Bhutan joined IFC as a member country in 2003. Since then, IFC has invested close to $50 million in the country, creating opportunities and promoting economic growth.
IFC’s vision of sustainable and inclusive growth is a natural fit with Bhutan’s vision and philosophy for growth. IFC is ramping up its work to support the country’s socio-economic progress using a combination of investments and advisory services to support private sector growth, boost investor confidence and create job opportunities in the key sectors of hydropower; tourism; manufacturing; and agriculture.
STORIES OF IMPACT
Expanding Access to Finance: A key constraint to private investment and micro small and medium enterprise growth in Bhutan includes access to, and the cost of, finance. IFC’s long-term partnership with Bhutan National Bank is helping boost access to financing for small businesses. The bank is one of Bhutan’s five commercial banks and a leading bank by market share. IFC’s global trade finance facility to the bank in 2007 helped small-scale local businesses import materials and machinery to help them grow. Subsequently, IFC also made a $28.5million investment for a 20% equity partnership. The transaction is the largest FDI in Bhutan to date.
Partnering for Growth in Tourism: The tourism industry is a key economic sector for Bhutan. It creates employment, and is a major contributor to foreign exchange earnings and tax revenues. Zhiwa Ling Hotel, promoted by the Yangphel Group, is a locally owned and operated five-star property located in Paro, Bhutan. In 2015, IFC committed a $3.5 million loan to Zhiwa Ling Hotel. This loan represents the first external commercial borrowing availed by a fully private Bhutanese corporate entity. The increased capacity will cater to the growing numbers of visitors to Bhutan.
Supporting the Development of Urban Infrastructure: Thimphu City, the capital of Bhutan, is growing fast and faces severe congestion. To address the challenges and prepare for future growth, the Royal Government of Bhutan, through the Thimphu City Municipality, envisioned the creation of off-street parking facilities. The municipality partnered with IFC to develop multi-level off-street parking facilities. Thimphu Parking is the first PPP in the country in the urban infrastructure space, and has cleared the way for many more such projects to develop urban infrastructure sustainably. More importantly, it has cleared the way and made life easier for the 110,000 Bhutanese who live in the capital city of Thimphu.
Published in March 2016