What's Up At IFC
What's new at the International Finance Corporation (IFC)?Â Three recent projects demonstrate theÂ flexibility and scope of the IFC, an independent member of the World Bank Group that offers investments and advisory services to build the private sector in emerging markets.
On March 30, 2010, the IFC announced it will provide a $300,000 investment to a microfinance start-up, Utkarsh Micro Finance Pvt Ltd., to serve small borrowers in Indiaâs low-income state of Uttar Pradesh and other parts of northern India. In the next five years, Utkarsh expects to reach more than 500,000 women borrowers in the most poorly served markets.Â Access to microfinance is particularly limited in low-income states like Uttar Pradesh. IFCâs support to Utkarsh will help make microcredit accessible in rural, semi-urban, and underserved areas. It will also equip the company to build extensive banking relationships that will be critical as the company expands and seeks debt funding.
On March 26, 2010 the IFC signed a $50 million financing agreement and $60 million syndication agreement with the Jordan Phosphate Mines Company, the largest employer in Jordan, to help the fertilizer company relocate a phosphate export terminal, expand, and create jobs. The Jordan Phosphate Mines Company is relocating the phosphate terminal in Aqaba to a new location at the Southern Industrial Zone, to support the Jordanian governmentâs long-term strategy to transform the areaâs infrastructure to better accommodate tourism. Tourism is a significant contributor to Jordanâs GDP and the areaâs rehabilitation is expected to spur economic growth. JPMC will build a new world-class terminal that will enable it to expand its reach in the international fertilizer market.
On March 23, 2010 the IFC entered intoÂ a new swap transaction (under an ISDA Master Agreement and creditÂ arrangementsÂ established in 2004) with TBC Bank, Georgia's largest bank.Â The current transaction hedges TBC'sÂ U.S. dollar interest-rate risk on its outstanding long-term borrowings at favorable rates. The swapÂ is part of IFCâs broader strategy to improve risk-management capacity within its client banks and introduce innovative products to its clients in Central and Eastern Europe.Â
Not a bad triple play for one week: a loan to a microfinance start-up in Northern India; a loan and syndication agreement to move a phosphate business and make way for tourism in Jordan; and an interest rate swap with a Georgian bank.Â With $2.4 Billion in capital provided by member countries, the IFC, under the leadership of CEO Lars Thunell, is looking for ways to help the private sector improve lives in emerging markets throughout the world.
Photo credit: acameronhuff