Frequently asked questions:
I Are there any limits to IFC’s financial I Does IFC invest in all emerging markets?
Typically, in loans and equity, IFC will finance
up to 35 percent of a new project and 50
IFC invests in private projects and companies in
emerging market member countries that are
classified by the World Bank as having low or
percent of an expansion project, with an
upper limit of 25 percent of the capital
middle income. The 181 member countries
include all the major investment destinations.
I When is IFC willing to contribute equity?
I Does IFC guarantee protection from
IFC will provide equity when the financial No. However, IFC’s participation in a project
structure will benefit from IFC’s participa- mitigates political risks, which benefits all
tion, when the owners express an interest in stakeholders in the project. Co-investment with
IFC’s participation, and when IFC sees a IFC involves a long-term partnership for an
strong potential for profit and development investment or a series of investments in emerging
impact. markets. In case of difficulty, IFC works closely
with partners in an affected project to address
I Is IFC a long-term equity partner?
issues with the relevant government or private
IFC will remain in a project as long as its
presence is needed for financial and risk
IFC’s mission is to promote sustainable
mitigation reasons. IFC will require an exit I Can IFC mobilize other financing sources?
private sector investment in developing
mechanism, which could be a private Yes. IFC can offer loan participations services
countries, helping reduce poverty
placement, put option, or placement on through partnering with banks or other finan-
and improve people’s lives.
the market. cial institutions.
I Does IFC provide long-term loans? I What other benefits does IFC investment
Yes. IFC provides loan terms that enhance provide? For further information, please contact:
the project’s sustainability. Grace periods An IFC investment is often seen as a stamp of Reyaz A. Ahmad 1-202-473-7785 or email@example.com
and tenors are matched to the project’s abil- approval, given IFC’s status and the care it takes
ity to repay. in evaluating its investments. IFC provides
support on corporate governance and on
I Can IFC be the lead lender?
environmental and social sustainability, where
IFC typically takes the lead in organizing
financing for its projects. However, IFC
almost never holds the majority exposure in I How is IFC supporting existing and new
IFC: A knowledgeable partner
a project or company. Whenever possible clients during the current financial crisis?
in the emerging markets
and practical, IFC will leverage its own As part of its counter-cyclical investing role, IFC
investment through loan participations to continues to support its existing clients and to
International Finance Corporation
one or more international commercial banks. invest in projects with new clients during the
2121 Pennsylvania Avenue, N.W.
present crisis; IFC continues to have a strategic Washington, D.C. 20433
focus on climate-change related investments. USA
IFC’s wide range of financial products and services: Facts about wind and solar power: opment of renewable energy infrastructure
(ie solar or wind farms) in these countries.
I IFC provides long-term debt, quasi-equity, and equity I World electricity demand expected to double by
IFC is agnostic with respect to technology
financing for private sector investments on market 2030; grid parity for renewables is achievable
and is willing to examine alternative solu-
terms, in the form of project or corporate finance. within ten years in most major power markets.
tions; IFC also has the capability and interest
I In some countries where only short- to medium-term I Solar photovoltaic (PV) production represents the to invest in promising early-stage technolo-
financing is available, IFC can provide long-term funds world’s fastest-growing energy technology, with gies on a selective basis.
(8-12 years), sometimes in local currency. 60 percent growth in 2007 alone.
I IFC has global experience in helping local
I IFC has extensive local knowledge and contacts I Wind power can play key role in addressing and foreign investors navigate a complex
through offices in some 80 emerging markets. climate change and CO2 emissions, but it currently and changing business environment. As a
accounts for only 1 percent of the world’s public entity working in the private sector,
I IFC can also mobilize additional funding from interna-
electricity consumption. IFC is an ideal partner to investors in these
tional commercial banks, which would otherwise not
be willing to invest (or would invest for the short term
IFC prioritizes renewable investments because
IFC is the largest multilateral source of only) because of country risk factors. Such mobilization I As the industry moves into the emerging
the industry in developing countries can:
loans and equity finance for private is due to the reduction in political risk that typically markets, there are many opportunities for
results from coinvesting with IFC. As a member of the I Play a critical role in driving costs down, making alliances between companies in industrial
enterprises in emerging markets.
World Bank Group, IFC has preferred creditor status in renewable energy sources more competitive with and developing countries. IFC has an unri-
I IFC, a member of the World Bank Group, specializes the countries in which it invests, the benefits of which conventional energy and eventually achieving valed presence in most developing countries
in investment in private companies and extend to the projects it supports. grid parity and the financial and technical expertise to
projects in emerging markets, including China, India assist in this process.
I IFC also participates in corporate restructuring proj- I Reduce poverty by expanding access to affordable
ects by assisting viable companies in realigning their sources of electricity
I IFC’s shareholders are 181 developed and develop- IFC’s investment in renewables:
operational cash flows with their financial obligations
I Foster infrastructure expansion
ing countries represented on IFC’s Board of through financial restructuring measures. I ENN Energy Co Ltd, part of China’s XinAo
Directors by their governments. I Increase employment in the manufacturing and Group. IFC’s debt and equity package will
The worldwide renewables industry: services supply chain supporting renewable energy enable the company to produce latest-gen-
I At the end of fiscal year 2008, IFC had a net worth
generation eration, thin-film-based solar photovoltaic
of $18.3 billion and a total committed portfolio of I Significant growth in production volumes in recent
$39.8 billion. The committed portfolio includes modules on a large-scale basis for the first
years due to increased government support for renew- I Mitigate the impacts of climate change
investments in 1,490 companies in 122 countries. time, driving down production costs and
able energy, and in response to higher oil, gas and
stimulating the development of the local
other energy prices; growth continues at more moder- IFC can help, with expertise as well as financing:
I IFC is unique among international financial institu- solar photovoltaic market. Thin-film solar PV
ate rates notwithstanding the crisis.
tions, with a global focus and strong local presence. I IFC has been investing successfully in renewable modules are expected to account for 30 per-
IFC staff are based in 100 cities in 81 countries. I Highly capital-intensive; lower supply chain and compo- technologies since 1989. IFC can support the estab- cent of all installations by 2015.
nents costs leading to installation cost reductions and lishment and/or expansion
I IFC invests in sustainable private enterprises that I Moser Baer, a diversified company in India
increased competitiveness; continuous innovation mak- of manufacturing and serv-
benefit the economy, promote a sound environ- that is the world’s leading manufacturer of
ing new technology more affordable and more scalable. ice businesses in develop-
ment and social well-being, and are examples of CD and DVD recordable discs. IFC provided a
ing countries, and provide
good business for other entrepreneurs. I Budding industry clusters in emerging market coun- loan to support the company’s expansion
guidance to manufacturers
tries; help to accelerate cost reductions and achieve into solar photovoltaic cell and module
seeking to establish
grid parity; wind market established in larger develop- manufacturing.
themselves in developing
ing countries; solar market in developing countries
countries. Through its
expected to take off once grid parity is achieved.
Infrastructure group, IFC
can also support the devel-