PMFORUM Breaking News

In response to the global financial crisis, the International Finance Corporation (IFC) has announced a ramping up of support to developing countries. According to an announcement on 22 December, the IFC has launched or expanded four facilities aimed at addressing problems experienced by the private sector, which is critical to employment, recovery, and growth in developing economies.

Financing for the new facilities are expected to total about $30 billion over the next three years, combining funds from IFC and money mobilized from various sources, including governments and other international financial institutions. The facilities are:

Expanded trade finance program - Through its $3 billion Global Trade Finance Program, IFC is able to play a critical role and respond to the global credit crisis by supporting trade with emerging markets. The IFC Global Trade Finance Program facilitates trade by providing guarantees that cover the payment risk in trade transactions with local banks in emerging markets. This enables the continued flow of trade credit into the market. In response to the current financial crisis, an additional $1.5 billion was added to the existing $1.5 billion bringing the program's ceiling to $3 billion.

Bank Recapitalization Fund – The $3 billion Bank Recapitalization Fund, managed by IFC, is a global equity and debt fund which aims to help recapitalize banks in smaller emerging markets. Approved by IFC's Board in December 2008, the fund will provide funding to investee banks, thereby stabilizing them, speeding up economic recovery, and boosting job creation. The fund will provide investee banks with investment and advisory services.

Infrastructure Crisis Facility – The Infrastructure Crisis Facility will help ensure that viable, privately funded infrastructure projects in emerging markets have access to funding to weather the financial crisis. Infrastructure—roads, ports, and transmission lines—provides basic human services such as gas for heating or cooking, and it is central to enabling trade and competitiveness. Good infrastructure projects are a top priority in the quest for sustainable economic growth, but the unfolding financial crisis is endangering these projects. The facility will bridge the financing gap for private or public-private partnership infrastructure projects in emerging markets. IFC will provide $300 million to the fund and is seeking additional funding from governments and other institutions.

IFC Advisory Services – IFC is scaling up and refocusing its advisory services geared to financial institutions and governments and reform of financial infrastructure, including: Access to finance: Growing liquidity pressure means that financial institutions are cutting back most lending activities to consumers, entrepreneurs, and corporates. To speed up the recovery process and limit the credit crunch, IFC is helping financial institutions assess and quantify critical risks, and taking action to mitigate crisis impact. Business enabling environment: IFC will expand its advice on regulatory simplification, including assistance on the Doing Business reform agenda, trade logistics, and business tax reform; insolvency; and investor aftercare. Corporate governance: During the crisis, IFC aims to improve the competence of the boards of directors of corporations in emerging markets through targeted training.

The International Finance Corporation (IFC) is a member of the World Bank Group. IFC fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments. IFC helps companies and financial institutions in emerging markets create jobs, generate tax revenues, improve corporate governance and environmental performance, and contribute to their local communities. The goal is to improve lives, especially for the people who most need the benefits of growth. To learn more, visit http://www.ifc.org/.