International Finance Corporation (IFC)

WASHINGTON

The International Finance Corporation (IFC) is a member of the World Bank Group. IFC is the largest multilateral source of loan and equity financing for private sector projects in developing countries. IFC's particular focus is to promote economic development by encouraging the growth of productive enterprise and efficient capital markets in its member countries.

Eligibility: To be eligible for IFC financing, the project must usually be located in a developing member country. Exceptions are made for projects in information technology or other sectors where the project can be located in an industrialized member country as long as the benefits of the project primarily accrue to developing country members. Projects must be private sector dominated, technically sound, and have good prospects of being profitable. Projects must benefit the local economy and follow the environmental and social standards of the IFC and the host country.

Types of Projects Funded:The IFC finances projects in all types of industries and sectors, including manufacturing, infrastructure, tourism, health and education, and financial services.

Environmental Opportunities Facility: This special facility provides catalytic funding for projects that produce goods or services that reduce pollution or improve the use of scarce resources such as water or energy.

Financial Instruments: : IFC limits the total amount of own-account debt and equity financing it will provide for any single project. For new projects the maximum is 25% of the total estimated project costs, or, on an exceptional basis, up to 35% in small projects. For expansion projects IFC may provide up to 50% of the project cost, provided its investments do not exceed 25% of the total capitalization of the project company (see: http://www2.ifc.org/proserv/products/basics/basics.html).

Loans: Own Account loans (or A-Loans) are generally in the range of $USD 1 million - $USD 100 million subject to the limitations above. IFC lends at market rates and is willing to extend loans where repayment is from the project's generated cash flow.

Equity: IFC will take long-term (8-15 years) equity positions of 5%-15% in private companies or investment funds in developing member countries

IFC also offers a full range of quasi-equity products (debt & equity), syndicated loans from commercial banks, currency, interest rate, and other risk management products, and partial credit guarantees.

How to Apply for Financing: There is no standard application form for IFC financing. A company or entrepreneur, foreign or domestic, seeking to establish a new venture or expand an existing enterprise can approach IFC directly (for information on the application process, see: http://www2.ifc.org/proserv/apply/application/application.html).
The Corporation is organized by industry sector group and by region. IFC also has a network of field offices abroad.

Investors hoping to secure IFC financing will have to submit a variety of information including: project description, financial information, business structure, market prospects, technical and environmental feasibility, investment and financing requirements, projected timetable, and evidence that the project fits into the host country's economic development strategy (see: http://www2.ifc.org/proserv/apply/proposal/proposal.html)