Stepping up in a time of uncertainty.
The title of our Annual Report reflects our determination to step forward, with a sense of urgency, when the world needs us most.
In an environment fraught with uncertainties, confronting mounting challenges with decisiveness and resolve is the only way forward.
The slow vaccination rates in the developing world and the emergence of new variants prolonged the impacts of the COVID-19 pandemic. The war in Ukraine unleashed a humanitarian crisis in the region, triggered a global food crisis, and further disrupted global supply chains. Soaring inflation worsened poverty and threatened essential investments in emerging markets. More frequent and intense climate events provided an ominous glimpse at the consequences of a continued disregard for the planet.
Taken together, these challenges point toward a singular truth: there is no going back to where we were before. We have entered a new normal, one that will require new partnerships and creative mindsets to pave the way for a more sustainable, resilient, and inclusive future.
What does the new normal demand from IFC? This topic has weighed heavily on my mind this year. I am incredibly proud of what our team has accomplished in the face of unprecedented uncertainty and growing fragility around the world. Fiscal Year 2022 was another record-setting year, with total investment commitments of $32.8 billion. These investments created regional manufacturing hubs that can produce vaccines and other essential goods, helped commerce flow in fragile and conflict-affected areas, and kept climate projects on track amid economic anxiety that could have derailed them.
When I step back and reflect on the totality of IFC’s accomplishments, a common thread emerges: IFC’s ability to defy uncertainty and drive outcomes that change lives. Our ability to step up in the most challenging circumstances and bring others along. Our willingness to take risks and seize opportunities.
Countries around the world are carrying the weight of converging crises. They are feeling the pull to turn inward, shore up resources, and focus on national concerns. But strong nations and close global ties are not and should not be mutually exclusive goals.
To keep trade flowing across borders in turbulent times, IFC committed record amounts in trade financing support to emerging markets, especially low-income countries.
Another example of what is possible is building medical supply chains to address the pandemic. Since March 2020, IFC has invested and mobilized more than $2.2 billion to help get vaccines, personal protective equipment, and medical supplies into emerging markets, with a special focus on regional facilities and distribution channels in Africa that can serve local populations long after the COVID-19 crisis subsides.
The potential implications of this approach go far beyond healthcare. We envision similar opportunities to build resilient ecosystems in areas like agriculture — and therefore food security — and housing. In fact, we plan to use our Global Health Platform as a model for addressing food insecurity and targeting assistance to farmers, food processors, and fertilizer distributors in developing countries.
We will also continue to support opportunities that connect individuals with training, digital resources, and capital to launch businesses. These investments are key to driving the economic engines of emerging markets and promoting the kinds of innovation that can reshape the world.
Consider the energy crisis in the developing world, where 600 million people in Africa alone still live without access to electricity. The need to address this issue is not up for debate. Yet the ever-worsening impacts of climate change mean we cannot do it in the same way we always have. We need to find a new path forward: one that combines advancements in sustainable technologies, massive investments in adaptation with innovative trade agreements and financing tools. This is the only way we are going to succeed in powering Africa — while decarbonizing an industry that is one of the world’s largest contributors to greenhouse gas emissions — and helping middle income countries through their energy transition.
This is just one example of multidimensional development, but there are countless others. We need to both expand capital access for small businesses and invite in more women and underrepresented minorities to take part. We need to both build affordable housing and invest in more sustainable building materials.
It is hard to understate the power of these opportunities. They have the potential to create true win-win scenarios that benefit businesses, nations, and the entire global community. But they will also require sustained effort, new partnerships, and close collaboration between the public and private sectors and international development organizations like IFC.
Creating a Stronger IFC
In the new normal, we all have to get comfortable taking on more challenges, which means taking more risks and being willing to push the envelope. We have to want more for the future of the world, do more to achieve it, and be more like the best versions of ourselves.
IFC has already taken so many important steps forward to meet the demands of the moment. We continue to increase our climate-related commitments, and we are on track for all direct investments to be aligned with the Paris Agreement by 2025. We are also building on our legacy of setting global standards, launching new green taxonomies for climate-friendly projects or issuing guidelines for blue finance to promote the blue economy and save our oceans.
We continue to build out our capacity for taking on bold risks in a prudent manner. We know how important our willingness to push into challenging markets is, and we remain committed to charting paths that will encourage others to follow. We intend to grow our use of blended finance tools to help rebalance risks for private investors, and we will keep taking chances on game-changing ideas and innovations. We know not every investment is going to pan out, but the potential impact of the ones that do far outweigh the costs.
I am especially excited about the growth of our Upstream program, which has truly gone mainstream and become a central part of our operations. Now we’re shifting our focus to execute on a robust pipeline of commercially viable projects and convert these ideas into investments that move the needle and create new or expand existing markets including in fragile countries.
But even with all these initiatives, there is still more we can and must take on. That is why we are proactively improving how our organization works around the world. We are implementing changes to IFC’s organizational structure and decision-making frameworks that will remove silos, foster greater collaboration, and streamline decision-making so that frontline staff, who know on-the-ground conditions best, can respond quickly and effectively to clients.
My hope is that these changes will help optimize IFC for the future. I want us to be an organization that embraces change and nurtures talent. I want us to have a culture that is diverse, lively, and inclusive. Put simply, I want us to be nothing short of the very best in global development—for our clients, for the people and communities we serve, and for ourselves.
The new normal is not something we should fear. It is something that should inspire our work toward a better, brighter tomorrow.
IFC Managing Director