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ADVISORY OPPORTUNITIES IN IFC
MILAGROS RIVAS SAIZGlobal Head, Advisory Services
IFC at a glance
1
PROVIDING DEVELOPMENT SOLUTIONS … Customized To Meet Client Needs
� A member of the World Bank Group
� Provides investment, advice, resource mobilization
� AAA credit rating; owned by 184 countries
� Mandate to reduce poverty & foster inclusive growth by creating markets
� Present in nearly 100 countries
IFC is the largest global development institution focused exclusively on the private sector in developing countries.
IFC: A MEMBER OF THE WORLD BANK GROUP
Loans to middle-income
and credit-worthy low-income country
governments
IBRD
InternationalBank for
Reconstruction and
Development
Interest-free loans and grants to governments
of poorestcountries
IDA
International Development Association
Solutions in private sector development
IFC
International Finance
Corporation
Guarantees of foreign direct
investment’s non-commercial risks
MIGA
Multilateral Investment Guarantee
Agency
Conciliation and arbitration of investment
disputes
ICSID
International Centre for
Settlement of Investment Disputes
WHAT WE DOIntegrated Solutions, Increased Impact
INVESTMENT
� Loans
� Equity
� Trade and Commodity Finance
� Syndications
� Derivative and Structured Finance
� Blended Finance
ADVICE
Innovative Solutions Combining IFC’s Expertise and Tools to:
� Help Create New Markets
� Unlock Investment Opportunities
� Strengthen Clients’ Performance and Impact
IFC ASSET MANAGEMENT
COMPANY
� Mobilizing and Managing Capital for Investment
49,5%
14,4%
9,7%
5,8%
3,6%
3,7%3,0%
8,3%2,0%
Financial Markets
Infrastructure
Agribusiness and Forestry
Health and Education
Tourism, Retail, and Property
Oil, Gas, and Mining
Funds
Manufacturing
Telecommunications and Information Technology
FY17 long-term investment commitments by industry
OUR INVESTMENTS
8%
26%
18%
29%
6%
13%Energy and Resource Efficiency
Investment Climate
Cross-Industry Areas
Financial Sector
Agribusiness
Public Private Partnerships
FY17 Advisory services: expenditures: $245 millionOUR ADVISORY
22,7%
14,7%
19,6%
17,6%
16,7%
8,0%0,7%
Latin America and the Caribbean
East Asia and the Pacific
Sub-Saharan Africa
Europe and Central Asia
South Asia
Middle East and North Africa
Global
FY17 LONG-TERM INVESTMENT COMMITMENTS BY REGIONCOMMITMENTS FOR IFC’S ACCOUNT: $11.9 BILLION
10%
14%
33%
17%
11%
9%
6%
Latin America and the Caribbean
East Asia and the Pacific
Sub-Saharan Africa
Europe and Central Asia
South Asia
Middle East and North Africa
Global
FY17 ADVISORY EXPENDITURES OF PROJECTS WITH CLIENTS BY REGIONTOTAL EXPENDITURES: $245.7 MILLION
10%
14%
33%
17%
11%
9%
6%
Latin America and the Caribbean
East Asia and the Pacific
Sub-Saharan Africa
Europe and Central Asia
South Asia
Middle East and North Africa
Global
FY17 ADVISORY EXPENDITURES OF PROJECTS WITH CLIENTS BY REGIONTOTAL EXPENDITURES: $245.7 MILLION
2.4 million jobsHealth services to 31.8 million
patients
Education to4.6 million students
Improvedopportunities for 3.5 million
farmers
Power generated for 48
million people
Water distribution to
21.8 million people
262.8 million customers
receiving phone connections
108 million people with
access to power
OUR REACH2016
IFC 3.0: Strategic Directions for the Future
Complex development challengesComplex development challengesComplex development challengesComplex development challenges
The world is facing increasingly The world is facing increasingly The world is facing increasingly The world is facing increasingly
complex development challenges:complex development challenges:complex development challenges:complex development challenges:
600m600m600m600m people to join labor market in
IDA & FCS countries in next decade
46%46%46%46% of the world’s poor will live in
FCS by 2030
1.2b1.2b1.2b1.2b people lack access to electricity
2b2b2b2b adults without basic financial
services
400m400m400m400m people without access to
essential health services
26m26m26m26m people pushed into poverty each
year due to extreme weather
PRIVATE SECTOR IS CRUCIAL TO TACKLE DEVELOPMENT CHA LLENGES
Role of development financeRole of development financeRole of development financeRole of development finance
$2.5 trillion of investment needed per $2.5 trillion of investment needed per $2.5 trillion of investment needed per $2.5 trillion of investment needed per
year to meet the SDGs: year to meet the SDGs: year to meet the SDGs: year to meet the SDGs:
Public finance alone, including ODA,
is insufficient
Private capital flows to emerging
markets are concentrated in high and
upper-middle income countries
Large pools of untapped private
capital are yet to be deployed in
developing markets
A new aid architecture for
development finance is
needed to crowd in
untapped capital from
private sector financiers,
especially in low income
countries and FCS
WBG APPROACH: Cascading Private-Public investments
1 23 4
Is there a sustainable private sector solution that limits public debt and contingent liabilities? If the answer is YES, we
promote private solutions
If the answer is NO, we ask: Is it because of:
� Policy or regulatory gaps or weaknesses? If so, we provide support for policy and regulatory reforms.
� Risks? If so, we assess whether World Bank Group instruments can mitigate them.
If the project requires public funding, we pursue that optionJORDAN
A privately managed airport has doubled passenger capacity, attracting $1 bn in government revenues.
• Adopt a “cascade” approach “cascade” approach “cascade” approach “cascade” approach to maximize the mobilization of
private sector investments
• Boost capital market developmentcapital market developmentcapital market developmentcapital market development
• Scale up platforms platforms platforms platforms and development instruments to mobilize
funding from private investors
• Increase focus on FCS and IDA focus on FCS and IDA focus on FCS and IDA focus on FCS and IDA countries
• Create new denew denew denew de----risk investment tools risk investment tools risk investment tools risk investment tools (Risk Mitigation , Long-term,
Local Currency Investments and Blended Finance)
• Promote Advisory services Advisory services Advisory services Advisory services to maximize the outcomes by
removing barriers to private investment, especially in IDA/FCS
IFC 3.0 STRATEGY: CREATING MARKETS AND CROWDING IN PRIVATE SECTOR
IFC will lead the IFC will lead the IFC will lead the IFC will lead the
development development development development
communitycommunitycommunitycommunity
• Stimulate innovation to
create new markets that
address development
challenges
• Crowd in and create
markets for disruptive
technologies to deliver on
SDGs
Enable SMEs to grow and
create jobs through Advisory
support through:
• Enabling environment
• Better access to finance
• Open access to markets
• Greater SME capacity
Work with public and private
sector clients to close
economic and social gaps
between men and women,
thereby making firms and
economies more productive,
competitive, and inclusive.
• GHG emission reduction
and resilience
• Account for climate risk
• 28% of its annual financing
by 2020
• Catalyze $13b in private
sector capital
• Enhance food security
• Enhance productivity and
efficiency
• Promote food safety
standards
• Improve market access or
increase trade / exports
• Deliver reliable access to
clean energy
• Transportation networks
• Augment water, sanitation
& treatment capacity
• Urbanization demands
Infrastructure Agribusiness Health & Education
• Improve health
outcomes
• Address the skills gap
Climate Change Gender SMEs
Financial Inclusion
• Enable the unbanked to
access financial services
• Increase access to finance
(capital)
• Leverage technology
(digital finance.
Innovation & Disruptive
Technologies
IFC 3.0 STRATEGY: SECTOR PRIORITIES
Opportunities to work for IFC
KEY OPPORTUNITIES
INVESTMENT
� Loans
� Equity
� Trade and Commodity Finance
� Syndications
� Derivative and Structured Finance
� Blended Finance
ADVICE
Innovative Solutions Combining IFC’s Expertise and Tools to:
� Help Create New Markets
� Unlock Investment Opportunities
� Strengthen Clients’ Performance and Impact
IFC ASSET MANAGEMENT
COMPANY
� Mobilizing and Managing Capital for Investment
ENGAGE UPSTREAMENGAGE UPSTREAMENGAGE UPSTREAMENGAGE UPSTREAM
to prepare the groundto prepare the groundto prepare the groundto prepare the ground(prior to identifying
potential projects or clients)
DEVELOP PROJECTSDEVELOP PROJECTSDEVELOP PROJECTSDEVELOP PROJECTS
to get investments off to get investments off to get investments off to get investments off
the groundthe groundthe groundthe ground(potential project identified)
SUPPORT FIRMSSUPPORT FIRMSSUPPORT FIRMSSUPPORT FIRMS
to become investment to become investment to become investment to become investment
ready ready ready ready (in challenging markets)
� Identify and assess market opportunities
and link with potential partners
� Identify regulatory barriers to investment,
support rapid reform that reduces risk
and improves investor confidence
� Build awareness and strengthen
management practices across industry
(ESG, financial management)
� Identify and assess feasibility of
potential projects (finance, E&S,
technical)
� Pro-actively engage public and private
stakeholders to structure project
� Support project eco-system (supply
chain, financial services,
infrastructure)
� Assess investment-readiness of
potential local clients
� Help potential and portfolio clients
clear immediate bottlenecks to
become investment-ready (financial
management, EIA, risk assessment)
� Build capacity of clients to enter new
markets
ADVISORY MANDATE
Advisory Objective & FocusClosing access gaps in energy, water, transport as well as building municipal
infrastructure to meet the demands of rapid urbaniza tion
• Assist governments with the structuring and implementation of PPP projects in infrastructure
• Advise governments and its agencies (SOEs) at federal, state or municipal levels
• Advisory on structuring, financial analysis, promotion and tend ering executed by IFC staff supplemented by external specialized consultants (le gal and engineering)
• Three main sectors:
• Energy (generation, including renewable energy, distribution, transmission)
• Transport (ports, airports, roads, urban)
• Social Sectors (health and education)
BOOST PRIVATE SECTOR PARTICIPATION IN INFRASTRUCTUR E
EXAMPLE: PPP
SAO PAOLO ROAD
PPP/BRAZIL
We completely redesigned the
concession process for Sao Paolo’s road
privatization. This brought in $2.8 billion
of new investment via two separate
auctions, with $5 billion expected in
total.
Our contractual innovations are now a
template for further Brazilian road PPPs.
The project also brought in investment
from IFC IS and risk mitigation from
MIGA.
GABON ELECTRICITY
& WATER UTILITY
Advised Gabon Government
on the privatization
of electricity & water utility
in 1997, the continent’s first
privatization of a water & electricity
utility involving full commitment for
future investments and the first full
concession in Sub-Saharan Africa. By
2014, the number of household
electricity connections increased 188%
and water connections 212%.
PATNA HOSPITAL/INDIA
In India, we advised the Government
of Bihar state on a PPP super-specialty hospital
in the capital city, Patna.
The project is expected to mobilize $45 million of private sector investment and
increase access to healthcare services for approximately 25,000 to 30,000
inpatients and 200,000 outpatients per year.
.
SCALING SOLAR
IFC brought together a suite of WBG services to create a viable markets for solar power. The “one stop shop” program rapidly made privately funded grid-connected solar projects operational at competitive tariffs. Seven leading renewables developers competed to build Zambia’s first large-scale solar plants with the lowest prices for solar power to date in Africa.
Service delivery standardized in replicable packages that is being implemented in Senegal, Madagascar and Ethiopia.
CREATING A MARKET FOR GRID-CONNECTED ROOFTOP SOLAR IN INDIA
10,000 people will benefit from increased access to power and nearly 7,000 tons of greenhouse gases will be avoided per year as a result of a 25-year concession to private providers for 2.5MW solar rooftop projects.
IFC advised on the PPP structure as well as technical aspects of the projects.
EXAMPLE: PPP
Advisory Objective & Focus
Crowding in climate-friendly private sector investm ents, and helping firms reduce GHG emissions and mitigate climate risks
Government:• Remove policy/regulatory barriers to private sector participation• Build government capacity to prepare and manage PPPs
Industry: • Conduct market assessment and mapping • Scale project development services and support sponsors to navigate the local environment• Develop climate risk tools to promote climate adaptation and reduce
Firms:• Provide project development services through technical feas ibility studies, financial bankability
assessments, project structuring, power sector and regulatory framework reviews, off-taker risk analysis, and all aspects of power purchase agreeme nts
• Use clean energy and resource efficiency tools to enhance client competitiveness• Leverage multinational companies to build more competitive, climate-friendly supply chains
BOOST PRIVATE SECTOR PARTICIPATION IN CLIMATE- RENEW ABLE ENERGY
EXAMPLE: BALKANS RENEWABLE ENERGY PROGRAM
• Addressed Regulatory gaps and supported novice developers to develop small hydro power plants and other renewable projects in the Balkans
• Provided advice on regulations to enable private investment• Compiled good practices and provided technical trainings for developers• Reviewed project concepts, technical designs and financial models of clients• Trained banks on assessing renewable energy projects• Helped clients secure financing
• The program achieved strong impact with $1.1b investment into 500 MW of renewable energy projects that generate 2000 GWh/year and avoid 1.6m tons of GHG emissions per year
• To achieve lower-carbon growth in the cement industry, IFC
advised 14 cement companies on reducing GHG
emissions by investing in energy efficiency, alternative fuels
and renewable energy, setting an example for other
companies to follow.
• To effect broader change in the sector, IFC supported Low
Carbon Roadmaps in India and Brazil and sponsored global
and country reports informing key players on business
opportunities in climate-friendly projects.
EXAMPLE: CEMENT SECTOR IN BRAZIL AND INDIA
STIMULATE INNOVATION TO CREATE NEW MARKETS
Pro
fitab
ility
MaturityProof of conceptBusiness model development
Technology/Business model
advancement
Advisory Services Investment
• Pro-competition market regulations and sector policies • Develop digital infrastructure• Business development services to innovators through accelerators/incubators with IFC investment• Match making and technology transfer program
1
• Support manufacturers of disruptive technologies offering alternative way of meeting sector goals. • Principles for advisory support to promote uptake of a technology: (i) offers better & more cost-effective
solution to user; (ii) increases reach and access to services; and (iii) is evaluated to be commercially viable in the medium-term
Health & Education
Logistics
Quality Assurance
Market Intelligence
Business Support
Consumer Education
Catalyzing Venture
Financing
Catalyzing mainstream Investment
with FIs
Support conducive environment
2
Create conducive environment & ecosystem for innova tion
Promote the uptake of technological innovations Digital finance
Power
COLLABORATION OPPORTUNITIES
Examples:• Assessing market capacity• Market barriers for new technologies or business models• Assessing regulatory frameworks
1
Examples:
• Support the development of regulations for scale up
• Demand studies
• Grid integration and grid connection studies for Renewable Energy(Tunisia)• Market price forecast• Definition of technical standards
2
Market assessments
Sector / Systems improvements
Examples:
• Pre-feasibility/feasibility studies
• Preliminary designs
• Cost estimation (investment, O&M, mantenimiento mayor,…)
• Pre-qualification criteria
• Quality standars
• Environmental and social impact studies
3 Client/transaction support
CONTACT INFORMATION
Milagros Rivas SaizGlobal Head, Advisory Services T: +1 202 473 8750Email: Mrivassaiz@ifc.org2121 Pennsylvania Ave. NWWashington, DC 20433 USA
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