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IFC’s 3.0 strategy has never been more important than today, as the developing world struggles with the crippling economic impact of the global COVID-19 pandemic — and aspires to take advantage of an opportunity to build a better version of the world we live in.
As part of a larger World Bank Group crisis response package announced in March 2020, we began providing $8 billion in fast-track financing for existing clients whose operations and ability to comply with payment obligations were impacted. Having learned from past shocks, including the global financial crisis of 2008, we knew that moving fast to help keep companies solvent is a key to saving jobs and limiting economic damage. Our response package is structured around three broad themes: relief, restructuring, and recovery.
Examples from the first phase of our work, focusing on relief, include:
- Helping a leading Indian producer, JK Paper Limited, cover its working capital needs due to the impact of COVID-19 and any potential shortfall in cash flow generation with a $34 million loan. The financing will assist the company in maintaining payments to key raw material suppliers (including 50,000 small-scale farmers) and funding its distribution channels, which largely comprise micro, small, and medium enterprises.
- Assisting Nigeria’s Zenith Bank Plc, Africa’s sixth largest bank, to overcome challenges resulting from ongoing, limited access to foreign currency, working capital, and trade funding with a loan of up to $100 million. The financing will support Zenith clients in the health, pharmaceutical, food, and trading sectors, most of them SMEs.
- Helping Banco Daycoval, a leading mid-sized Brazilian bank, in expanding access to finance for 4,000 small and medium enterprises, including 500 women-owned businesses, in order to preserve jobs with a $100 million loan.
- Supporting small and medium enterprises in nine countries — Albania, Bosnia and Herzegovina, Ecuador, Kosovo, Moldova, North Macedonia, Romania, Serbia, and Ukraine — with a $100 million loan to ProCredit Holding to be channeled to ProCredit banks, assisting up to 2,270 small and medium enterprises to maintain employment levels and sustain their position in their respective markets.
We are now moving beyond this immediate response, working with countries to restructure and promote a recovery that is sustainable, inclusive, and climate-smart. This means directly helping firms become more resilient — to survive, bounce back, and accelerate their post-crisis recovery to bring back jobs and livelihoods.
Working Upstream becomes an imperative. Investment levels in developing countries have dropped significantly. We must work across the World Bank Group on policy reforms that will allow us to bring domestic and international private sector investors back to these markets. Specific sector reforms will allow IFC to implement project feasibility studies, de-risk projects, and create a pipeline of investments to encourage private investors to enter markets where they are needed most.
Recognizing a vast unmet need for funding to address the health impacts of COVID-19, IFC also laid the groundwork in fiscal 2020 for the launch of its $4 billion Global Health Platform. The first in our second phase of response packages, this platform will increase access for developing countries to health-care supplies needed to fight COVID-19, including masks, ventilators, test kits, and potential vaccines. IFC will work with multilateral development banks, development-finance institutions and other partners to mobilize additional financing.
Given the magnitude of the COVID-19 crisis, global recovery can only be expedited if we pool resources and share expertise. As the largest global development institution focused on the private sector in emerging markets, IFC is bringing development financial institutions together to strengthen our collective impact and mobilize private finance.
IFC’s $8B Pandemic Response Package
Relief. Restructuring. Recovery.
- $2 BILLIONREAL SECTOR ENVELOPE
- $2 BILLIONGLOBAL TRADE FINANCE PROGRAM
- $2 BILLIONWORKING CAPITAL SOLUTIONS PROGRAM
- $2 BILLIONGLOBAL TRADE LIQUIDITY & CRITICAL COMMODITIES FINANCE PROGRAMS