IFC has developed solutions for various types of partners to invest alongside us ― or share risk with us ― as we lend to businesses in emerging and fragile markets.
Commercial banks are the cornerstone of IFC's global syndications program. For more than 60 years, IFC has relied on banks to extend our lending capacity to developing-country firms operating in infrastructure, information technology, the real sector, and the financial sector.
We have successfully syndicated over $50 billion in loans for borrowers in more than 90 countries to this critical set of partners. Nearly 200 international commercial banks are presently eligible lenders in our B Loan program.
Global banks typically co-invest alongside us in loans denominated in hard currencies, where we are lender of record. The B Loan structure offers commercial banks the added protection of IFC’s privileges and immunities.
We work with a growing network of local commercial banks to source additional local currency financing for our borrowers, most often under a parallel loan structure. We also are leading commercial lending markets in the development of new standards, such as the Green Loan Principles, to help our partners better measure their contributions to impact and sustainability.
IFC is able to partner with international banks to extend additional support for their clients' operations in developing countries with project finance and corporate loans, equity, guarantees, trade finance and working capital products.
Development Finance Institutions
As the only private-sector development institution with a global mandate, IFC leverages its broad footprint in over 100 countries to source unique impact investing opportunities for many public-sector partners.
These partners include more than 30 multilateral and bilateral development banks that are signatories to our Master Cooperation Agreement (MCA), a co-lending framework that standardizes documentation and enhances efficiency for both borrowers and lenders.
We work with MCA signatories to identify developing-country firms that are viable targets for impact loans. These loans reduce poverty, promote economic prosperity, and contribute to a more sustainable and equitable future.
Together, IFC and its fellow development institutions jointly support these clients with parallel injections of debt capital. Since 2010, IFC has successfully syndicated more than $10 billion under the MCA program.
A new extension of the MCA, the Joint Cooperation Framework Agreement (JCFA), enables other lenders to play the role of lead arranger. The JCFA also creates a structure for partnership in upstream project development work, as DFIs focus their efforts on building a larger pipeline of bankable projects in developing countries.
Export Credit Agencies
Export Credit Agencies (ECAs) are financial entities, often sponsored by national governments, with mandates to help domestic private companies manage the risk associated with pursuing new trade and investment opportunities in international markets.
When ECAs are supporting their clients to do more business in developing economies, IFC can leverage its global footprint across more than 100 countries to introduce those clients to local firms, provide debt, equity, trade finance and other products from our own balance sheet, and bring in other syndications partners to create a comprehensive financing solution.
Our financing and syndications benefit from IFC's world-class standards in risk management and corporate governance, as well as measurement and reporting of environmental and social impact.
ECAs typically join IFC to directly lend alongside us as parallel lenders or to provide cover to commercial banks under a separate parallel loan tranche.
We are currently building our relationships with the ECA community as a new avenue to leverage common synergies between ECAs and development finance institutions and jointly create new opportunities for partnership and co-investment.
Impact investors will find in IFC a like-minded partner. Our mission is to economic development in our member countries by encouraging the growth of productive private enterprise. We are the original impact investor, and we aim to have a positive impact on people’s lives wherever we operate.
We have always considered the social, environmental and economic impacts of our investments. Our Operating Principles for Impact Management, a set of guidelines based on how we manage and report impact, has set a common standard for other investors to adopt.
Our impact-rating system, called the Anticipated Impact Measurement and Monitoring Framework, is used to evaluate every investment we make by considering expected development outcomes, as well as effects on market creation.
IFC welcomes established impact investors, as well as those contemplating entering the responsible investing space for the first time, to join us as syndications partners. Our products enable impact investors to expand their footprints into diverse opportunities across key economic sectors in developing countries around the world.
Eligible partners can participate in individual investments via B Loans; other opportunities may exist to join us as parallel lenders. Investors interested in building a globally diversified senior loan portfolio with IFC may also consider joining our Managed Co-Lending Portfolio Program.
Institutional investors as a collective hold hundreds of trillions of dollars of capital. Over the coming decades, trillions of dollars of investment will be needed in key economic sectors like infrastructure, clean technology, and sustainable agriculture to achieve shared global development goals and continue to help lift people out of poverty.
As IFC leads the global community in looking for ways to shrink the enormous gaps in financing supply, partnering with institutional investors must be part of the solution.
To date, however, it has proven remarkably difficult to develop vehicles that make it easy for institutional investors to allocate even small parts of their vast holdings to the impact loans delivered by development organizations to emerging-market borrowers.
The Managed Co-Lending Portfolio Program (MCPP) is IFC’s syndications platform for institutional investors. The MCPP is one of the most successful efforts to date to connect institutional investors with impact-driven opportunities that support global development priorities, especially in IDA-eligible countries and fragile and conflict-affected situations.
A new iteration of the program aligned with the goals of the Paris Climate Agreement is currently under development.
Much like impact investing has grown in popularity among asset managers, so too have insurance companies adopted the concept of "impact underwriting." Thanks to this growing interest in generating impact, insurance companies are a new and increasingly critical set of syndications partners for development institutions like IFC.
As the global community seeks ways to attract more private capital to developing economies, insurers offer a source of risk appetite that development banks can use to make larger loans to their borrowers. This expands private mobilization efforts to reach a broader set of borrowers and cover a bigger share of their investment portfolios.
IFC currently works with more than a dozen private insurers that provide us with a comprehensive non-payment insurance product on our medium- and long-term loans to borrowers, as well as trade credit insurance on our short-term loans and guarantees.
Under our Managed Co-Lending Portfolio Program, several insurers have partnered with us on a treaty (portfolio) basis to underwrite eligible loans we make to borrowers in the financial and infrastructure sectors. We may also engage insurers on a facultative (single-borrower) basis as part of our traditional syndications process to take on a portion of the credit risk we are taking for our own account.
Over time, we have deepened our relationships with insurers and expanded their partnership to cover a growing range of assets including Basel III Tier 2 subordinated debt, debt securities issuances, and local currency-denominated loans.
Working together with institutions like IFC, insurers are helping foster greater investment in efforts that provide COVID-19 relief, lift the world's poorest out of poverty, and contribute to achieving the U.N. Sustainable Development Goals.