has never been developed. But a proposed public private partnership project to develop 240 megawatts of hydropower at Lake Sarez would do just that, adapting the existing dam in an environmentally and socially sustainable manner.

Like many other ideas for new infrastructure in the world’s poorest countries, the project could do much to move the local economy forward. But its road to commercial viability is long, requiring a well-crafted business plan that can attract investors, manage risks, and bring success on both financial and development terms in a difficult environment. It is just the challenge for IFC. Our $100 million IFC InfraVentures fund helps cover essential costs—including feasibility studies, financial modeling, risk capital, and others—to give critical ventures like the Lake Sarez project a good chance of coming to life.

In IFC InfraVentures, we act not just as investor but as project sponsor, working with partner firms in the early planning stages that sometimes take years to recoup investment dollars. Later, we can come in with financing and mobilize additional capital from others, converting our initial prep work into equity in compensation for our efforts. Active for more than a year, IFC InfraVentures works in several International Development Association (IDA) countries with major infrastructure needs—Djibouti, Madagascar, Nicaragua, and others. Two things are clear so far: demand is high, and investors will come on board when presented with good projects. InfraVentures is there to help make them happen.