1. SUSTAINABLE VALUE CHAINFINANCE

2. IFC over $100 Billion Invested inEmerging Markets since 1956 Largest multilateral source of loan/equityfinancing for the emerging markets private IFC FY10 Highlightssector Portfolio *$48.8 billion Founded in 1956 with 182 member countriesCommitted *$18.0 billion Mobilized$ 5.3 billion AAA rated by S&P and Moodys # of companies 1776 Provides financing (equity, quasi-equity,# of countries (portfolio) 129loans, risk management and local currency# of countries (committed) 104products) and advisory services* Includes for IFCs own account and mobilization Takes market risk with no sovereignAdvisory Services $300 mguaranteesComposition of FY10 Transaction Volume Promoter of environmental, social, andSub-Saharan Middle East & AfricaGlobalcorporate governance standards N.Africa19%1% 12%South Asia Resources and know-how of a global8%development bank + flexibility of a merchantEurope &bank Central Asia23% Holds equity in over 800 companies worldwide Latin East Asia andAmericathe Pacific24%12% 2 3. IFCs Global ReachIFC has reach in 100+ country and regional advisory services offices worldwideDrawing on our experience and lessons-learned, we share sector best practices to the benefit of ourclientsDakarNairobi3 4. Our BeliefsPrivate sector solutions for sustainability and inclusive developmentWATER:ENERGY: Low carbonTRANSPORTATION:Capture, treatment, conservation AIR & ENVIRONMENT: Emission generation, energyVehicles, systems, fuels and, wastewater treatment, watercontrol, trading and offsetsefficiency, storage, smart grids.logistics efficiency, access to waterBUILDINGS: Low carbonMANUFACTURING: Green chemicals, AGRICULTURE & FORESTRY:RECYCLING & WASTE: Recycling strategy, energy RE/EE supply chain, cleaner Sustainable Value Chains, EST and waste treatment services,efficiency, sustainable materials.production.standards, Land mgmt, low resource efficiencycarbon and adaptation strategies, biomassCan only scale and have impact if significant private sector participation is achieved 5. Sustainable Value Chains: Current Reality1. Increasing recognition of the risks and opportunities value chain sustainability practices represent to lead companies2. Increasing recognition of the role lead companies can play in international development3. Increasing recognition of the business case for sustainability; many investment opportunities pay for themselves in 2-3 years from savings4. Many companies are making public statements of commitment to this effect but are struggling to make tangible progress5. Considerable challenges to sustainability upgrades limited awareness, access to technology, implementation capacity and lack of long term financing key obstacles IFC is trying to address 6. Sustainability Value Chain Finance: IFC Approach 7. Sustainable Global Value Chains: A Collaboration 1. Value Chain Lead Company Role: Engages firms in its value chains Provides incentives to supply chain partners Price incentives/financing Stronger contracts Preferred supplier status other Benefits: Reduced operational risk Reduced regulatory risk Reduced green-house gas emissions associated with company Improved reputation and public relations Brand differentiation Better relationship with suppliers and distributors 8. Sustainable Global Value Chains: A Collaboration 2. Producers & Distributors in the Value Chain Role: Implement sustainability upgrade Benefits: Improved profitability & competitiveness Meet lead company requirements Improved reputation Reduced regulatory risk 9. Sustainable Global Value Chains: A Collaboration3. Financial Intermediary Role: Offers sustainability finance solutions to suppliers and distributors in lead companys value chain Benefits: Offering new product to address needs of blue chip clients Reduced risk of large clients Pipeline development and new business opportunity Differentiation from competitors Reduced greenhouse gas impact of portfolio 10. Sustainable Global Value Chains: A Collaboration 4. IFC Role: Provide financial support to address financing gaps (credit lines, risk sharing, portfolio guarantees, etc.) for value chain sustainability upgrades Capacity building for value chain producers and distributors in various areas of sustainability upgrades Benefits: Scaling up sustainability finance in order to meet climate change and poverty reduction objectives 11. Annexes : Examples 12. Examples Food retailer or food brand company concerned about theenvironmental and social practices of its suppliers and sub-suppliers, aconsiderable reputational and operational risk, wants to improvevisibility and encourage the improvement of environmental and socialpractices (including energy efficiency, renewable energy, waterconservation, etc) in its entire value chain, including at the level offarmers, processors, manufacturers and logistics providers in its valuechain Large electronics company is kept responsible by the public forgreenhouse gas emissions in its entire value chain, even though itdoes not own most of the companies involved. Therefore it decides toencourage value chain companies to implement greenhouse gasemissions reducing investments, such as energy and resourceefficiency measures. 13. Examples (contd) Paper brand is worried about the source of its pulp, in particular thereputational issues related to the deforestation of old growth forests.Therefore it decides to move towards the use of certified wood whichrequires its suppliers to make investments in sustainability measuresand certification. Chain restaurant wants to improve its image and promote greenconstruction retrofits of its franchisees and make its supply chainmore sustainable. Consumer goods brand is considering reaching remote areas withits products and developing a distribution network, but wants to do itin a responsible way.