Washington, March 28, 2020—The World Bank Group welcomes the United States’ authorization of the $5.5-billion capital increase for the International Finance Corporation (IFC) as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), signed into law on Friday. The law also includes authorization of the United States’ welcome pledge to the 19th replenishment of IDA (IDA-19), the World Bank’s fund for the poorest countries.
The authorization of the capital increase for IFC, a member of the World Bank Group focused on the private sector in emerging markets, will enable IFC to work with other shareholders to finalize their funding for the capital increase, endorsed by IFC’s shareholders in 2018.
Under the capital increase, IFC will double its annual investment program to $48 billion by 2030 and triple its annual investments in the world’s poorest and most fragile countries.
The capital increase is an endorsement of IFC’s strategy to create markets and projects and promote private sector solutions to development challenges. It will more than triple IFC’s paid-in capital.
“The IFC capital increase will strengthen the World Bank Group’s ability to support growth-oriented country programs and private sector investments across emerging markets. The U.S. action is especially important given IFC’s large role in the COVID-19 response, where IFC is financing working capital, imports, exports, and critical investments in healthcare,” said David Malpass, President of the World Bank Group. “The U.S. authorization will help unlock investments from other IFC shareholders, enabling larger financial flows to the private sector and increasing our development impact.”
“The capital increase will enable IFC to deliver in the most difficult markets,” said Philippe Le Houérou, IFC’s Chief Executive Officer. “To fulfill our objective, we have been reforming IFC profoundly and will continue to change our business model, working proactively to create more opportunities for the private sector to invest more and to create more jobs.”
The authorization of the capital increase comes when IFC is bolstering its efforts to help countries– including the most vulnerable –cope and recover from the COVID-19 pandemic. As part of the World Bank Group’s $14-billion response package, IFC has committed $8 billion in fast-track financing to preserve economies, companies and jobs amid the crisis and to help them recover once the health emergency phase has passed.