IFC is often the first international issuer of local-currency bonds in many countries.
Strong local capital markets are the foundation for a prosperous private sector. They reduce countries' dependence on foreign debt, protecting economies from sudden swings in international capital flows.
Such markets create access to long-term local-currency finance and help mobilize funds to finance infrastructure and other areas essential for the growth of the private sector—the key engine of job creation in developing countries.
IFC is a global advocate for efficient local capital markets, and we play an important role in their development in emerging countries. We often are the first international issuer of local-currency bonds in these countries. In issuing bonds, we work closely with regulators and investors to help improve the regulatory framework, encourage greater participation in the local markets, and provide a model for other international issuers.
Over the years, IFC has issued bonds in 12 local currencies—including the Brazilian real, the Russian ruble, the Nigerian naira, the Malaysian ringgit, and the Chinese renminbi. We have provided over $10 billion in local-currency financing across 58 currencies—more than any other international finance institution.
In Nigeria this year, we were the first foreign institution to issue a naira-denominated bond, raising the equivalent of $75 million that will be used to support IFC's development program in the country. All investors were Nigerian pension funds, asset managers, and banks looking to diversify their portfolios. We worked with the Nigerian government and regulators to help them develop a framework that encourages more corporate issuances in the local markets. In addition, we issued the first inflation-indexed bond by a foreign issuer in Russia.
In China, we have made a total of six local-currency investments so far to expand access to finance, promote food safety, and help increase the availability of high-quality and affordable drugs. Those investments reflected an earlier achievement—our 2011 agreement with Chinese banks to swap U.S. dollars into Chinese renminbi to provide local-currency loans. We were the first multilateral institution to sign such an agreement.
Smaller enterprises often face the greatest difficulty in obtaining local-currency financing, a challenge IFC is helping them overcome. In the Dominican Republic this year, we issued the first local-currency bond by an international finance institution, raising $10 million that we invested in two microfinance institutions—Fondesa, which tends to make small loans of less than $1,000; and La Nacional, which finances low-income mortgages with an average home value of about $30,000.