PRESENTATION TO JAPAN EXTERNAL TRADE ORGANIZATION

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Morris White
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1 PRESENTATION TO JAPAN EXTERNAL TRADE ORGANIZATION February 2017

2 IFC is a Private Sector Development Arm of the World Bank Group IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation MIGA Multilateral Investment and Guarantee Agency Est Est Est Est Role To promote institutional, legal and regulatory reform To promote institutional, legal and regulatory reform To promote private sector development To reduce political investment risk Clients Governments of member countries with per capita income between $1,025 and $6,055. Governments of poorest countries with per capita income of less than $1,025 Private companies in member countries Foreign investors in member countries Products Technical assistance Loans Policy Advice Technical assistance Interest Free Loans Policy Advice Investment through Loan, Equity, and Quasi-Equity Resource Mobilization Advisory Services Political Risk Insurance Shared Mission: To Promote Economic Development and Reduce Poverty 1

IFC Snapshot IFC is the largest multilateral source of financing for the emerging markets private sector Commentary IFC Fiscal Year June 2016 Highlights AAA rated by S&P and Moody s and has been

): $52 billion # of Portfolio Projects: 2,033 Long-term Investment Commitment for FY2016: $11.1 billion Mobilization* in FY2016: $7.

3 IFC Snapshot IFC is the largest multilateral source of financing for the emerging markets private sector Commentary IFC Fiscal Year June 2016 Highlights AAA rated by S&P and Moody s and has been profitable every year since inception in 1956 Provides both investment and advisory services Committed Portfolio (own acct.): $52 billion # of Portfolio Projects: 2,033 Long-term Investment Commitment for FY2016: $11.1 billion Mobilization* in FY2016: $7.7 billion Debt / equity exposure in 128 countries and over 2,000 companies In 2016, IFC s private sector clients provided: 2.4 million jobs / power, water, and gas distribution to more than 123 million customers / more than $400 billion in loans to micro, small, and medium enterprises / Medical treatment to 32 million patients / education to 4.6 million students Advice on environmental and social issues. IFC E&S Performance Standards adopted by over 50 global institutions In-house syndications department working with over 200 banks Committed Portfolio by Industry Committed Portfolio by Region 2 * Syndication, etc. * Syndicated loans, IFC Asset Management Company, etc.

IFC Provides A Full-suite Of Financial Products Direct

Services Short-term Finance Senior Debt Mezzanine / Quasi- Equity

expansion, greenfield (when sponsors have strong financial

participating loans Convertibles Other hybrid products

Institutions IFC Asset Management Company Concessional fundings

sharing facility (guarantee on portfolio) Partial credit

Access to finance Business advisory (environment, linkages, IFC

4 IFC Provides A Full-suite Of Financial Products Direct Investments Resource Mobilization Structured Finance Advisory Services Short-term Finance Senior Debt Mezzanine / Quasi- Equity Working capital financing Corporate loans Project finance expansion, greenfield (when sponsors have strong financial capability and relevant experience) Subordinated loans Income participating loans Convertibles Other hybrid products Syndication with commercial banks, DFIs and other financial Institutions IFC Asset Management Company Concessional fundings to allow IFC to take on additional risk where applicable Risk sharing facility (guarantee on portfolio) Partial credit guarantee Investment in private equity funds Investment climate Access to finance Business advisory (environment, linkages, IFC against AIDS, corporate governance) Public-Private Partnerships Up to 20% shareholding Equity Long term investment horizon 3

5 Selling Points IFC is a development bank with the flexibility of a commercial bank #1 Long-term financing #2 Stamp of approval by going through IFC s rigorous due diligence, the company will be recognized as a credible company with international standards #3 #4 Best-in-class Environmental & Social (E&S) standards to analyze and assess potential E&S implications of the investment project; particularly bodes well in a greenfield agribusiness context Advisory Services to support value chain partners for capacity building and training (i.e. farmer training, access to finance, capacity building) #5 Global industry knowledge and network many clients appreciate input from IFC s industry specialists and investment officers #6 Political risk mitigation - IFC, as a member of the World Bank Group, positioned to facilitate macrolevel dialogues with host government officials #7 Counter-cyclical role we step up in difficult times 4

6 IFC S GLOBAL REACH 108 regional offices in 100 countries worldwide, AAA credit rating 3,687 staff (59% are based outside Washington DC)

IFC in Sub-saharan Africa Rabat Algiers Tunis Mediterranean Sea Beirut Jerusalem Cairo Amman Dubai Dakar Bamako Conakry Ouagadougou Abuja Freetown N Djamena Addis Ababa Sana a Monrovia

7 IFC in Sub-saharan Africa Rabat Algiers Tunis Mediterranean Sea Beirut Jerusalem Cairo Amman Dubai Dakar Bamako Conakry Ouagadougou Abuja Freetown N Djamena Addis Ababa Sana a Monrovia Abidjan Accra Lagos Douala Bangui Juba Kinshasa Bujumbura Kigali Nairobi Dar es-salaam INDIAN OCEAN ATLANTIC OCEAN Lusaka Antananarivo IFC Hub Offices IFC Country Offices Johannesburg Maputo 6

8 IFC in Côte d Ivoire IFC s Strategy in Côte d Ivoire is based on a four-pronged approach blending Investments and Advisory Services and focuses on helping to: strengthen the country s financial sector, in order to use the local financial institutions to provide access to finance to SMEs and other actors that IFC cannot assist directly (e.g. farmers), improve the overall infrastructure by supporting development of the electricity grid and road network, as well as expansion of port facilities, support the Ivorian agribusiness sector, through the value chain of key segments (e.g. cocoa, cotton, cashew, rubber, etc.), and assist in improving the country s business climate, by improving not only the Doing Business Indicators, but putting in place reforms that improve contractual transactions and reduce the cost of doing business. Sectors Total YTM (in mn of dollars) IFC Committed Portfolio (US$226 mn) Energy $801.6 Tourism $7.9 Transport $7.0 Agribusiness $53.6 Services $8.1 Extractives Industries $22.5 Financial Institutions $228.8 TOTAL $1, % 18.5% 54.5% Electric Power Finance & Insurance Manufacturing, Agribusiness & Services 7

9 Examples of Recent Interventions Financial Services IFC assists Ivorian banks in supporting their trade activities with the Trade Guarantee product and helps them mitigate exposure to risky segments such as SMEs, cooperatives, smallholders, via Risk-Sharing Facilities (RSFs). To facilitate the import-export activities, IFC has provided trade guarantee lines to four (4) local banks totaling US$50 million: US$10 million to Société Ivoirienne de Banque or SIB (subsidiary of Morocco-based Attijariwafa), a US$18 million line to BACI, a US$2 million line to Bank of Africa-Cote d Ivoire, and a US$20 million for Ecobank. IFC has also put in place five (5) Risk-Sharing Facilities, four of which are targeting SMEs in general. Agribusiness A customized approach mixing investment with advisory in large enterprises that have significant supply-chain contribution, by create a considerable impact over the next 4-5 years, taking a value-chain enhancement perspective. IFC partners with anchor agribusiness companies to support the development of Access-to-Finance (A2F) solutions for segments such as SMEs, smallholders, outgrowers and cooperatives (SIPRA, Cargill, Barry Callebaut). These investments (done in partnership with large agribusiness operators) provide IFC with a significant outreach to constituents at the bottom of the pyramid which IFC has been traditionally unable to serve. In line with helping remove the bottlenecks affecting the agribusiness value chain, IFC s Advisory team wrote the draft law for the Warehouse Receipts System (WRS) which was ratified by the Ivorian parliament in The WRS will help promote movable collateral and provide an instrument that financial institutions can use to provide financing for inventory (cashew, cereal, etc.). Investment Climate IFC s Advisory team has been working closely with the government to implement deeper, more meaningful reforms that will impact more significantly not only the Doing Business indicators, but also the overall business environment. During FY16, the following reforms were achieved: Dealing with construction permit: The One Stop Center (OSC) should be functional shortly, by mid-april. The e- construction permit is expected to be functional by mid-may. Paying taxes: Cote d Ivoire adopted a unique form for tax declaration and tax payment. This reform will reduce the frequency of tax payments from 62 times annually to 12 (once a month). Enforcing contracts: Judicial procedures are computerized since February Furthermore, a special circuit for small commercial disputes (less than XOF 3 million) was created and enacted by law within the commercial court. Today, it takes 30 days for trial and verdict of these small disputes, whereas it used to take a minimum of 90 days before. Getting credit: The Collateral Registry is functional since Feb 2016, and 98% of commercial banks are already using this registry. Resolving Insolvency: The OHADA Insolvency Act Uniform brought reform for the 17 country members. With this new Act Uniform, creditors have now the right to appeal against a court s decision disputing their insolvency claims. The appeal is exercised within 15 days from the court s decision. Starting a business: A new ordinance, adopted on Dec 9th 2015, eliminated the need for a public notary as well as the fees for creating a limited liability company (SARL). This new reform makes it easier to register a business: the number of procedures have been reduced, and the 120,000 CFA fees are eliminated 8

10 9 THANK YOU

COMMERCIAL FINANCE FOR INDIAN CITIES

COMMERCIAL FINANCE FOR INDIAN CITIES India: Poor Urban Service Provision and Low Investments Water and Wastewater Utilities 100% 80% 60% 40% 20% Solid Waste Sewage Treated (As a % of sewage generated)