The Managed Co-Lending Portfolio Program (MCPP) is IFC's syndications platform for institutional investors. Since its launch in 2013, the MCPP has raised over $10 billion from 11 partners and earned global recognition for its groundbreaking approach to unlock institutional capital for direct lending to IFC’s borrowers in developing countries.
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. MCPP One Planet, a new iteration of the program aligned with the goals of the Paris Climate Agreement, is currently under development.
How It Works
The MCPP creates opportunities for institutional investors to invest alongside IFC on commercial terms in globally diversified loan portfolios that mimic IFC's own portfolio—similar to an index fund.
Investors set loan eligibility criteria and portfolio concentration limits in an upfront agreement with IFC. Investors then pledge capital and, as IFC identifies eligible new transactions, financing from investors is allocated alongside IFC's own loans. Project appraisal, approval, commitment, and supervision are delegated to IFC.
Three iterations of the platform cater to the unique needs of sovereign funds, private asset managers, and insurance companies.
Benefits to Investors
- Cost effective delivery process that directly leverages IFC’s origination, processing, and supervision capacity and lending experience across a broad and diverse set of emerging market countries
- Priority access to a proprietary pipeline of diversified emerging market loans, with the ability to tailor eligibility to reflect a specific investment strategy
- Various investment structures available to meet investor needs
- Borrower provides irrevocable consent or decline of MCPP financing upfront
- IFC interfaces with borrower as Lender of Record on behalf of the investor
- Aligns incentives through a co-investment approach where IFC retains loan exposure for its own account equal to or greater than that of the investor in any individual loan
- Floating rate loans have limited correlation with other asset classes and minimal duration, providing upside potential in rising interest rate environments
- Steady cash flow stream from principal and interest payments as loans amortize
- IFC manages the supervision process (waivers and amendments)
- Benefits from IFC’s specialized workout capacity
- Best practice approach to mitigating environmental, social, and governance risk
Benefits to Borrowers
- MCPP investor approval is generally sought at mandate stage, thereby offering certainty of co-investor financing much earlier than in traditional syndications
- Facilitates larger financing amounts in some cases, on the same terms as IFC’s A Loan, including longer tenors
- Enables financing where IFC’s country or borrower headroom is limited and in countries (IDA/FCS/LIC) and sectors (including climate adaptation/mitigation) where third-party financing is challenging
- IFC is the sole negotiating party, leading to simpler negotiations relative to traditional syndications, where co-lenders have more influence on terms, and potentially reduced time to commitment
- Reduces transaction costs through a streamlined engagement with IFC relative to traditional syndications