On March 17, IFC’s Board approved $8 billion in fast-track financing to help companies affected by the outbreak. The IFC response is part of the World Bank Group’s $14 billion fast-track financing package.
With this financing, which is Phase 1 of IFC’s COVID-19 response, IFC will provide direct lending to existing clients affected by the outbreak, as well as support to financial institution partner clients so they can continue lending to businesses.
In these extraordinary times, IFC stands ready to adapt and expand its approach, as necessary.
Our experience from past shocks, including the global financial crisis in 2008, has taught us that keeping companies solvent is key to saving jobs and limiting the economic damage. Speed is of the essence.
IFC’s response will use instruments for which its Executive Board has already delegated authority to management on the deployment of funds.
IFC’s fast-track financing is available to existing IFC clients who demonstrate a clear impact on their business due to the COVID-19 pandemic. Among other criteria, clients must be in good standing with IFC and compliant with environmental, social, and governance (ESG) requirements. Given the importance to rapidly deploy financing to shore up private sector activity amidst the unprecedented context, IFC is first focusing on its existing clients which meet the criteria.
IFC is committed to transparency and disclosing information regarding the projects that receive COVID response support, while delivering much needed liquidity quickly. In line with the Board-approved criteria for projects with existing IFC financial institutions and real sector clients, IFC will disclose its COVID response support immediately following project commitment. For real sector clients, in cases where new material E&S risks are identified and cannot be mitigated under existing mechanisms, IFC will disclose these projects 30 or 60 days prior to commitment depending on the Project categorization. Here is a list of IFC COVID response projects.
Stakeholder engagement is critical to our ability to deliver development results. Stakeholders must also have a safe space and the ability to provide feedback and raise concerns with IFC and our clients. In recognition of the increased risk of reprisals and retaliation in the context of COVID-19, IFC reaffirms its statement of zero tolerance on retaliation against civil society and project stakeholders.
Significant interest has been expressed for IFC’s $8 billion facility by nearly 300 IFC clients across all regions and diverse sectors (e.g., financial, health and pharmaceuticals, agribusiness, services, infrastructure etc.). Given the wide and deep impact of COVID-19, IFC expects that the facility will be fully utilized by our clients and potentially oversubscribed. To ensure that IFC continues to support private-sector development in low income and fragile and conflicted-affected countries, strong emphasis will be placed on supporting clients operating in these countries. In addition, IFC will leverage concessional financing from the IDA Private Sector Window (PSW) and other donor funds where appropriate, particularly to attract foreign direct investment into the more challenging low income and fragile countries.
On an ongoing basis and as part of IFC’s phase-two response, IFC will craft solutions that seek to soften the blow of the current crisis and help in the recovery and rebuilding phase for both new and existing clients. In partnership with the World Bank, special emphasis will be placed on “upstream” initiatives to tackle challenges, with the aim of ensuring long-term sustainability in emerging and developing markets, driven by private-sector solutions.