In fiscal year 2014, IFC committed $2.2 billion in MENA, including $509 million mobilized from other investors, and an advisory program worth a total of $105 million spread over 96 projects.
Boosting Access to Finance and Supporting Inclusion
Last year, we focused on increasing access to finance for the region’s micro, small and medium enterprises to help them expand and create jobs. We also worked to empower young people and women so they could play a greater role in the economy. During FY14, IFC:
• Provided credit-risk protection to Crédit Agricole Corporate and Investment Bank, to reduce lending risks, and expand access to finance. Under the transaction—known as a credit-risk transfer—IFC provides a $90 million guarantee on a $2 billion portfolio of assets related to emerging markets.
• Committed $15 million to EuroMena III, a private equity fund that will support SMEs in Egypt, Lebanon, and Jordan, giving them the chance to expand and create jobs.
• Provided a loan worth up to $2 million to FINCA Jordan, a leading Jordanian microfinance organization, to help boost its lending to businesses run by women and expand its branch network, especially in rural areas.
• Provided a loan of $20 million to Attawfiq Micro-Finance, part of an effort to help micro enterprises in Morocco and drive economic development across the country.
Supporting Fragile and Conflict-Affected States
The Middle East and North Africa is home to a number of fragile and conflict-affected states facing severe political and economic challenges.
IFC is continuing its work in these countries, from rebuilding damaged infrastructure to strategic investments to boost the private sector and help build a solid foundation for shared prosperity. During FY14, IFC:
• Made a total investment of $10 million (including $8.3 million in MIGA mobilization) in Nafith, a leading logistics company, to help manage freight in four major Iraqi ports. This will help support cross border trade and boost economic development, as well as contributing to developing a more diverse Iraqi economy, less reliant on the oil sector.
• Invested $10 million in a new venture capital fund, Wamda Ventures I LP, that will focus on the technology sector in the Middle East and North Africa.
• Invested $14 million in a multi-use extended stay greenfield property in Erbil to support much needed business infrastructure in the area.
• Committed up to $3 million as an equity investment in the West Bank’s Palestine Growth Capital Fund, managed by the Abraaj Group, to help provide long-term financing to a range of SMEs. IFC will also provide the fund with specialized advice on best practice to help improve sustainability.
Addressing Climate Change and Improving Infrastructure
We work to help businesses become more energy efficient, enable the private sector to develop renewable sources of power, and support firms at they cut greenhouse gas emissions. We do this through a combination of investments and advisory services. During FY14, IFC:
• Helped Fransabank Group extend financial support to businesses and households to encourage them to adopt clean energy and energy efficient technology, reduce costs, and combat climate change. The $13 million financial package includes up to $4.5 million from the IFC-Canada Climate Change Program.
• Contributed the largest foreign investment to the Pakistan power sector in the past 15 years to help build the UCH-II. The new lower cost power plant will provide annual savings of around $300 million and generate enough electricity to supply 6 million people, as well as saving the country’s power sector hundreds of millions of dollars and cutting its energy deficit.
• Invested in a new 50 megawatt wind farm in Sindh province in Pakistan to help meet a rising demand for electricity and provide an extra 270,000 people with environmentally friendly power every year. The wind farm will also contribute to a massive reduction in greenhouse gases.
• Arranged a $221 million debt package to support the development of a pioneering wind farm in Jordan. With demand for electricity increasing at about 8 percent annually, this will help boost the country’s supply of renewable energy and encourage economic development.
Championing Economic Integration and South-South Investments
Part of IFC’s strategy of supporting the private sector in MENA is to help companies expand throughout the region and other emerging markets. We do this by encouraging and investing in regional champions, which are companies that have the ability to take their expertise abroad, share their know-how, create jobs, and raise standards.
This is vital because the MENA region lags a long way behind the rest of the world in terms of economic integration and foreign investment. A majority of the intra-regional investment in MENA begins with GCC-based companies, which are well placed to demonstrate the big impact that is possible through South-South investments, especially in the infrastructure and manufacturing sectors.
But IFC has also encouraged investment from less developed economies in the region, and opened new paths to Sub-Saharan Africa. Among other efforts during FY14, IFC:
• Invested $100 million in ACWA Power, which will help the Saudi-based company significantly increase the amount of power it generates from renewable sources and meet a growing energy demand throughout MENA.
• Provided subordinated loans of $150 million to Bank Audi, the largest bank in Lebanon. The loans will expand Bank Audi’s capital base and support its regional growth plans, strengthening economic integration between developing economies and creating jobs.
• Made a $35 million loan to Elif Plastik, Turkey’s largest supplier of flexible plastic packaging, to help the company expand into Egypt, create jobs, improve local know-how, and bolster supply chains.
IFC's strategy in the region is to invest in several sectors, including:
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit www.ifc.org
IFC offers an array of financial products and services to its clients and continues to develop new financial tools that enable companies to manage risk and broaden their access to foreign and domestic capital markets.