Across the world, at least $100 trillion in financing is available from institutional investors — such as insurance companies, sovereign funds, and pension funds.
That’s more than enough to cover the $4.5 trillion in financing that developing countries need each year to achieve the Sustainable Development Goals by 2030. But tapping the world’s vast pool of private capital requires a new mind-set. Private investors can be mobilized to help address the most urgent development challenges — provided investment risks and returns are balanced appropriately.
IFC is a global leader in mobilizing private capital. We do it through two major channels. The first is our loan-syndications program, which since 1959 has mobilized $69 billion from over 500 financing partners for around 1,000 projects in 115 countries. The second, IFC Asset Management Company, has raised $10.1 billion in assets from institutional investors — including $2.3 billion from IFC.
The Managed Co-Lending Portfolio Program is our main loan-syndication platform. IFC created MCPP in 2013, when the People’s Bank of China pledged $3 billion for investment in IFC projects. Since then, the platform has more than doubled in size by including a variety of global institutional investors. In 2017, the Hong Kong Monetary Authority committed $1 billion to MCPP. This will support financing of projects in over 100 countries.
We continue to introduce fresh innovations, including credit-mobilization transactions. These transactions enable us to provide more financing to our clients by leveraging the risk-bearing capacity of insurance companies. Two recent examples are our MCPP Financial Institutions and MCPP Unfunded Risk Participation initiatives, which will tap $500 million apiece in unfunded credit insurance from Munich Re, Liberty Specialty Markets, and Swiss Re Corporate Solutions.
Credit mobilization helped IFC provide $185 million to Vietnam International Commercial Joint Stock Bank, enabling the bank to expand its portfolio of affordable mortgages and loans to small and medium enterprises. Two global insurers, Liberty Mutual and Munich Re, provided credit insurance to benefit the project. Overall, in FY18, credit-mobilization transactions supported $325 million of investments made for IFC’s own account.
In 2018, the IFC Emerging Asia Fund — managed by IFC Asset Management Company — reached final close, having raised $693 million to make growth-capital investments in 26 Asian countries. In Mozambique, we helped mobilize nearly $2.7 billion from a variety of lenders to support the Nacala Corridor railway project. The newly built 912-kilometer line will connect two landlocked countries — Zambia and Malawi — to the deepest port in southern Africa. It is expected to result in significant job creation in the region — up to 1 million jobs by 2040.