In response to international commercial banks' retrenchment from cross-border emerging market lending in fiscal year 2009, IFC began syndicating parallel loans to International Financial Institutions, and other ineligible B loan participants.
Under this approach, IFC acts as arranger—and can also act as administrative agent—by using its existing syndication platform, deal-structuring expertise, and global presence to identify investments, perform due diligence, and negotiate loan documents in cooperation with parallel lenders.
Lenders under this structure enjoy cost and time savings through this streamlined approach. Borrowers benefit from enhanced access to financing and time & cost savings throughout the life of the loan.
Master Cooperation Agreement
Cooperation among International Financial Institutions increased significantly following the global financial crisis in 2008 and the resulting lack of commercial banks' liquidity. In October 2009, IFC signed a Master Cooperation Agreement (MCA) with the three largest European Development Finance Institutions: DEG, FMO and Proparco. The agreement details the manner in which DFIs work together to co-finance projects when IFC is the mandated lead arranger. The MCA also provides documentation templates which significantly reduces costs and increases efficiency.
Nearly six years later, financing from IFIs continues to play a very important role in IFC's Syndicated Lending Program as the introduction of Basel III has significantly reduced the availability of long-term funding as well as commercial banks’ appetite for risk. There are now 26 MCA signatories (see chart below). MCA signatories have provided over $3 billion in parallel loans for clients since the establishment of MCA in 2009.
Date of Signing
International Finance Corporation
France's Société de Promotion et de Participation pour la Coopération Economique (Proparco)
Germany's Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG)
Netherlands' Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V (FMO)
Development Bank of Japan (DBJ)
Austria's The OPEC Fund for International Development (OFID)
Belgium's Societe Belge d'Investissement pour les Pays en Developpement SA/Investment Co. for Dev. Countries (BIO)
Black Sea Trade and Development Bank (BSTDB)
Oesterreichische Entwicklungsbank (OeEB) or Development Bank of Austria
Eurasian Development Bank
Arab Petroleum Investments Corp (APICORP)
United States' Overseas Private Investment Corporation (OPIC)
Islamic Corporation for the Development of the Private Sector (ICD)
Export Development Canada (EDC)
United Kingdom's Commonwealth Development Corporation (CDC)
Portugal's Sociedade para o Financiamento do Desenvolvimento (SOFID)
Banque Ouest-Africaine de Developpement "West African Development Bank" (BOAD)
Compañía Española de Financiación del Desarrollo (COFIDES)
International Investment Bank (IIB)
Hungarian Export-Import Bank (HEIB)
Swiss Investment Fund for Emerging Markets (SIFEM)
Finnish Fund for Industrial Cooperation Ltd (Finnfund)
Instituto de Credito Oficial (ICO)
Japan International Cooperation Agency (JICA)
Cassa Depositi e Prestiti (CDP)
PTC India Financial Services Ltd (PFS)
Indian Renewable Energy Development Agency (IREDA)
Eastern and Southern African Trade and Development Bank (PTA Bank)
Africa Finance Corporation
New Development Bank
The Hong Kong Mortgage Corporation Limited
Export Finance Australia