report on advisory services operations in the middle east...

Report on Advisory ServicesOperations in the Middle East and North AfricaREPORTING PERIOD JULY 2011 – JUNE 2012

IFC Advisory Services in the Middle East and North Africa is supported by the Canadian International Development Agency, the European Commission, Harakat, International Bank for Reconstruction and Development, Islamic Development Bank, Switzerland’s State Sec-retariat for Economic Affairs, UKaid, USAID, and the governments of Denmark, Japan, Luxembourg, Netherlands, and Spain.

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ContentsList of Abbreviations ....................................................................................................... 5

Overview of Fiscal Year 2012 .......................................................................................... 6

I.Introduction ...........................................................................................................6

II.Key Development Results ...................................................................................6

III.Geographical Coverage .....................................................................................7

IV.Expenditure ........................................................................................................9

V.Partnerships ........................................................................................................9

VI.Going Forward – Continuing to Respond to Challenges in MENA ...................9

Responding to Thematic Challenges ............................................................................11

I .Introduction .......................................................................................................11

II. Fostering MSME Development to Accelerate Economic Growth and Job Creation ...........................................................................................................11

III.Reducing Resource Intensity and Supporting Green Growth .......................13

IV. Fostering Economic Inclusion .........................................................................15

V.Creating Private Sector Investment Opportunities in Agribusiness ................18

Investment Climate ........................................................................................................ 21

I.Operational Context ...........................................................................................21

II.Purpose and Approach .....................................................................................21

III.FY12 Results ................................................................................................... 22

IV.Program Highlights .......................................................................................... 23

V.Challenges and Lessons Learned ................................................................... 25

VI.Future Prospects ............................................................................................. 26

Access to Finance .......................................................................................................... 27

I.Operational Context .......................................................................................... 27

II.Purpose and Approach .................................................................................... 27

III.FY12 Results ................................................................................................... 27

IV.Program Highlights .......................................................................................... 29

V.Challenges and Lessons Learned ................................................................... 33

VI.Future Prospects ............................................................................................. 33

Sustainable Business Advisory ..................................................................................... 34



III.FY12 Results …………………………………………………..………........………..34

IV.Program Highlights ...........................................................................................36

V.Challenges and Lessons Learned …………………………………………….…...41

VI.Future Prospects……..…………………………………………...……...…………..42

Public-Private Partnerships .......................................................................................... 43



III.FY12 Results ………………………………………..………........…………………..44

IV.Program Highlights ...........................................................................................45

V.Challenges and lesson Learned ……………………………………………….…...47

VI.Future Prospects………………..………………………………...……...…………..47

Sources and Uses of Funding ........................................................................................ 48

I.FY12 Expenditure ............................................................................................. 48

II.Sources of Funding .......................................................................................... 49

III.Client and Partnership Overview …………………………..………........………..50

Annexes ........................................................................................................................... 55

Annex A: Indicator Definitions and Methodology Notes .................................... 55

Annex B: Fiscal Year 2012 Results and Targets ................................................ 63

Annex C: Targets: Fiscal Years 2011-2017 ........................................................ 67

List of AbbreviationsA2F Access to FinanceABA Alexandria Business AssociationACRI Arab Credit Reporting InitiativeADR Alternative Dispute ResolutionAFFI Arab Financing Facility for InfrastructureAMB Al Amal Microfinance BankAMF Arab Monetary FundAS Advisory ServicesBoP Bank of PalestineBLC Bank Lebanon CommercialBLF Banque Liban FrancaiseCIDA Canadian International Development AgencyCG Corporate GovernmentCEO Chief Executive OfficerCGAP Consultative Group to Assist the Poor DFID Department for International Development (UKaid)DBACD Dakahlya Businessmen Association for Community DevelopmentDAB Da Afghanistan Banke4e e4e Initiative for Arab YouthFY Fiscal YearHBL Habib Bank LimitedGHG Green House GasGIZ Gesellschaft Fur Internationale ZusammenarbeitIBRD International Bank for Reconstruction and DevelopmentIC Investment ClimateICT Information and Communication Technology IDA International Development AssociationIDRC International Development Research CentreIFI International Finance InstitutionLGBC Lebanon Green Building CouncilMENA Middle East and North Africa MFI Microfinance InstitutionMSME Micro, Small, and Medium EnterprisesMISFA Microfinance Investment Support Facility for AfghanistanNPL Non-Performing LoanOECD Organization for Economic Cooperation and DevelopmentPPIAF Public-Private Infrastructure Assistance FacilityPPP Public-Private PartnershipPICG Pakistan Institute for Corporate Governance SBA Sustainable Business AdvisorySECO State Secretariat for Economic AffairsSEF Sustainable Energy Finance SME Small and Medium EnterprisesUNEP United Nation Environments ProgramUAB Union Arab BankUSAID United States Agency for International DevelopmentWBI World Bank Institute

REPORT ON ADVISORY SERVICES OPERATIONS IN THE MIDDLE EAST AND NORTH AFRICA6

Overview of Fiscal Year 2012I. Introduction

Our challenge in the Middle East and North Africa (MENA) this year has been to effectively respond to the widespread changes in the region. We have focused on engaging clients and partners to help rebuild our portfolio in line with MENA’s evolving demands. At the beginning of the year, over 40 percent of our portfolio was suspended due to instability in various countries. Projects in Yemen and Syria had to be closed, while others in Egypt had to be re-designed or delayed until stability was re-established. At the same time, we were challenged to deliver in markets like Tunisia, where we had not operated for several years.

Despite the hurdles, the 2012 fiscal year proved to be a success. At the end of the 12-month period ending in July, we had 27 new projects approved, and another five in the late stages of the approval process. We ramped up activities across the region, particularly in the areas of investment climate, access to finance, and corporate governance. Those efforts are reflected in the growth in program expenditures, which increased 22 percent this year. A prime example of that expansion is in Tunisia, where we now have four active engagements, up from none. We have focused on microfinance, corporate governance, investment climate reform, small and medium enterprise (SME) banking, and training to strengthen youth employability. In our efforts to respond to challenges across the region, we will continue to ramp up our program this fiscal year, and expect another year of rapid portfolio growth.

II. Key Development Results

Despite the significant challenges as we began the year, the program has largely delivered on our targets, as can be seen from the table opposite. We had a very strong performance in our SME banking as we continue to rapidly increase that portfolio. Demand from banks continues to build as they seek to diversify their portfolios and access new markets. Our microfinance targets undershot as we moved to get more projects into execution, after the delays suffered due to regional turmoil. While our main focus in investment climate this year was to re-build the portfolio, we continued to see strong performances in our Alternative Dispute Resolution (ADR) program, as well as some early results in regulatory reform in Afghanistan. These helped us to exceed our target for private sector savings.

Our work in the Sustainable Business Advisory business line continued to show strong results. Our programs in SME training, corporate governance, energy efficiency, and supply chain development all helped firms improve their productivity, reduce costs, and increase transparency. This helped us exceed our targets for this business line, despite working primarily in International Development Association (IDA) and conflict-affected states. Finally, our Public-Private Partnership (PPP) program, despite exceedingly difficult market conditions, helped deliver two transactions: one involving two hospitals in Alexandria, Egypt and the other involving an airport in Medina, Saudi Arabia. That allowed us to exceed our yearly target, and put us on track to meet expected program targets through 2014.

7OVERVIEW OF FISCAL YEAR 2012

Business Line

Indicator Targets ResultsRatio of achievement

Access to Finance

Value of SME loans disbursed ($)

164,477,720 430,343,109 262%

Value of micro loans disbursed ($)

558,948,960 241,882,593 43%

Investment Climate

Estimated value of aggregate private sector savings ($) from recommended changes

21,750,949 56,699,431 261%

Sustainable Business Advisory

Number of entities reporting improved performance

533 812 152%

Public-Private Partnerships

Value of financing facilitated ($)

190,800,000 1,525,000,000 800%

III. Geographical Coverage

As discussed in last year’s report, our portfolio was expected to shift from one heavily weighted towards IDA and conflict-affected countries toward a portfolio with a better balance across the region. That will include a pivot toward middle-income countries in North Africa and the Levant.

As can be seen in the tables opposite, our commitment to IDA and conflict-affected countries has remained strong, and they continue to form a large part of our portfolio. Despite the difficulties inherent in these countries, we have launched a wide range of projects in Iraq, Pakistan, and the West Bank and Gaza. We expect to continue to build on this portfolio, especially in Pakistan, where we have now built strong relationships with several provincial governments. We are also exploring areas where we can do more in Yemen and Afghanistan, while we focus on implementation in Iraq.

At the same time, we have been very active in North Africa and the Levant, significantly increasing our portfolio in Jordan, Lebanon, Egypt, Morocco, and Tunisia. We expect this trend to continue, particularly in Access to Finance, where we expect more projects in SME banking and housing finance, and in climate change mitigation, where our clean energy program is likely to expand into Egypt, Jordan, Morocco, and Pakistan.


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9OVERVIEW OF FISCAL YEAR 2012

IV. Expenditure

As expected, given the growth in our activities, the size of our Advisory Services (AS) program in MENA this year grew by 22 percent in expenditure terms. Growth was particularly strong in the Access to Finance and Investment Climate business lines as they sought to ramp up and re-build their portfolios. The Public-Private Partnership (PPP) business line recorded fewer transactions than last year due to disruptions caused by multiple governmental changes. We spent a significant amount of time on business development and engaging with new governments, which we hope will translate into a growing portfolio in the next fiscal year. Lastly, the Sustainable Business Advisory business line maintained the same level of expenditure as in FY11 and did not meet expected growth. This was mainly due to delays in project launches in Iraq and in the clean energy program, since many clients chose to delay investment decisions due to events in the region. Overall, however, this was a strong year, and the acceleration of the program in the last two quarters bodes well for our continued expansion in FY13.

V. Partnerships

We continued to build on the strong partnership base that is essential for our operations. We enjoyed con-tinued support from several long-term partners and engaged in new partnerships with other donor orga-nizations. We signed six new agreements this year with UKAID, SECO, USAID, and Japan to extend their support for Advisory Services programs in MENA. We also signed new agreements with Denmark and the European Union. Overall, we signed agreements to-taling $14.3 million this year while leveraging an addi-tional $3.9 million from centrally-managed trust funds, all targeted at countries in North Africa and the Levant. This is a step in the right direction for the MENA pro-gram and covers a significant portion of the financing gap that we have been facing. In addition, we have been involved in ongoing discussions with a number of donors, which we expect to lead to further signings early in the new fiscal year.

In addition to signing agreements, we continued to work on improving our monitoring and evaluation system, and increasing our ability to track and report

on program results. We also developed reporting templates and detailed plans for program evaluation, which we will share at our partnership meeting in September. We hope this will allow us to continue to build robust partnerships, focused on achieving strong, positive results on the ground.

VI. Going Forward – Continuing to Respond to Challenges in MENA

While we responded well to the challenges in MENA this year, we still have much to do. FY12 was about building the foundation for the MENA program: we refined products, hired specialized staff, carried out scoping, and secured financing. While we made good progress in these areas, we need to do more scoping and pilot new approaches in mobile banking, housing finance, and our e4e Initiative for Arab Youth. There are also other parts of our program, including projects in Afghanistan and Pakistan, where we are continuing to secure funding.

“DFID has been a long-term supporter of

IFC’s work in the Middle East and North

Africa. At this historic time in the region, we

have expanded our collaboration with IFC

to help address some of the most pressing

economic challenges. This includes support

through the UK’s Arab Partnership to IFC’s

new e4e Initiative for Arab Youth and the

Micro, Small, and Medium Enterprise Financ-

ing Facility. These programs will stimulate

enterprise growth and job creation - helping

to brighten the prospects of hundreds of

thousands of people.”

Lindy Cameron, Deputy Director, Middle East and North Africa Department, UKaid.


The majority of our work over the next few years will be focused on implementation. This is a dynamic process for any program and we will be heavily engaged in monitoring progress, learning lessons from our experience, and adapting to ensure the highest level of impact.

We are also increasing our emphasis on integration, moving toward a more thematic focus in areas such as agribusiness, inclusion, green growth, and micro, small, and medium enterprises (MSMEs). We are increasingly integrating products from multiple business lines, and combining both advisory and investment services. This new way of working with our clients provides a more holistic viewpoint and helps us maximize the value that IFC can offer. For example, while working with a bank to design SME loan products, we also discuss the importance of non-financial services for SME customers. The latter includes management training, instruction in corporate governance, and the provision of easy-to-use business planning programs.

The following section includes more information about this approach. The feedback from clients has been overwhelmingly positive, but we are still at the beginning of this journey. We expect to do much more in this area, with an increased array of products.

11RESPONDING TO THEMATIC CHALLENGES

I. Introduction

We are moving increasingly toward a thematic approach to responding development challenges. This does not mean that we are changing our business line structure. But we are increasingly seeking to integrate various products when tackling certain thematic issues. What follows are four thematic areas that correspond to large development challenges in MENA and how IFC is addressing the issues. We expect to continue to experiment in these thematic areas over the next few years and report back on the lessons learned.

II. Fostering MSME Development to Accelerate Economic Growth and Job Creation

Why It Matters

The Arab Spring began with an act of desperation by one young Tunisian entrepreneur. There are at least 85 million others like him throughout the Arab World. At the same time, 33 percent of the region’s population is under 15, meaning governments already struggling to address the needs of youth will face more pressure in the future. As these countries look for solutions, they are turning increasingly to MSME development as a tried-and-tested strategy for boosting job creation, and creating equitable growth.

Their attention is well placed. MSMEs are an important part of economies throughout the Arab World, accounting for up to 40 percent of employment in some countries. However, this is well below employment rates in other regions. A recent study of 99 developing countries found that MSMEs account for an average of 68 percent of employment. The same study also found that MSMEs generate for 86 percent of new jobs in these economies. Clearly then, the potential for MSMEs to kick-start economic growth and foster hope in young people is huge. However, as the gap in job creation with other developing regions shows, there are very high barriers in MENA that are not allowing that potential to be realized.

These barriers include excessive red tape, poorly conceived regulations, equally poor implementation, a severe lack of access to finance, and weak business development support services. Unlocking the potential of MSMEs, through smart policies, efficient regulations, and increased capacity building, is a key goal of IFC and its partners in MENA. This effort hinges especially on the robust partnership between IFC and the World Bank, which brings a depth and breadth of knowledge to the policy landscape in MENA countries.

IFC Services and Approach

IFC and its partners have developed a series of products that help address barriers to MSME growth. These are laid out below. However, we are still in the early stages of understanding how we can best combine these products to provide a holistic and integrated strategy to support MSMEs in MENA. This is a significant part of our current work program.

Responding to Thematic Challenges


Encouraging smart policies and efficient regulations for MSMEs: IFC and the World Bank work with governments throughout the region to identify barriers to MSME development and improve the business environment for these enterprises. This includes the IFC/World Bank flagship Doing Business program, as well as other programs aimed at creating an enabling environment for investments, and streamlining regulation for easier business registration and licensing. Improving access to finance for MSMEs: IFC works with financial service providers to help them establish dedicated MSME units, and develop innovative products to reach a larger segment of the population. We also work with governments to improve financial infrastructure (such as credit bureaus and moveable asset registries) to foster lending to MSMEs. Finally, IFC is helping to reform insolvency frameworks, and set up alternative debt resolution programs. This helps MSMEs in debt and aids creditors in recovering the assets of firms that are truly insolvent. This also provides the possibility for efficient debt workouts for viable firms.

Strengthening the capacity of MSMEs: Through its flagship Business Edge program, IFC offers MSMEs training in business planning, sales, and human resources. The training is delivered by local providers. We also work with strong, well-placed partners to provide easy-to-use tools that help MSMEs move toward more transparent accounting and better business planning. Among those is the SME Toolkit, a web-based platform that provides information and business tips, among other things. Finally, IFC, through its Corporate Governance program, has developed training initiatives that help midsize enterprises understand the importance of good corporate governance, carry out a corporate governance diagnostic and develop an improvement plan. Increasingly, firms are beginning to understand the importance of corporate governance, especially in how it affects their ability to access capital.

Improving access to markets: IFC helps MSMEs gain better access to markets, both directly and indirectly. We assist MSMEs directly to adopt environmental, social and trade standards. This helps MSMEs gain access either directly to international markets, or to the supply chains of larger firms. Indirectly, our PPP and trade logistics work helps MSMEs access new markets by providing new or improved infrastructure. It can also give them access to improved logistic networks and services (trade logistics). These efforts help lower production and transport costs, thus making market entry more attractive and viable for smaller producers.

New approaches: In the last few years, we have been experimenting with different ways to combine these products to increase impact. Examples include:

In our olive oil project in the West Bank, IFC helped oil-producing SMEs apply international standards to improve productivity, quality, food safety and traceability. We also supported access to international markets, and worked closely with the United Nations Environment Program (UNEP) Regional Activity Centre for Cleaner Production to find solutions to improve the sector’s sustainability. IFC also brought in Business Edge trainers to help the SMEs improve their financial management. This year, three firms created a joint brand, marketing their high quality oil at a gourmet food fair in the United States. Through this initiative, they were able to sign new supply contracts with US firms, and also field inquiries from marketers in Australia.


In Pakistan, we helped one of our clients, Habib Bank, restructure and scale up its SME banking business. This involved designing and implementing a new business model, re-engineering its credit underwriting process, and developing risk assessment tools to ensurethe bank handled this new asset class in a sustainable manner. In addition, the engagement involved training new sales and credit officers, and developing new financing products for SMEs. IFC is also helping Habib Bank provide business advisory and training services to the SMEs themselves by linking them to IFC Business Edge training partners in Pakistan. The bank is being equipped to provide a unique combination of financial and nonfinancial services to support SMEs in Pakistan.

III. Reducing Resource Intensity and Supporting Green Growth

Why It Matters

Economic growth, climate change and demographic drivers are expected to exacerbate the current resource intensity problem in MENA. The total water withdrawn from renewable sources amounts to around 800 cubic meters per capita, the third highest after North America and Australia, and well above the natural regeneration rates in all MENA countries. Energy intensity (the ratio of energy used to GDP) is some 60 percent higher than that of OECD countries, and 40 percent higher than the world average, making the region the second most energy intensive globally. In terms of greenhouse gases (GHG), it is estimated that meeting MENA’s increased demand for energy will make the region the second biggest contributor to the increase in GHG emissions by 2020.


IFC Advisory Services has increased its efforts across the region to mitigate climate change. We help the private sector reduce resource intensity and increase growth, with the lowest possible carbon emissions. More specifically, we assist resource- intensive private sector companies to identify, and implement energy- and water-


efficient practices and technologies. We also help develop voluntary codes for green buildings, promote sustainable energy finance, and support the uptake of renewable energy technologies to generate clean power.

Resource efficiency: IFC is supporting the private sector across the region, with cleaner production assessments to identify and implement resource-efficient practices and technologies. We work with individual firms and groups of firms to achieve this. Examples of resource efficiency projects include supporting a pulp and paper company to reduce operating costs by $1.5 million annually by reducing its annual energy consumption by roughly 6,000 MWh, and water use by 117,000 cubic metres. This is equivalent to avoiding 21,000 tons CO2 emissions annually.

Green buildings: IFC is supporting NGOs and governmental institutions as they develop codes and regulations that promote, or enforce, energy efficiency in the building sector. This is particularly relevant in MENA since a high proportion of GHG emissions come from buildings. With this in mind, IFC implemented a project with the Lebanon Green Building Council (LGBC) to develop the ARZ (Cedar in Arabic) rating to improve efficiency in existing commercial buildings. Once widely adopted, the ARZ rating system will go a long way toward helping the building sector, a major source of carbon emissions in the country, reduce emissions, and save building owners considerable money.

Sustainable energy finance: IFC encourages financial institutions to develop and launch solutions to increase the use of energy-efficient equipment, promote clean technology, and introduce renewable solutions across the region. IFC is currently assisting financial institutions in Jordan, Lebanon and Tunisia with a combination of advisory services and credit lines to promote the use of clean technologies. As a result of IFC’s sustainability credit line, and Sustainable Energy Finance (SEF) advisory work, one microfinance institution (MFI) in Jordan has seen the number and value of solar power loans triple in just nine months.

Renewable energy: IFC is embarking on a comprehensive program focused on promoting private sector investments in clean energy technologies. The program


seeks to develop renewable energy solutions in resource-intensive industries, off-grid power for productive use in rural areas, and distributed power to meet peak load demand. For example, IFC is engaging with industrial estates, electricity distribution companies, and energy-intensive private sector companies in Pakistan to utilize biomass and solar for the self-generation of electric and thermal energy. It is also helping the private sector access the small-scale hydropower market. To further encourage private sector investments in clean energy, IFC is working with regulatory bodies to streamline existing regulations, and develop simplified new codes for licensing, and access to land, resources, and power infrastructure.

New approaches: In the green growth/climate change space, we are already combining a number of products to help our clients. In addition to this, we are also piloting two further approaches to see how we can continue to increase our impact.

Combining energy efficiency and clean energy engagements: Rising energy prices and power outages resulting from an increasing supply gap, constitute a major constraint to growth and investment in the region. We are, therefore, seeing a growing interest in captive power from our clients. Increasingly, we help these clients first examine ways in which they can reduce consumption by using more efficient equipment with emphasis on solutions which can be implemented very quickly and has a very short re-payment period. We then support these clients to identify, and invest in, suitable technologies for captive power generation, based on renewable energy sources, such as biomass, biogas and solar power. This combined approach helps our clients lower their energy bills, while at the same time optimizing and converting their capital investment into green technologies.

Moving energy efficiency up-stream: While we have had some success in dealing with individual companies through cleaner production audits (and these are important to show real benefits), we understand that this activity is unlikely to lead to market transformation, due to limited replication among individual, or groups of, firms. As a result, we are now exploring engagements with market aggregators, such as electricity distribution companies and industrial parks, to help them advance energy-efficient solutions for their customers. This approach will seek to identify replicable technological solutions that can be offered to a large number of customers (particularly in energy-intensive industries), and will be combined with financing programs from financial institutions (using our sustainable finance product). By leveraging the outreach and organizational strengths of the market aggregators, we hope to help lead market transformation for important sectors of some economies.

IV. Fostering Economic Inclusion

Why it Matters

The calls for social justice at the center of the Arab Spring were fueled by a reality in which large sections of the population were often both disenfranchised and economically alienated. Private sector elites often enjoyed privileged access to approvals, land, markets, contracts, finance and tax incentives, which enabled some investment and growth. These privileges did not extend to the vast majority, who


faced substantial obstacles. The result was a growth pattern that was concentrated, less dynamic, less productive, and ultimately created fewer jobs, than more competitive, inclusive markets.

Excluded communities include the micro, SME and informal sector, women, youth, and enterprises outside the main economic centers. Many are economically engaged, but in very small or informal activity. A survey conducted by IDRC across 13 MENA countries indicates that around 26 million adults participate in some form of entrepreneurial activity. That includes nearly 6 million in Egypt, the vast majority of whom are involved with enterprises with less than five employees. The exclusion of youth is common. Egypt’s youth unemployment currently stands at about 25 percent, while Tunisia’s stood at 30 percent before the revolution, and has now reached 42 percent. Finally, women are excluded. Young educated women face unemployment rates above 40 percent, and MENA has the lowest female labor force participation in the world.


IFC Advisory Services seeks to remove obstacles to the effective integration and participation of the target communities into a more broad-based, inclusive private sector. IFC will focus its efforts on the sub-national level of government where many MSMEs register, on social enterprises that may reach poor communities, and on specific programs tailored to the needs of women and youth.

Inclusive business and social entrepreneurship: In Egypt, in response to dialogue with the private sector, civil society, and social investors, IFC has recognized the need to address the role of social enterprises. Such enterprises seek to have a positive social impact, while being sustainable in private sector development. IFC is now developing a project to improve the investment climate for social entrepreneurs in Egypt by identifying and developing the most appropriate legal form to maximize efficiency and advocating for the adoption of this new legal form by the government. We are also creating a network for social enterprises to raise awareness and


advocate for their needs. In addition, IFC, jointly with the World Bank and other partners, is assisting in a pilot project to financially and technically support social enterprises and inclusive businesses focusing on agriculture supply chains, through the Development Marketplace competition in Egypt this year.

Sub-national Doing Business: In Egypt, IFC is working to address geographical inclusion through the launch of a baseline Sub-national Doing Business assessment, covering 15 cities representing port cities and urban centers around the country. Five indicators will be measured: starting a business, dealing with construction permits, registering property, enforcing contracts, and trading across borders. The project, working with the Ministry for Local Government, seeks to generate information on service standards, and help the private sector to initiate reform dialogues with local governments. It also pushes for the improved application of regulations and service delivery outside the capital.

Women in business: IFC is seeking to broaden economic opportunities for women, whether they be entrepreneurs, executives or employees, with expected benefits for them and their families, as well as the economy at large. More specifically, IFC is working on expanding women’s access to finance, business and management skills training, and removing barriers they may encounter in ascending to corporate boards. The latter has the added benefit of greater board effectiveness and firm performance. To this end, IFC has pioneered several projects. In Lebanon, we partnered with BLC Bank to launch the “Women Empowerment Initiative,” which aims to deliver a suite of financial products and services targeting women entrepreneurs. IFC also assisted BLC in conducting market research to better understand the needs of SMEs, in particular women-owned SMEs. Bank staff were trained on sales strategies to grow and develop a specific product bundle and value proposition for the women-owned SMEs, which could include training. We are now working with BLC to expand their non-financial services to women-owned SMEs through the use of an SME Toolkit, which will help these firms access tools, information and products that meet their business needs.

In Afghanistan, Pakistan, and Yemen, IFC has sought to increase the number and share of women offered management and business training by local partners. A variety of operational strategies were tested to enhance outreach. Existing IFC-accredited training providers were shown how to improve their training delivery skills and how to better stimulate demand for training among women. Partnerships were developed with new training providers with a specific interest in serving women. New partnerships were formed with chambers of commerce, NGOs, and associations catering specifically to women. Finally, focused efforts to reach out female-dominated sectors were made. Last but not least, as an integral part of IFC’s efforts to improve corporate governance practices in the Jordanian and Pakistani markets, activities to increase gender diversity in the boardroom for improved board effectiveness were implemented. These included awareness-raising on the business case for diversified boards, and the training of existing, and potential, female directors.

e4e Initiative for Arab Youth: This was launched in collaboration with the Islamic Development Bank to increase the employability of youth, including young women, initially focusing on Egypt, Jordan, Morocco and Tunisia. Region-wide and in-depth


country diagnostic assessments have either been undertaken, or are in progress, to review the role of the private sector in education, and identify specific actions to increase youth employment. In Jordan, IFC has identified the need to develop a sustainable and coordinated approach to providing the ICT industry with a skilled, competent labor force. The aim is to encourage growth through industry-led standards and government-supported quality assurance, as well as enhance the employability of ICT university and college graduates, and those already in the ICT workforce who require continuous professional development. Initiatives are also being developed in Tunisia, Morocco, and Egypt to address key employment-generating sectors.

V. Creating Private Sector Investment Opportunities in Agribusiness

Why It Matters

The MENA region, given its geography and severe water issues, is heavily dependent on food imports to meet its needs. In many of these countries, the agricultural sector is characterized by low productivity, inefficiency, and high levels of subsidies. It faces significant challenges, including the limited capacity of stakeholders, lack of conformity to international food standards, low efficiency of water use, and poorly functioning and inefficient supply chains. All these lead to a significant decrease in both productivity and the quality of agriculture products.


IFC Advisory Services is increasing its efforts across the agribusiness value chain. Projects implemented range from training farmers to improve productivity, to implementing public-private partnerships for the development of modern grain storage facilities. This covers all aspects of the food value chain, from farmers to end consumers. With a focus on IDA and conflict-affected countries, IFC has been providing advice to public and private stakeholders on introducing best practices to ensure the sustainability of greater private sector participation in agribusiness.


Improving agricultural infrastructure through PPPs: IFC is advising the governments of Punjab and Sindh provinces in Pakistan to introduce modern bulk storage facilities under a public-private partnership model. The introduction of such a system through these two pilot projects will add about 600,000 metric tons of additional storage capacity, and result in significant cost savings for these provincial governments, due to a reduction in grain storage and handling losses. The projects will also be an important step toward modernizing the country’s grain storage infrastructure, allowing the storage of grain in a safe and secure environment. If successful, these projects are expected to be replicated across Pakistan, and will result in significant private sector participation in the country’s agribusiness industry. The implementation of these two pilot projects is expected to help more than 60,000 farmers and 6 million consumers.

Access to markets through environmental, social and technical standards, and farmer and SME training: In the West Bank, IFC has been working with a group of olive oil bottling companies to increase their exports by establishing compliance with industry best practices, implementing food safety and traceability standards, and improving environmental practices. Three hundred and sixty farmers were trained on traceability practices, and the companies were able to access high-end markets through a unified brand, “Daskara.” This was officially launched at a global food exhibition in Washington DC in June 2012, resulting in an initial export contract of $184,000. We also brought in Business Edge trainers to help the SMEs improve their financial management, and find solutions to new financing needs resulting from export growth.

In Kandahar, Afghanistan, the Sustainable Business Advisory business line is reaching out to 1,500 raisin and pomegranate farmers through 40 extension workers, helping them adopt improved technology and best practices in post-harvest treatment, and facilitating access to markets in India. As a result, farmers were able to achieve a 50 percent increase in their farm gate selling price. Raisin productivity increased by 200 percent due to the adoption of new practices. And export contracts with a value of $782,500 were signed with Indian importers.

New Approaches: As in other areas, we are increasingly drawing on several products to bring more value to clients. In the agricultural space, this has taken several formats. The following are a few examples of projects under development that seek to apply this principle.

Farmer Training with a Resource Efficiency Twist: A number of current IFC projects are working on ways in which to help farmers improve productivity by implementing enhanced environmental, social and technical standards, boost resource efficiency, and take advantage of renewable energy opportunities. For example, scoping is underway for a project in Pakistan’s dairy sector which could combine improved practices to increase productivity, meet food safety standards, optimize use of fodder and water, and use renewable energy to help power the vital cooling capacity, all of which should boost farmer incomes. At the same time, we are also bringing together some of the country’s major dairy processors and banks with our investment services to establish a risk sharing facility to provide farmers with medium-term financing. This will help small farmers access financing for growth.


Improving Outreach of SME Banking to the Agricultural Sector: In Pakistan (the largest agricultural producer in the region) we have been working with financial institutions to improve their SME banking operations, including targeted non-financial services for MSMEs. We are in discussion with several banks to help them extend this work to SMEs in rural areas and the agricultural sector. We expect to conduct one or two pilots in this area in FY13, and we will scale up our Agri SME portfolio if results are promising.

21INVESTMENT CLIMATE

I. Operational Context

The political grievances at the heart of the Arab Spring, rooted in economic disenfranchisement, led to the improbable overthrow of four long-standing regimes, and the introduction of constitutional reforms in others. But the revolutions have been costly. International reserves, investment flows, and fiscal balances have deteriorated. Libyan unrest sent Egyptians and Tunisians back home, adding to unemployment. While the political process played out, little was done to address long-standing issues of youth unemployment; at 30 percent in Tunisia before the revolution, for example, and now standing at 42 percent.1

The private sector holds the key to employment, fiscal revenue, exports, and investments to rebuild reserves. But the private sector cannot play these roles while being hampered by an investment climate that remains rooted in a culture of administrative control, inconsistent implementation of laws, corruption, and the disproportionate economic influence of privileged groups. They cannot move into the formal sector if the right to operate depends on an uncoordinated maze of licenses, authorizations, and inspections. They will not undertake risky ventures if failure could result in a criminal conviction. They will not hire new graduates if their skills are irrelevant. They will be unable to compete in export markets if inefficient trade logistics increase costs and cut margins.

As a result of this climate, the rate of new firm formation in MENA is lower, the exit of inefficient businesses is slower, and more costly, interregional trade is far lower, and educational outcomes relative to spending are worse, than in Asia, Latin America or Eastern Europe2. Newly elected governments in MENA now have the mandate to address these problems urgently. We are facing a window of opportunity to move the agenda forward.

II. Purpose and Approach

The Investment Climate business line works with reformers in MENA to create an investment climate that enables a more competitive and more inclusive private sector. We work with counterparts to:

• Support dialogue that contributes to bridging the trust gap between the private sector, civil society and government, and realize a shared vision for reform;

• Introduce modern, streamlined and risk-based systems that are more efficient and effective in increasing compliance;

• Create a better risk environment for the private sector through more efficient commercial dispute resolution and modernized bankruptcy systems;

• Support reform in employment-creating industries that are enablers of higher productivity in the region, such as logistics and renewable energy; and

• Work with the private sector to create more relevant education, and more employable youth, by better aligning education outputs with the needs of the private sector.

1 IMF, Regional Economic Outlook. 2012

2 World Bank, ‘From Privilege to Competition. Unlocking Private-Led Growth in the Middle East and North Africa’, 2009. IFC / Islamic Development Bank, Education for Employment: Realizing Arab Youth Potential, 2011.

Investment Climate


III. FY12 Results

The focus in FY12 was to engage, and build, new programs and projects with governments, which would contribute to addressing the economic causes of the Arab Spring. The new projects, described below, are not yet mature enough to report results. Rather, results reflect the portfolio that existed 12 to 18 months ago, of which 70 percent was based in Yemen. As projects in Yemen could not report results due to political instability, results are based on Alternative Dispute Resolution (ADR), and projects in Jordan, Egypt and Afghanistan. Despite this, the program substantially exceeded targets for the fiscal year.

In this fiscal year, the value of funds released exceeded $120 million, nearly four times its target. More than 60,000 firms benefited from procedures streamlined by IFC projects in Afghanistan, Jordan, and Egypt, resulting in savings to the private sector exceeding $56 million, against a target of around $22 million. The number of cases resolved through ADR mechanisms supported by IFC reached 727, against a target of 220.

(Tho

usan

ds)


IV. Program Highlights

Following the early closure of seven projects in Yemen due to political violence, the Investment Climate business line was successful in refocusing and expanding its response to the Arab Spring by delivering a total of eight new projects in Tunisia, Egypt, Jordan, Lebanon, and the West Bank and Gaza. Two new regional pro-grams, the e4e Initiative for Arab Youth and Debt Resolution, were also developed.

Program expenditures grew by 38 percent to $6.8 million, the highest ever total for the MENA Investment Climate program and the fastest growing investment climate program globally. Our client survey has indicated 100 percent satisfaction with services provided by the Investment Climate business line, up from 86 percent in FY11.

Projects Approved in FY12

• Lebanon:AlternativeDisputeResolution• Jordan:InspectionReformII• Lebanon:SimplificationandAutomation• WestBankandGaza:BusinessStart-up• Egypt:Sub-nationalDoingBusiness• Jordan:DebtResolution• Tunisia:RegulatoryReform• Lebanon:DebtResolution

Business Regulatory Reform

The Business Regulatory Reform program grew from one active project to six.

• In Jordan, we started an ambitious program to rationalize inspection procedures across government, and introduce risk-based processes for targeting the most important inspections.

• With IFC support, the Afghan Ministry of Commerce and Industry is streamlining the issuance of new trade licenses by eliminating six redundant procedures. Over the past six months, more than 5,500 businesses have obtained new licenses and benefited from the reform.

• In Tunisia, while working closely with the World Bank, IFC launched a wide-ranging effort to remove barriers to competition, reform the investment framework, and rapidly eliminate unnecessary procedures. The Ministry of Finance has already reviewed 300 formalities and will eliminate over 10 percent of these, as well as streamline many others.

• In Egypt, IFC is carrying out a diagnostic assessment of the investment climate in 15 governorates, complementing policy dialogue on decentralization.

• In Lebanon, the Regulatory Reform and Automation project will streamline licensing processes, while also creating a model for ICT-based regulatory reform, with one-stop shops to be applied across a number of sectors.


Alternative Dispute Resolution and Debt

Resolution

The Alternative Dispute Resolution portfolio is now in full implementation with a large effort to train practitioners in Lebanon, Egypt, Morocco, and Pakistan, as well as a regional network of practitioners created in Morocco, Lebanon and Egypt.

• In Morocco, IFC organized a Judicial Mediation conference attended by the Ministers of Justice of Morocco and Egypt, the Swiss Ambassador, and judges and experts from the United States, United Kingdom, France, and the region. Consensus was reached to introduce a law on judicial mediation.

• A new project was approved in Lebanon in August, and the first Lebanon Mediation Center was opened in April. The event was attended by the Minister of Information, the head of the Chamber of Commerce, Industry and Agriculture of Beirut and Mount Lebanon, lawyers, and the media.

• In Pakistan, we refocused on Lahore, assigning a cooperation agreement with the Lahore Chamber of Commerce and Industry. The Lahore Mediation Center opened in August.

Debt Resolution and Exit: A sound loan recovery, restructuring, and insolvency system promotes growth and stability by allowing unviable firms to exit efficiently, or reorganize operations and debt, thereby saving jobs. The MENA region has underperformed

compared to most of the world’s regions, except for South Asia, in the Closing a Business indicator in the Doing Business 2011 Report, with a recovery rate of just 33 cents per dollar.

IFC is working on reforming bankruptcy regimes in Tunisia, Egypt, Jordan and Lebanon. In-country consultations with stakeholders on the proposed reforms have been held in Egypt and Tunisia, based on technical reviews of the insolvency regimes prepared for each country. Work has also begun on redrafting laws and regulations. IFC has also assisted the World Bank and the Tunisian government in coming up with a strategy to deal with the very high levels of non-performing loans in the tourism sector.

Industry-Specific Reform

Industry-specific reform efforts focused on preparatory and scoping activities, targeted logistics in Egypt, agribusiness in Morocco, and renewable energy in Egypt and Pakistan, all of which serve a dual-role. They are important industries in their own right from an employment standpoint, and they also serve – in particular, education, logistics and renewable energy – to improve the investment climate for all firms.

The e4e Initiative for Arab Youth

The e4e Initiative focuses on providing Arab youth with skills relevant to the marketplace to increase their job prospects. The initiative offers a framework for focused IFC investment and advisory efforts targeting youth employability. The strategy rests on three pillars:

I. Catalyzing private investment in employment-focused education.

II. Improving the enabling environment by addressing ecosystem failures and regulatory constraints, and strengthening quality assurance and accreditation frameworks.

III. Changing mindsets on the role of the private sector in education, and the perception of vocational and workforce-readiness training as a choice for enhancing employment prospects.

“The success of the this project will not only

leadtofinancialsavings,butwillextend

to other areas vital to the success of the

inspectorate, including upgrading the skills

of the inspectors, implementing an identi-

fiedmechanismforcommunication,and

coordination among the relevant monitoring

entities.”

Maha Ali, Secretary General of the Ministry of

Industry and Trade, Jordan.


Diagnostic assessments have now been completed in Jordan and Tunisia, and shared in workshops. The results have influenced Jordan’s employment strategy, while the Prime Minister of Tunisia has requested deeper e4e engagement. Diagnostics for Egypt and Morocco are being completed.

The first e4e advisory project, approved in July, focuses on the ICT sector in Jordan. The sector can potentially employ thousands more people and become regionally competitive, but is unable to obtain graduates with the leadership, teamwork, and problem solving skills demanded by the industry.

Public-Private Dialogue

With more citizens mobilized, public-private dialogue is now more important than ever to ensure a participatory reform process that includes all voices.

• More than 120 invitees from government, business and development partners attended the launch of the second Islah Reform Index in Egypt in June, led by the Alexandria Business Association (ABA). Representatives from different ministries and governmental authorities committed to engage in reform dialogue and set up collaborative working groups. Several business associations were also interested in collaborating with ABA for the third issue of the Reform Index.

• In Cairo, IFC organized and delivered, along with the World Bank Institute and World Bank, a workshop on social entrepreneurship and inclusive business. Over a dozen progressive businesses agreed to partner with us in efforts to reach new entrepreneurs through the Development Marketplace, which kicks off in October 2012. We are also developing a pilot project to remove obstacles to inclusive businesses and social entrepreneurs.

V. Challenges and Lessons Learned

It was a year of major challenges - creating new programs, new products, and new client relationships, while also contending with some very difficult, and sometimes violent, political transitions in Egypt, Yemen, Tunisia, and Pakistan. These transitions, while creating opportunities, were also the source of some disappointment when government counterparts with whom we had reached an understanding were replaced.

The team was stretched by new challenges throughout the year, including understanding a rapidly changing political environment, establishing effective relationships with new clients, negotiating new projects, managing the rigorous IFC project design process, and raising funds to support new programs. For new programs, such as Debt Resolution and the e4e initiative, the team worked hard to manage the tension between establishing results frameworks that are standardized and can be aggregated, but also flexible enough to respond to individual client needs. We learned, most of all, to be patient, pragmatic, and motivated by the challenges we faced.


VI. Future Prospects

We face a unique moment, and an opportunity to rethink how the private sector is regulated and create a more inclusive and competitive economy. In addition to the projects approved in FY12, we enter FY13 with a robust pipeline, based on pre-implementation work done this year, including Debt Resolution projects in Tunisia and Egypt, e4e projects in Tunisia, Morocco and Egypt, and the previously mentioned projects in renewable energy and logistics.

This gives us the basis for helping clients realize the potential of this opportunity. The focus will therefore shift from program growth to working with clients to successfully initiate and scale up reform in FY13. This will require us to be carefully attuned to the political economy of reform, while also focusing on our clients’ technical needs. We expect to moderate the pace of growth, but to continue to increase the number of projects, annual program expenditure, and reported results.

Egypt: Empowering the Private Sector as a Reform Partner

For years, many would-be entrepreneurs have struggled to overcome the red tape that goes along with starting a business or getting an operating permit in Egypt. This has hampered development in a country hungry for growth.

To help change that, IFC is working with the Alexandria Business Association to drive business reform. In June 2012, the association launched the second edition of the Islah (Reform) Index, which looks at the business environment in the country’s two largest cities. It is part of a process that has seen IFC support theassociationas it takeson the role,first,ofagovernmentwatchdog, and, now, a true partner in the reform process.

“The Egyptian private sector has tremendous potential, but complex procedures and regulations are holding back many businesses, especially smaller firms,” saysMagdiM.Amin, theheadof the InvestmentClimatebusiness line. “By having its own index, the private sector can focus the agenda on the most important reforms, necessary to create jobs and encourage economic development.”

The Islah Index examined the ease of doing business in Cairo and Alexandria, focusing on 10 policy areas, including starting a business, dealing with licenses, registering property, employing workers, and paying taxes. This initiativewasaculminationofatwo-phase,five-yearprojectsupportedbyIFC, which has supported the ABA and helped develop the methodology behind the Islah Index since 2007.

While uncertainty remains, ABA Chairman Mohamed Ghatwary says itis important to move forward with efforts to encourage foreign and local investment.

27ACCESS TO FINANCE


Micro, small, and medium enterprises are important parts of every economy, creat-ing employment, and playing a key role in economic growth. In the MENA region, MSMEs account for up to 40 percent of private sector employment. Yet lack of ac-cess to finance for many MSMEs continues to be a key barrier to business growth. The regional credit gap for MSMEs is estimated at more than $150 billion3. Accord-ing to the global Findex study, the MENA region also has the lowest penetration rate in the world for retail finance, combined with the widest gender gap for women to access finance4.

In the context of the Arab Spring, addressing the demand for jobs and equity through the development of MSMEs is one of IFC’s top priorities. With most of the region’s financial institutions inclined to extend credit only to large commercial clients and top retail customers, IFC’s work to improve access to finance among MSMEs is of critical importance.

New opportunities to improve access to finance among MSMEs are emerging in countries such as Egypt, Jordan, Lebanon, Libya, Morocco, Pakistan and Tunisia, as the government and private sector put greater emphasis on MSMEs to create jobs and foster more equitable growth.


The Access to Finance business line aims to enhance access to financial services for MSMEs and poor households by providing them with new investment opportunities, as well as affordable options to save and insure themselves against risk. To achieve this goal, IFC seeks to strengthen the capacity of banks and microfinance institutions in the areas of corporate governance, risk management, product development and business strategy, to enhance their outreach to MSMEs.

IFC also provides advisory services to governments to improve critical financial sector infrastructure for MSME banking, including credit bureaus, secured lending systems, and mobile banking.

III. FY12 Results In an effort to meet the challenges of the region, the business line has significantly increased activities in FY12, with 12 new project approvals with a total value of $6.1 million. They include initiatives in Lebanon, Morocco, Tunisia, and the West Bank and Gaza. Overall, the Access to Finance business line had 27 active projects in 13 countries, including 14 projects in IDA and fragile and conflict-affected countries. To support the growth of the business line with continued focus on quality and client satisfaction, we strengthened our expertise base by hiring six senior specialists cov-ering SME banking, housing finance and microfinance. We also joined forces with the World Bank and established the joint World Bank IFC MSME facility to scale up outreach and strengthen financial services to MSMEs in MENA.

3 McKenzie Study commissioned by IFC.

4 The Global Findex Database.

Access to Finance


The MENA MSME Facility - aWorldBankGroup initiative -mobilizes acomprehensive package of advisory services and policy support to scale up and strengthen financial services to MSMEs in the Arab World. It is aholistic and timely response to the increased priority placed on generating opportunities for MSMEs and employment in the MENA region.

The MSME Facility aims to improve the business environment for MSME finance,buildthecapacityoffinancialinstitutionsforsustainablemicrofinanceand SME banking, and support MSMEs through more relevant business development services. The facility is expected to impact more than 250,000 MSMEs over the next four years.

The facility combines the leadership and expertise of the World Bank and IFC, and provides a powerful platform for collaboration with other donors, focused on accelerating inclusive growth and job creation through the region’s MSMEs.

It focuses on five priority countries: Morocco, Tunisia, Egypt, Jordan andLebanon. The total budget is $32.5 million of which $15 million has already been mobilized,withsignificantdonorcontributionsfromDFID/UKaid ($10.5 million) and Japan. Switzerland’s SECO, Italy, and Luxembourg have also expressed an interest in contributing.

In FY12, we exceeded our targets in the SME banking space due notably to the successful outcome of Habib Bank (HBL), one of Pakistan’s leading banks, and Bank of Palestine in the West Bank and Gaza. With regard to the microfinance program, the results are behind target. One of the assumptions in setting targets for both the number and value of micro-loans was based on 11 microfinance projects contributing in FY12. However, only three projects reported results and the remaining were either delayed or dropped, as a result of the volatile conditions in the region. We expect strong results in FY13 both for microfinance and SME banking as 12 new projects have been approved in FY12.

29

Another excellent result is the level of client satisfaction with the services provided by the business line. Client satisfaction with the overall work delivered increased significantly to reach 90 percent, from 65 percent in 2011. IV. Program Highlights

The Access to Finance business line has three programs: Bank Advisory Services, which helps banks scale up their MSME finance as well as housing finance; Micro-finance Advisory, which helps microfinance institutions grow responsibly; and the Financial Infrastructure Advisory, which works to improve the enabling environment for lending to MSMEs.

Bank Advisory

The Bank Advisory Services program provides services to strengthen the capacity of financial institutions to better serve MSMEs. It offers technical advice and expertise in key business areas such as market segmentation, product development, and risk management, with a special focus on women enterprises and sustainable energy finance. The program continued its work across the region with engagements in Lebanon, Pakistan, Saudi Arabia, Tunisia, and the West Bank and Gaza, focusing on developing SME lending, and supporting the creation of robust risk management frameworks. In FY12, $1 million in cash fees was collected from clients, signaling their strong commitment to growing the MSME lending portfolio, and the value they placed in IFC services. In addition, business development efforts have led to a robust pipeline of projects in Egypt, Jordan and Pakistan, which will be launched in FY13.

ACCESS TO FINANCE


In FY12, the program was successful in:

• Providing in-depth advisory services on SME banking, including improving customer segmentation, sales delivery channels, management information systems, and the development of a business strategy in Pakistan, Saudi Arabia, the West Bank, and Lebanon. We helped a leading bank in Pakistan, HBL, establish a state-of-the-art SME unit leveraging advanced scoring tools, including psychometric testing. We also helped BLC Bank in Lebanon launch a successful new banking program, the Women Entrepreneur (WE) initiative. We are now planning to roll out the Women Entrepreneur banking program to banks in Jordan, Oman and Pakistan;

• Strengthening the banking industry’s understanding of SME lending and risk management by holding conferences in cooperation with the Central Bank of Lebanon, Central Bank of Saudi Arabia, Union of Arab Banks (UAB), and the State Bank of Pakistan;

• Raising awareness among local banks on the business opportunities related to sustainable energy efficiency lending. Agreements have been signed with Lebanon’s BLF and Tamweelcom in Jordan to advise them on developing energy efficiency products. Other banks in Egypt and

Jordan have also expressed an interest in these products; and

• Launching a survey for businesswomen in the Middle East and North Africa at the first MENA Businesswomen Network forum, which attracted more than 350 participants. The survey, a collaboration between MENA Businesswomen Network, Vital Voices, and IFC, will gather information from 2,500 women entrepreneurs in 10 MENA countries to help financial institutions better target their product offering to women in business.

Microfinance

The Microfinance program seeks to help microfinance institutions (MFIs) reach scale, diversify their product offering beyond microcredit and improve their capacity to manage risks.

In FY12, the program had a portfolio of eight active projects in Egypt, Iraq, Morocco, Pakistan, Tunisia and Yemen. Among other achievements, the program succeeded in helping:

• Al Amal MF Bank, the leading microfinance bank in Yemen, to develop a world class financial management system and sound product development capacity;

• Al Amana, the largest microfinance institution in Morocco, to put in place a state-of-the-art risk management system and better control its non-performing loans;

• ENDA, the largest microfinance lender in Tunisia, develop a comprehensive advisory package including corporate governance, risk management and product development, with a focus on youth entrepreneurs;

• DBACD, a leading MFI in Egypt, to launch a housing microfinance product; and

• The integration of MFIs in Egypt and Pakistan into the credit bureau system to help them better manage credit risk, avoid over-indebtedness of borrowers, improve efficiency, and service a larger number of micro and small entrepreneurs.

Overall, six new projects were approved in FY12 with a total value of $3.4 million.

“The conference ‘Small and Medium En-

terprises, An Attractive Sector for Maghreb

Banks’, held in Tunisia in April 2012 in

partnership with IFC, highlighted the impor-

tance of SMEs through the presentation of

various studies. IFC played a pivotal role in

formulating the important topics and show-

casingthesignificanceoftheArabbanking

sector in general, and the Maghreb banking

sector in particular, to contribute to, and

support,SMEfinancing.”

Wissam Fattouh, Secretary General of UAB

31ACCESS TO FINANCE

IFC Helps Micro and Small Businesses in Yemen

During his second year at university, Mohammed Al Sharabie was short on money, and on the verge of dropping out. He was running a fruit and vegetable shop in the Yemeni capital, Sana’a, on the side, but he had little money to stock it properly and business was slow. But one day, after hearing an advertisement on the radio, Al Sharabie decided to go to Al Amal MicrofinanceBank,anIFCclient,forhelp.Theygavehimaloanof80,000Yemeni Rial (about $375), which he managed to parlay into a thriving shop.

Mohammed is one of thousands of micro and small business owners who havebenefitedfromthesupportofAlAmal,whichhasbeenanIFCAdvisoryServicesclientforthreeyears.IFChashelpedAlAmalshoreupitsfinancialmanagement systems, develop a marketing and product development department, and train staff members. During these three years, the bank has seen its number of active borrowers jump to 24,000, and its loan portfolio increase to $4 million.

“IFCisoneofthemostreliablepartnersofAlAmalMicrofinanceBank,”saysMohammed Al Lai, the bank’s chief executive, adding that IFC’s support has helpedthebankattractfinancingfromahostofmajordonors.

Support for Al Amal is part of IFC’s Access to Finance business line, which helps banks and other financial institutions reach out to micro and smallenterprises across the region. IFC helps build the capacity of these lenders by offering advice on risk management, product development, corporate governance, and business strategy. The work is especially important in Yemen wherethereisadearthofmicrofinanceinstitutionsandmorethanhalfthepopulation lives in poverty.

“Smaller businesses are the backbone of most economies in the Middle East and North Africa,” says Luke Haggarty, IFC’s head of Advisory Services in theMENAregion.“Bysupportinglendersastheyreachouttothesefirms,we can help create jobs and stoke economic growth, making lives better for people across the region.”

HeaddsIFCiseagertocontinueworkingwithAlAmalandothermicrofinanceproviderstoenhanceaccesstofinanceacrossthecountry.


Financial Infrastructure

The Financial Infrastructure program seeks to improve the enabling environment for lending to MSMEs by developing a best practice secured lending framework, effective credit reporting infrastructure, mobile payment platforms, and conducive leasing laws.

In FY12, the program operated in seven countries through the implementation of 13 projects, including three IDA and conflict-affected states (Afghanistan, Pakistan, and the West Bank and Gaza).

In FY12, the following results were achieved:

• Credit Reporting: Three new projects were launched in FY12 with the focus on integrating microfinance providers with private credit bureaus. The aim is to ensure greater outreach of the bureaus and address problems with cross-lending and the over-indebtedness of borrowers. In addition, as part of the Arab Credit Reporting Initiative, a regional partnership with the Arab Monetary Fund (AMF), two in-depth country assessments were completed in Iraq and Morocco. Support has also been provided to stakeholders in Jordan to ensure the establishment of the first private credit bureau

• Secured Lending: The program expanded into two new countries – Lebanon and the United Arab Emirates - where work began on drafting and supporting the enactment of a best practice legal framework for secured transactions. In the West Bank and Gaza, work has begun on the establishment of an online collateral registry for movable assets, with the software application under development. In Afghanistan, the collateral registry has been fully developed in the Central Bank (DAB) and will be launched soon under a new legal framework previously created.

• Leasing: A new, best-practice leasing law was adopted by the Council of Ministers of the Palestinian Authority, with its full enactment expected soon. The program has also engaged with Afghanistan Growth Finance, a local finance company, on establishing a leasing company. Discussions have been held on IFC’s potential role in supporting the establishment of this company under the new legal framework we have been helping to create in Afghanistan. IFC is also conducting a comprehensive leasing market assessment in Egypt, to be completed in early FY13, with the findings due to be presented to the Egyptian government. It includes information on how to improve and strengthen the country’s leasing sector.

• Mobile payment: In FY12, the business line began to explore ways of supporting the deployment and uptake of mobile financial services in MENA as a way to promote financial inclusion in the region. This included:

- Conducting market assessments and diagnostics to better understand the mobile payment space, identify partnership opportunities for IFC in high/medium potential MENA countries, and articulate proposals to clients (regulators, banks, MNOs, PSPs) on how to introduce and scale up mobile financial services in select countries of the region; and

33ACCESS TO FINANCE

- Sharing and broadening information on the latest developments in mobile money through knowledge sharing and awareness raising activities.

Country assessments were conducted in Egypt, Tunisia, Lebanon and Morocco with reports developed and published. Going forward, the program will focus on developing projects in high potential countries, such as Egypt, Lebanon, Morocco, and Pakistan. Several knowledge management activities are planned for FY13 as part of the program implementation.


The Access to Finance business line faces the challenge of striking a balance between responding to a broad range of client needs, and diverse country situations. In response, the business line is moving toward a client-centric strategy by offering client solutions integrating two or three advisory products. Our project with BLC bank in Lebanon is a good example of this, integrating corporate governance, risk management, and gender finance. We are also bringing products from other business lines to the offering. For example, we are partnering with the Sustainable Business Advisory business line to offer SME capacity building services through banks. Three such projects were implemented in FY12 and more are planned for FY13. Likewise, within the framework of the MSME Facility, the World Bank and IFC are conducting joint scoping missions with country officials and private sector representatives to identify the main hurdles to MSME development. In FY12, we developed a holistic plan for MSME development in Jordan and Egypt. Morocco and Tunisia will follow in early FY13.


In FY13, we will continue to ramp up access to finance programs across the region. We will deepen our successful partnership with the World Bank and other donors in the MSME Facility in western MENA, and continue to build our expertise to better serve our clients. We will also put more emphasis on collaboration with long-term partners, such as CGAP and GIZ, on microfinance regulations, and local organizations, such as Silatech, the Arab Monetary Fund and the Union of Arab Banks. In addition, IFC will increase its focus on women-run businesses, and develop a new practice on Islamic finance products and housing finance.



Although the Arab Spring of early 2011 has brought hope and better long-term prospects for the democratization and economic development of the MENA region, post-revolution turbulence has exacerbated the short- and medium-term challenges. While private sector development and infrastructure investments have stalled in many middle-income countries, millions of young people will enter the region’s work force over the next decade, greatly increasing the demand for jobs. Limited arable land and severe water scarcity are expected to become major constraints to establishing food security across the region, which already imports nearly 40 percent of its food. At the same time, the region struggles to meet the increasing demand for already scarce energy and water resources, necessitating greater focus on improving efficiency and ensuring sustainable development.

The private sector, in particular MSMEs in manufacturing, agriculture and services, is expected to be the main driver of economic growth and innovation. However, limited access to international markets, lack of a skilled workforce, and high resource intensity prevent firms from exploiting their potential for growth.

Poor corporate governance also remains a major obstacle to accessing financing, limiting business growth and job creation. The political upheaval across the region has decreased investor confidence and further undermined the investment environment.


The Sustainable Business Advisory business line aims to help the private sector adopt environmental, social, trade, and governance standards and practices, as well as technologies that create a competitive edge. We seek the broad adoption of these practices to transform markets and improve people’s lives in sectors such as agribusiness, manufacturing, services, and infrastructure. We do this by helping SMEs improve their performance and competitiveness by supporting them to adopt better management practices and technologies, thereby enabling them to access new markets and attract investment. We also work with lead companies to identify opportunities and mobilize capital to invest in inclusive and sustainable businesses in the region. The business line also helps businesses mitigate the effects of climate change.

III. FY12 Results

In FY12, the business line had 17 projects spanning eight countries, including two regional projects. Of these projects, nine were in IDA countries (Afghanistan, Pakistan, Yemen), and six in conflict-affected areas (Afghanistan, the West Bank and Gaza, Yemen). Results continued to improve over FY11, with results at the outcome and impact level exceeding overall targets for the year.

More specifically, the business line has facilitated capacity building services - primarily through our local and regional partners - to more than 7,300 individuals (21 percent women) and over 1,800 MSMEs, with the aim of improving their performance and competitiveness.

Sustainable Business Advisory

35SUSTAINABLE BUSINESS ADVISORY

This year, we also have a record 812 entities, including large corporations, SMEs and farmers, reporting that they have improved their performance as a result of capacity building services provided by IFC, or an IFC-supported market intermediary.

Moreover, our efforts to contribute to the reduction of GHG emissions have started to bear fruit, with over 12,000 metric tons per year expected to be avoided as a result of measures put in place by building owners and companies, in response to recommendations made by IFC, and an IFC-supported market intermediary. These measures include changes in operational practice and the adoption of new technologies.

In FY12, 80 percent of business line clients responding to our annual client satisfaction survey indicated that they were satisfied with our work overall.


IV. Program Highlights The Sustainable Business Advisory business line is structured around three program areas: (i) climate change; (ii) farmer and SME training, and environmental, social, and trade standards; and (iii) corporate governance.

Climate Change

The program works to reduce resource intensity and support low carbon growth by facilitating investments in technologies and tools to enable and improve the efficient use of energy, water, and materials. We also identify opportunities to utilize, and demonstrate, the commercial viability of clean energy, and remove barriers to such investments. The aim is to displace fossil fuel-based power generation and increase access to clean energy. Against this backdrop, the program engages in three different areas, namely resource efficiency, green buildings, and clean energy.

Resource Efficiency:

IFC is supporting the private sector across the region with cleaner production assessments to identify and implement resource efficient practices and technologies. We work with individual, groups of firms, and electricity and water utility companies to extend these services to their industrial and commercial consumers. Key highlights from FY12 include:

• Support to Nuqul Group – a pulp and paper company based in Jordan - to reduce operating costs by $1.5 million annually by reducing annual energy consumption by roughly 6,000 MWh, and water use by 117,000m3. This is equivalent to avoiding 21,000 tons of CO2 emissions annually; and

• Cleaner Production audit completed for FUBA, specialized in producing printed circuit boards, in Tunisia. The major cost-effective opportunities identified are metals recovery from industrial wastewater amounting to annual savings of $156,947, and annual energy savings of 2,000 MWh.

(Met

ric to

ns)


IFC Supports Recycling in Pakistan

A few years ago, one of Pakistan’s leading paper and board manufacturers had a hard time getting its hands on recycled paper. The company, Packages, wanted to increase its share of local wastepaper because it was environmentally friendly and more cost efficient, but there was a severeshortage of suppliers in Pakistan.

That prompted a partnership with IFC, which worked with the company to build a supply network from the ground up, beginning in 2010. Packages nowhascontractswith85businesses–fromofficecomplexestodedicatedsuppliers–andcollects250tonsofrecycledpaperamonth.

The program has not only helped conserve a valuable resource, it has also shownothercompaniesthatthereisasignificantfinancialbenefittorecycling.In the last nine months, Packages has saved $124,000 and channeled an additional $270,000 into the local economy.

“Giventhescarcityofnaturalresourcesfacingmanycountriesintheregion,it’s important for companies to understand that sustainable business is good business” says Sylvia Zulu, head of IFC’s Sustainable Business Advisory business line in the Middle East and North Africa.

The recycling initiative is part of a wider effort by the Sustainable Business Advisory business line, which works with firms to adopt environmental,social and governance practices that create a competitive edge. Its programs supportsmallfirms,femaleentrepreneurs,andfarmers,whileengagingtheprivatesectorinfightingclimatechange.

The partnership with Packages is a prime example of how sustainability-related projects can take off. The recycling program became commercially viableinninemonths–lessthanhalfthetargettime.“Theprogrammakesenvironmentalandfinancialsenseforbothusandourpartnercompanies,while it helps develop the local economy,” says Aslam Mehdi, GeneralManager of Packages.

IFC and Packages are now exploring ways to expand the system across Pakistan. One option being studied is the establishment of a franchising system, where smaller businesses will be provided with a turnkey solution for organizing wastepaper collection.


Green Buildings:

IFC supported the Lebanon Green Building Council (LGBC) in developing and formally inaugurating Lebanon’s first green building rating system, ARZ (Cedar in Arabic), initially targeting existing commercial buildings. Once widely adopted, the ARZ rating system will lead to significant carbon emission reductions in the building sector, as well as considerable economic savings for building owners. Key highlights from FY12 include:

• BLC Bank’s headquarters being awarded a bronze certificate by LGBC, thus becoming the first building in Lebanon to be ARZ-rated.

• Two clients - Bank Audi and Byblos - investing in measures aimed at improving the resource efficiency of buildings, informed by recommendations made by LGBC. Bank Audi invested a total of $780,000, mainly into improving its lighting system as well as installing variable frequency drives. Byblos Bank announced a tender for lighting, amounting to over $150,000.

Clean Energy:

IFC launched its Clean Energy program to encourage the private sector to adopt, and invest in, clean energy technologies. The program includes interventions at company, sector and regulatory levels to develop renewable energy solutions for captive power in resource-intensive industries, off-grid power for

productive use in rural areas, and distributed power with utilities for meeting peak load demand.

The program has begun to explore the possibility of working with industrial estates, electricity distribution companies, and energy intensive private sector companies in Pakistan, Jordan, and Egypt to utilize biomass and solar for the self-generation of electric and thermal energy. It is also supporting the private sector’s entrance into the small-scale hydropower market.

Farmer and SME Development

This program aims to improve the business performance and competitiveness of farmers and SMEs in local and international markets. The idea is to leverage lead firms and strengthen local market intermediaries (mostly training providers) to deliver practical, localized management training and information, using IFC’s Business Edge and SME Toolkit. It also promotes the adoption and deployment of internationally recognized standards, enhancing environmental and social performance.

The program was successful in:

• Creating 240 direct jobs by enabling farmers to scale up and improve their packing operations in response to export requirements. It also built the capacity of 40 agriculture graduates, who became qualified to work as extension workers, providing technical support to grape and pomegranate farmers in Kandahar, Afghanistan. In addition, 100 grape drying houses were constructed in accordance with global best practices, resulting in increased farm productivity by reducing processing times by half;

• Facilitating export contracts worth $184,000, awarded to West Bank SMEs after they showcased their olive oil brand Daskara at the Fancy Foods Fair in Washington D.C.. A group of West Bank SMEs involved in olive oil bottling and exporting received IFC support to improve their operations through compliance with industry best practices, traceability, and environmental practices, and gained access to high-end markets through a unified marketing framework initiative;

“The ARZ rating not only paves the way for

environmentalbenefitsbutitalsomakes

business sense, because it provides cost

savings with the return on investment in a

periodoflessthanfiveyears.Suchaninitia-

tive needs to be undertaken by all compa-

nies as it is an easy thing to do.”

Mr. Raoul, General Manager of BLC Bank – the

first building in Lebanon to be ARZ-rated.


• Increasing the outreach of its Business Edge network of 28 training providers to 519 unique MSMEs and 5,842 individuals, 25 percent of whom were women, through the provision of management and business skills training in Afghanistan, Egypt, Pakistan, and Yemen;

• Launching localized versions of the SME Toolkit in Arabic and English, in collaboration with Qatar Development Bank, Khalifa Fund for Enterprise Development, and Jordan Ahli Bank, to enable the wide dissemination of business information and tools to SMEs;

• Signing an agreement with the Microfinance Investment Support Facility for Afghanistan (MISFA) licensing them to deliver Business Edge training initially to 75 branch managers and staff in their network;

“Mytrainingmademeconfident.Wewere

trained to talk intelligently about business,

to conduct market surveys, and to save

for unexpected situations. We were also

given the chance to consult successful dairy

farmers. When we surveyed the market, we

discovered that selling fresh milk made busi-

ness sense. We then bought a cow and two

calves, a stock of feed, and a shredder. With

our new business, we are making around

6000 rupees a month, in addition to my

husband’s income. It is much easier to take

careofthefamilynow.Withprofitsovera

few months, we may be able to buy poultry

and extend the business.”

Mrs, Maimoona Kausar , Village Bochaal,

Jehlum, Punjab Pakistan (attended Business Plan-

ning Course)

IFC Helps a Small Woman-owned Education Business to Grow in Yemen.

Laila Uthman owns a school in the Yemeni port city of Hodiedah. Struggling to compete with the many private schools in the country and facing a national crisis in 2011, when poverty indicators in the poorest Arab country skyrocketed, Laila’s school was in bad shape.

With her 25-member staff also unhappy, she found herself constantly having to recruit to replace those leaving. The school revenues had never broken the $42,000 mark. Laila wanted to reach $50,000, and she also wanted her staff to stay, but she wasn’t sure how she could make this happen. Then she heard about Business Edge and decided to invest her time in training workshops covering marketing, human resources and basic accounting topics.

Soon afterwards, Laila’s new learning began to bear fruit. She began including her staff in the decision-making process, and they supported her in undertaking a market analysis. They discovered that their competitors charged higher fees but believed their school offered better quality. With strong teacher backing, Laila decided to increase fees and deploy a promotional strategy whereby existing pupils would receive a small discount for every new enrolment they brought to the school.

In the six months since undergoing the training, Laila’s revenues increased by 50 percent, jumping to $65,000. She has also increased staff salaries and recruited an additional fiveteachers. Her new approach to management is more inclusive, allowing for delegation and a higher sense of ownership to problem solving by her staff. Laila herself now has more time to plan as she spends less time dealing with ‘urgent’ daily issues.


• Presenting and distributing the first ever global study on the business case and benefits of banks facilitating non-financial business development services to SMEs in emerging countries at IFC’s SME banking conference in Beirut, attended by 200 participants; and

• Conducting the first impact assessment of Business Edge training on SME owners in Pakistan. This showed that 73 percent of respondents used the skills they learned, 62 percent saw a positive impact on their business, and 43 percent saw an increase in revenue, as a result of the training. Most of the respondents were from the farming and trading sector.

Corporate Governance

The program helps companies, including family-owned businesses and SMEs, attract investment by improving their corporate governance practices. It also works with investors to incorporate sustainable investment practices into their investment decisions.

The Corporate Governance program continued its efforts to strengthen corporate governance practices across the region, with an increased focus on helping restore investor confidence in the wake of the Arab Spring. The program was particularly successful in:

• Launching bank governance training in Tunisia and Pakistan for directors and senior executives of banks and financial institutions. IFC helped strengthen the capacity of partners to improve overall corporate governance practices in the financial industry in both countries. In Tunisia, IFC delivered the first ever corporate governance training package for directors and CEOs from the country’s leading banks and financial institutions, in collaboration with the World Bank and the Central Bank of Tunisia. Thirty-six bank executives, audit and risk committee members, and members of the Central Bank’s supervision team, attended this event. In addition, a one-day workshop was held, training 14 participants, comprising directors and CEOs of financial institutions and banks. Both events reinforced the key elements of the Tunisian Banking Code - developed in collaboration with the World Bank – which focus on transparency and disclosure, the importance of audit and risk committees for the board, and the need for independent board directors. In Pakistan, 24 faculty members from the Pakistan Institute of Corporate Governance (PICG) were trained in a two-day workshop, which led to building institutional capacity for bank governance training in Pakistan. PICG launched its first intake of bank governance training based on IFC governance material, and 15 bank directors and senior managers were trained by PICG on good corporate governance practices of banks.

• Developing the first corporate governance initiative for SMEs, aimed at training SMEs in how to implement sound corporate governance standards to improve their performance, increase access to finance and foster sustained growth. In cooperation with several partners, IFC conducts interactive workshops using newly developed SME corporate governance training material, one of the first of its kind in MENA. A training of trainers’ workshop was also conducted with partners to increase the outreach of the newly developed material, in addition to training consultants to equip them with the necessary tools to provide corporate


governance assessments to SMEs. These workshops have already reached over 100 participants in Cairo and Dubai, with plans for roll out in IFC globally.

• Engaging with various central banks and other regulators in Tunisia, Morocco, Jordan, Pakistan, and Yemen, to strengthen corporate governance codes and disclosure requirements, and enact three new codes.

New Initiative to Improve Listed Companies through Scorecards

The Corporate Governance Program provided technical assistance to theJordanSecuritiesCommissiontodevelopaCorporateGovernanceScorecardforListedCompanies.Thisisthefirstcorporategovernancescorecardofitskind in MENA. It provides a framework for securities regulators and stock exchanges to promote international standards of corporate governance to listed companies. It also enables companies to self-assess the scope and quality of their own governance, and provides a systematic and succinct overview of corporate governance issues for analysts and investors to incorporate into their due diligence process.

• Delivering training and consultations to 580 companies around the region on board oversight, transparency, and corporate conduct. The aim was to help these companies demonstrate sound governance to the market and advance gender diversity in board participation, especially in Egypt, Jordan and Pakistan. As a result of IFC’s efforts on advising on the importance of (gender) diversity to increase board effectiveness, seven women have been appointed as board directors in Pakistani companies.

• Strengthening the capacity of local partners, such as the Moroccan Institute of Directors, Pakistan Institute of Corporate Governance, and Jordanian Forum for Corporate Governance and Responsibility, to provide corporate governance services on a sustainable basis.


Despite the disruptions caused by the Arab Spring and the consequent economic slow down, we succeeded in implementing more than 80 percent of our planned activities for FY12. First, our increased focus on expanding the reach and scope of our corporate governance activities, through our three hubs in Morocco, Egypt and Pakistan, was well received, and seen as an effective and efficient way to help restore investor confidence in the private sector, especially among SMEs. Second, our efforts to expand our management skills training and standards work to new areas (North Africa) and new segments (unemployed youth, micro enterprises and farmers), combined with greater sector focus and integration across other advisory service programs (agribusiness and financial markets) increased opportunities for firms, including MSMEs, and improved youth employability, providing immediate response to the needs of the private sector and governments in the region, specifically in post-revolution countries. Finally, although the high fuel, electricity and water subsidies have adversely affected the expansion of our resource efficiency program, we have recorded a significant interest and found new ground


for supporting resource efficiency and renewable energy by focusing on countries and sectors that are already impacted by the scarcity of energy and water resources.


In FY13, we will continue to expand our work program in response to the identified areas of need in the region, including agribusiness and food security, water and energy scarcity, SMEs and farmer skills, access to markets, youth employability, and corporate governance. In particular, we will increase our impact on MSMEs by developing integrated solutions to support their development and upgrade in key sectors such as agribusiness, finance and manufacturing. This will include scaling up work with lead companies that work with MSMEs and farmers. We will also expand both our training delivery network and training content and, in countries in political transition, continue to contribute to increasing youth employability. In addition, we plan to continue building on our work in IDA, and fragile and conflict-affected countries, especially Afghanistan, Iraq and Pakistan. Our corporate governance footprint will increase across North Africa and in conflict-affected countries, such as Afghanistan and Iraq. Further, we will increase the reach of our corporate governance offering for SMEs. In the climate change area, we will continue to promote resource efficiency by focusing on work with aggregators, such as water and electricity utility companies, industrial estates and other lead companies. We will also support the private sector in adopting the use of renewable energy through captive power solutions, as well as promoting off-grid renewable energy technologies such as hydro in Pakistan, and solar across the region, to support improved access to energy for productive use in rural areas.

43PUBLIC-PRIVATE PARTNERSHIPS


Economic growth in the MENA region is hampered by poor infrastructure. Regional governments often lack the financial resources to make the necessary investments in new infrastructure, or the capacity to improve the operation and use of existing infrastructure assets.

Through public-private partnerships (PPP), the private sector can facilitate better infrastructure investments while reducing the budgetary and fiscal constraints on governments. The private sector can also help improve efficiency, innovation, and managerial capabilities, which can translate into better services. Given the substantial need for investment in building and upgrading infrastructure, PPPs alone will not be sufficient. However, in sectors with identifiable revenue sources, PPPs could be the preferred procurement method, thereby allowing limited public funds to flow towards other priority areas. PPPs also tend to have shorter construction times and fewer cost over-runs. They have successfully integrated development and construction with operations and long-term asset maintenance.

While these advantages should result in more PPPs, the number of projects undertaken through PPPs remains small, despite the high priority attached to them by several governments. This is because successful PPPs often require: a legal, regulatory, and institutional environment that allows them to be well-structured, balanced and sustainable; political commitment at the highest level, to attract the private investment; and capacity within the public sector to understand the public-private interface, and improve the transparency of the procurement.

The need for the private provision of infrastructure and social-infrastructure services (including health and education) has been greatly heightened following the Arab Spring, primarily for two reasons. First, a realization that inadequate and poor quality public services were part of the reason for the general discontent among the population and, second, the further shrinking of the fiscal space for the public financing of infrastructure projects.


While IFC is addressing these issues by continuing to focus on our traditional role in implementing bankable transactions, we have also begun to address this situation, together with our partners. Our aim is to increase knowledge of PPPs among regional governments, strengthen their capacity to identify and prepare potential PPPs for the market, and increase available funding and guarantees to help increase the maturity, and/or reduce the risk perception, of investors. As such, our approach is as follows:

• In an effort to help governments understand the opportunities and limitations of PPP arrangements, we are intensifying our knowledge dissemination efforts in the region by holding more PPP seminars. These bring together public service participants and private investors, lenders and operators.

• We also intend to work upstream on project development (which had not been our focus previously) in project identification and initial project preparation

Public-Private Partnerships


phases, to help address the issue of capacity and increase the deal flow in the region. Activities under this category will focus on supporting the PPP units to conduct preliminary project screenings by undertaking initial due diligence and feasibility studies, as necessary, to improve the project pipeline.

• We will continue to increase our focus on building the necessary capacity within the public sector to prepare bankable projects through the development of strategic partnerships.

To help finance these activities, we established the Arab Financing Facility for Infrastructure (AFFI), together with the IBRD and Islamic Development Bank (IsDB), to support private infrastructure and PPPs in the Arab World through various instruments. These include a policy forum, a technical assistance facility, the Arab Infrastructure Investment Vehicle, and a public window (to be financed by an IBRD loan). AFFI is designed as an umbrella facility to support in-country and cross-border infrastructure projects, in particular PPPs, in the region. While the AFFI-Technical Assistance Facility is initially financed by IsDB, IFC and IBRD, the facility is designed to attract other donors to provide funds for project preparation and knowledge sharing.

III. FY12 Results

FY12 continued to be affected by the political unrest in the region and the resulting slow-down in public decision-making. This resulted in only two mandate signings: an extension of the programmatic MoU in Egypt, and a solid waste management project in the West Bank and Gaza. IFC has completed its report with recommendations to the client in the West Bank and Gaza; the client has accepted it and has now decided to move forward with the transaction.

Despite the political situation, IFC successfully closed three deals: the first health sector PPP and second PPP deal in Egypt, via 20-year concession contracts for two new hospitals in Alexandria, and the successful close of Medina Airport in Saudi Arabia.

In FY12, 100 percent of our PPP clients who responded to our annual client satisfaction survey indicated that they were satisfied with our work overall.


IV. Program Highlights

During FY12, IFC signed one new mandate for the West Bank and Gaza, an extension of its PPP program in Egypt, and successfully closed three deals: two in Egypt and one in Saudi Arabia.

• In Egypt, the business line facilitated the closure of the first health sector PPP and second-ever PPP deal, with the award of a 20-year concession contract to a private consortium for two new hospitals in Alexandria, Egypt’s second largest city. The Alexandria Hospitals project is estimated to provide access to improved health services to more than 78,500 patients in a population center of 7.4 million. This project establishes the viability and validity of PPP projects in building Egypt’s future in a rapidly changing political climate. IFC also signed an extension of its program in the country to identify new infrastructure projects that could be procured on a PPP basis.

• In Saudi Arabia, IFC helped our clients conclude a major deal - Medina Airport. This is a 25-year concession for the rehabilitation, expansion, development, operation, and maintenance of the airport. The project is likely to serve as a model for replication for major airports elsewhere. Medina Airport alone will result in approximately $1.3 billion in private investment, and handle up to 8 million people in its initial years of operations. That will be recorded as a result in future fiscal year

• In Pakistan, IFC is providing advisory services to the governments of Punjab and Sindh, relating to the development of Punjab and Sindh Grain Storage projects. At the end of FY12, the prequalification process for both projects was completed, and bidders were shortlisted on key technical and financial criteria. Seven parties were prequalified for the Punjab Grain Storage Project, and three for the Sindh project. Following prequalification, the bidding process for both projects was launched in June 2012, with the Request for Proposals and Draft PPP Concession Agreement shared with all prequalified parties. Following this tender launch, and in accordance with Punjab and Sindh’s PPP Acts, a series of pre-bid one-on-one investor meetings are planned to be held in July 2012 with each prequalified party for both projects. These meetings will cover detailed discussion with investors and their advisors on technical and legal aspects of the Project. In addition, IFC is seeking to sign an MoU on both governmental and provincial levels, to identify new PPP development opportunities. Although it is still in its early stages, IFC is also looking at a livestock vaccines project, as well as an infrastructure investment fund project, to help locally finance any potential new infrastructure opportunities.

• The business line also held a forum on knowledge dissemination and capacity building with more than 200 participants. The focus of the forum was to provide an opportunity for senior policymakers, investors, lenders, advisors, and other experts to discuss the implications of the Arab Spring, share global and regional experiences and lessons learnt, identify opportunities, and promote ways to improve the viability of PPPs in the region. The seminar was co-hosted by the Higher Council of Privatization of the Republic of Lebanon, and held in collaboration with the Public-Private Infrastructure Advisory Facility (PPIAF) and the Islamic Development Bank.


IFC Supports State-of-the-Art Hospitals in Egypt

In an effort to improve healthcare in Egypt, IFC recently advised the country’s government on a groundbreaking public-private partnership to build two teaching hospitals in the coastal city of Alexandria.

ThedealwasthefirstofitskindinEgypt’shealthcaresectorandisexpectedto help many of the 7.4 million people who live in and around Alexandria. The agreement, signed in April, will see a private consortium construct and operate a 200-bed obstetrics and gynecology center along with a 224-bed hospital specializing in neurosurgery and nephrology.

“This agreement will expand access to high quality health services to thousands of Egyptians,” says Osama Ibrahim Al-Sayed Ahmad, the president of Alexandria University.

The deal marked the culmination of years of hard work by the Public-Private Partnership (PPP) business line, which has spearheaded several other major PPPs in the region, including a waste-water plant outside Cairo and an airport in Amman, Jordan. Based in part on that track record, the Egyptian government is looking at similar projects in other sectors, including power and transport.

“This project demonstrates that the private sector can play an important role in extending high-quality basic services to those who need it most,” says Moazzam Mekan, Manager of IFC’s Infrastructure Advisory in the Middle East and North Africa.

The agreements also demonstrate the excellent long-term potential of Egypt’s economy, despite its struggles since a popular uprising in early 2011.

“Despite the current economic challenges, this signing demonstrates that investors have confidence in Egyptian public-private partnerships and thecountry in general,” says Atter Hannoura, the director of the government unit in charge of PPPs.

The agreement will see Alexandria University and Bareeq Hospitals Company, aconsortiumcomprisingBareeqCapital,Detac,G4S,andSiemens,combineforcestodesign,finance,construct,andpartiallymanagethenewSmouhaand Mowassat university hospitals.



PPPs offer an important mechanism for procuring public services with a focus on their delivery. While nearly all MENA countries have some sort of PPP program, most have achieved few results. Shifting to a more successful program will require a greater commitment to bring about much-needed change and make decisions in a timely manner. The present political environment in the region presents both a challenge and an opportunity. The challenge involves moving away from rhetoric to the implementation of significant PPP transactions, which requires strong focus, leadership, human capacity, and timely decision-making. The opportunity lies in the form of increased awareness of the lack of good quality and insufficient public services and a desire to rectify this situation. The cash-strapped situation of many governments may also increase their move towards PPPs.

There is a substantial lack of capacity in the public sector when it comes to understanding PPPs and addressing key concerns. PPP contracts are different from other public procurements, due to their long tenures and risk profile. It is thus essential for public sector officials to understand the need for adequately balancing risk allocation between the parties. Appropriate training, in conjunction with transactions, is essential to build capacity within the public sector to undertake successful PPPs.

Our experience shows that governments have much greater chances of success in PPPs when they have a PPP program rather than a one-off transaction. A program allows governments to provide signals to investors on their willingness to include the private sector in the infrastructure space. It also helps build investor confidence and interest as they see a pipeline of projects, builds capacity within the public sector, and lowers transaction costs by standardizing the contractual framework. IFC has entered into memoranda of understanding with a number of governments, including Egypt, to assist in a series of pilot transactions across various sectors. We are also focusing on building awareness and capacity building in terms of PPP by organizing knowledge events and providing client-tailored PPP training. VI. Future Prospects

The continued upheaval in the MENA region has highlighted the need for better access and improved public services at affordable prices. In response, IFC has increased its efforts to work with member states to maintain investor interest and restructure projects, based on the new economic and political situation. We believe that successful PPP transactions in infrastructure are essential to restoring market confidence in these post-revolutionary economies.

The IFC has strengthened its base to meet emerging client demand. The completion of very high profile mandates in Egypt and Saudi Arabia has given the IFC the necessary leverage in the region to develop a strong transactional presence and support for the implementation of PPPs. In light of this success, IFC has increased its focus on PPPs in fragile and conflict-affected states. Both in the West Bank and Gaza, and Afghanistan, we have identified a number of possible areas for further collaboration with governments, including health, electricity, water, and transport, which will improve access and underpin governmental efforts to increase private participation in infrastructure.


I. FY12 Expenditure

In FY12, we sought to scale up our operations in response to the development challenges in the region, many of which had been highlighted by the Arab Spring, and increased demand. Initially, we had planned to increase the advisory services program by 11 percent - from $24.8 million in FY11 to $27.5 million in FY12. However, we were able to ramp up faster than originally planned and, with strong support from IFC management, exceeded the plan and executed just over $30 million, a 22 percent increase from last year.

We have been particularly successfully in ramping up our Access to Finance and Investment Climate programs with increases in expenditures of 65 percent and 38 percent respectively over the last year, despite the reduction in our portfolio in Yemen. As expected, our PPP operations continue to be affected by the political transition processes in the region, which has made it more difficult to sign new mandates in many countries. As such, the business line has intensified efforts in IDA and fragile and conflict-affected countries, and has hence been more active in Afghanistan and Iraq. Overall, the FY12 expenditure level of the PPP program was above our original plan. The Sustainable Business Advisory business line saw spending in line with FY11, although an increase had been expected this year. The under-run was due to the fact that the launching of new operations in Iraq and in the area of renewable energy took longer than anticipated, due to the cautious approach taken by many companies to investing, given the current uncertainty.

In FY11, IFC initiated an in-depth study into the cost allocation methodology of overhead costs (including rent, utilities, security, furniture, communications, IT costs) to project budgets. Initially, we had hoped to receive clarity and institutional guidance about how to budget and charge such expenses in FY12. When this proved not to be the case, given the complexity of the issue, regional management decided to absorb all overheads into Management and Administration (M&A), so as not to assign any of these costs to project budgets in FY12 (as the uncertainty of application was causing difficulties in planning and budgeting). Thus, in FY12, we are showing all overhead costs in the M&A category which makes it appear that there has been a substantial rise in M&A relative to FY11. To have comparable FY11 and FY12 figures, we have recalculated these costs using the old methodology (see figure opposite) which results in M&A charges of around 17 percent of the total costs in FY12; very similar to the 16 percent seen in FY11. The slight rise is mainly due to the overheads and security associated with the cost of our new office space in Iraq, as well as the addition of a donor relations officer in the region.

Going forward, we will be implementing IFC’s new standardized overhead cost allocation methodology to allocate costs to project budgets. This will make advisory services projects comparable throughout the corporation, and ensure that projects reflect their true cost of implementation. We expect that M&A costs will be approximately 15-16 percent of total costs next fiscal year.

Sources and Uses of Funding

49SOURCES AND USES OF FUNDING

II. Sources of Funding

The IFC business model is predicated on strong partnerships with like-minded partners and a consistent application of our pricing guidelines on projects, thus helping us to significantly leverage IFC funds with client and partner funding. To ensure stronger partner relationships and help us meet our goals in rapidly growing the program, we have added a senior donor relations officer this year.

Despite the transitional nature of this year, our partners continued to strongly support IFC’s efforts. This, together with the consistent application of our pricing guidelines for clients, has meant our leverage increased slightly in both areas, so that IFC is now meeting 38 percent of costs.

There have been questions this year from partners and our board on the application of the pricing guidelines, so it is worth taking a moment to review these, including how we apply them and why we believe they are important. In essence, the guidelines say that the higher the level of private benefits from a project (that is, those that accrue to specific firms) then the larger the share of project costs to be paid by the client; while projects with a higher level of public benefits (that is, benefits not captured to specific firms) then the higher the case for subsidy, and, therefore, lower levels of client contribution.

In our experience, we have much higher levels of impact in projects where client commitment and ownership is high and the client is motivated to make it succeed. In addition, we have consistently found that client commitment and ownership of project goals are much stronger when they contribute to the project cost. The IFC pricing guidelines are clear in intent, but adaptable to actual circumstances. Therefore, we do not have a one-size-fits-all pricing structure but, rather, we look


at each project individually, considering the flow of benefits to private and public actors and the situation of our clients when establishing pricing. We will continue to consider each project on a case-by-case to ensure we maintain our focus on developmental impact.

FY 11 FY 12

Donors

Cash Fees

IFC

50%

12%

38%

48%

10%

42%

Funding Structure

III. Client and Partnership Overview Client Partnerships

In FY12, we had 76 active client agreements, of which 55 were new agreements. These agreements are expected to bring in a total of $17 million over the course of project delivery. In FY12, the clients paid $4.8 million toward the agreements.

The PPP business line accounts for the lion’s share of cash fees to be collected from client agreements (77 percent) with most of this coming from success fees, which will only be collected from those projects that reach financial closure (globally, about 50 percent of PPP projects reach financial closure). The A2F business line has 17 client agreements totaling $3.3 million, nine of which were signed in FY12. The SBA business line has 44 active client agreements with 42 of these signed in FY12. Unlike other business lines, the SBA business line typically has several clients in each project, both at the intermediary and end client level, some of which are for delivery of advisory services which are very specific in scope and of relatively short duration. The IC business line has nine active client agreements, of which four were signed in FY12.

Donor Parterships

The implementation of the IFC Strategy and the Advisory Services program in MENA has benefited greatly from the enhancement of already excellent relations with our traditional partners, as well as the establishment of positive relations with new partners.

This year, we signed six new agreements with Japan, Denmark, the European Commission, SECO, UKAid and USAID, which are essential for scaling up our Advisory Services program in North Africa and the Levant. Additional agreements


– currently under finalization – will be crucial to implement the e4e Initiative for Arab Youth as well as our new debt resolution program seeking to secure higher returns to creditors in insolvency cases. The mobilization of funding through centrally managed trust funds has also been instrumental to the implementation of our activities in FY12.

A wide number of initiatives have also been carried out to ensure better coordination and alignment with our partners and other IFIs, particularly in the framework of the Deauville Partnership. We are hopeful that this effort will help ensure more coordination for the programs being implemented across the region, and a common approach and eventually more harmony on approaches to clients and issues such as pricing. We have made a special effort over the last two years to provide our partners with better information for planning and reporting, including a clearer definition of the relevant set of indicators and targets to be achieved. We hope this information is a useful tool for our donor partners to better assess the value for money proposition offered by our advisory services program. We are confident this will contribute to reinforcing the “win-win” partnership with our partners and ensure continued focus on results that make a real difference in MENA.

New Partnership Agreements

In FY12, we signed six new multi-year trust fund agreements totaling $14.3 million. Of this amount, $5.4 million has been deposited in our accounts and $1.9 million has been spent or committed. All

“The € 1.4 million administration agree-

ment signed between the European Union

andtheIFCisthefirstjointcooperationin

Lebanon of this kind. The EU-IFC program

aims to improve the Lebanese business

climate and puts together the best prac-

tices, commitment, and added value of IFC,

theLebaneseGovernment,andtheEuro-

peanUnion,tothebenefitofthepeople

living in Lebanon.

Angelina Eichhorst, Head of the European Union

Delegation to Lebanon

Table 1 : New agreements signed in FY12

Donor Scope / Purpose Geographical

Coverage Grant ($)

Amount deposited

($)

Amount Committed /

Spent ($)

Denmark Advisory Services program North Africa 915,000 915,751 825,845

UKaid A2F activities - MSME Facility North Africa & Levant

5,587,5005 2,383,330 554,447

USAID Jordan Inspection Reform Jordan 1,750,000 50,000 -

EC Investment Climate, including Financial Infrastructure

Lebanon 1,374,505 - -

SECO Advisory Services program (Private Sector Development)

Egypt 3,212,632 617,868 592,816

Japan A2F - MSME Facility North Africa & Levant

1,500,000 1,500,000 -

TOTAL 14,339,637 5,466,949 1,973,108

5 UKaid actually signed a tripartite agreement with IFC and WB to support, with $10.7 million, the implementation of the Joint IFC-WB MENA MSME

Technical Assistance Facility. $5.5 million is the amount earmarked to IFC.


six agreements are focused on the implementation of IFC’s strategy in North Africa and the Levant in the aftermath of the Arab Spring. Japan and UKaid contributed to the implementation of the joint IFC-WB Technical Assistance Window of the MENA MSME Facility. SECO’s contribution is aimed at supporting the development of the private sector in Egypt, and Denmark contributed to private sector development in North Africa. USAID and European Commission funding will contribute to the enhancement of the investment climate in Jordan and Lebanon respectively.

In addition to the six new agreements, we also mobi-lized an additional $3.9 million through centrally man-aged trust funds to support the delivery of advisory services in the countries of North Africa and the Le-vant, as well as IDA countries and fragile and conflict-affected states. Out of this amount, we committed or spent $2.5 million during FY11. Funding has been provided by the trust funds established by the gov-ernments of Canada, Luxembourg, the Netherlands, Spain and UKaid (via the Global SME Financing Facil-ity). Relevant contributions also come from the Perfor-mance Based Grant Initiative (PBGI) which is funded from IFC retained earnings, and the Public-Private Infrastructure Advisory Facility(PPIAF)56. The funding mobilized through centrally managed trust funds ben-efited all the four business lines.

Overall in FY12, a total of $18.2 million in funding was mobilized, of which 85 percent will support the delivery of advisory services in North Africa and the Levant, and 15 percent will go to IDA countries and fragile and conflict-affected situations. With these new agreements in place and additional agreements in the pipeline to be finalized in the first quarter of FY13, we believe we have laid the foundation for the smooth

6 The Public-Private Infrastructure Advisory Facility (PPIAF) is a multi-donor technical assistance facility created to help govern-ments in developing countries improve the quality of physical infra-structure through partnerships with the private sector. PPIAF helps governments to create policy, legal, and regulatory measures as well as capacity building to strengthen their ability to design, manage, and regulate reform programs. Capacity building and training is also provided for policy makers, regulators, and civil society groups. PPI-AF is financed by 16 multilateral and bilateral donors: Asian Develop-ment Bank, Australia, Austria, European Bank of Reconstruction and Development, France, Germany, International Finance Corporation, Italy, Japan, Millennium Challenge Corporation, Netherlands, Swe-den, Switzerland, the United Kingdom, the United States, and the World Bank

“We have chosen IFC as our partner in

private sector development for its innova-

tive approach. It is this creative and forward

looking way of thinking that we appreciate.”

Nicole P. F. Bollen, Head of International

Financial Institutions Division, Multilateral

Organisations and Human Rights Department,

The Netherlands

implementation of our program in the region in the new fiscal year, combined with the increased predictability of funding availability for the Access to Finance and Investment Climate programs in the coming years. With the revival of the Iraq Business Assistance Facility last year, we have also continued to dedicate resources to increasing our advisory services program in Iraq. At the beginning of the year, we fielded a country officer in our Baghdad office, located within the premises of the UK Embassy, and sent multiple missions to the country to scope and design the first tier of interventions there.


Table 2: Funding obtained through centrally managed Trust Funds in FY12

Donor Scope / Purpose Geographical

Coverage Grant ($)

Amount deposited

($)

Amount Spent ($)

Netherlands – IDA Countries

Credit Bureau

Pakistan 490,000 490,000 488,855 Business Edge

Corporate Governance II

Netherlands – Fragile and Conflict-affected Situations

Olive Oil Supply Chain

West Bank and Gaza

588,000 588,000 421,321 Microfinance Project

Business Registration

Netherlands – Renewable Energy

Off-Grid Power Production

Pakistan 214,000 214,000 15,920

PBGI

Microfinance Syria 310,000 310,000 161,643

DBACD Home Loans

Egypt 285,000 285,000 85,000

PPIAFPPP Transaction Structure

West Bank and Gaza

199,975 199,975 199,975

Canada - TATF

MENA SEF Program

MENA

255,000 255,000 51,772

UKaid Alfalah SMEbank Pakistan

800,000 800,000 697,070

UKaidCredit Bureau & Microfinance

Pakistan

150,000 150,000 -

LuxembourgSBA - Business Edge & SME Toolkit

MENA 190,000 190,000 54,020

Spain - TATFPPP - Solid Waste Management

West Bank and Gaza

395,000 395,000 310,995

TOTAL 3,876,975 3,876,975 2,401,571


IFC in the Deauville Partnership

At the launch of the economic pillar of the Deauville Partnership (September 11 2011), the IFIs involved in the partnership, including IFC, decided to create a joint coordination platform at the operational level to facilitate information sharing and operational dialogue with partner countries, identify opportunities for joint transactions, and coordinate monitoring and reporting on its imple-mentation. The African Development Bank chaired the rotating secretariat for one year. From September 2012, this secretariat role will be occupied by the Islamic Development Bank.

IFC is strongly committed to the Deauville Partnership and has developed a number of initiatives relating to the modules in which the Deauville Partnership hasbeenarticulated.UnderModule1:Matchmaking&co-investmentvehicle,IFC launched the MENA Fund - a regional equity fund to catalyze new private sectorinvestmentsintheregion.UnderModule3:SMEaccesstofinance,IFCand the World Bank received board approval for a MENA SME Facility and ne-gotiations are ongoing for the participation of other IFIs in the initiative. Under Module5:FacilitationofPPPprograms,IFC–togetherwiththeIslamicDevel-opmentBankandtheWorldBank–setuptheArabFinancingFacilityforInfra-structure (AFFI) with other IFIs considering joining this initiative. Under Module 6:Skillsupgradingandvocationaltraining,IFCandtheIslamicDevelopmentBank jointly launched the e4e Initiative for Arab Youth as a tool to develop a private sector agenda to address the need for more relevant post-secondary education skills in MENA.

Since the launch of the Deauville Partnership, positive progress has been re-corded regarding better coordination between IFIs, bilateral donors and part-ner countries at all levels. More generally, IFC has been trying to ensure ef-fectivedonor/partnerconsultationthroughmeetingstohelpdefinewin-winopportunities for partnerships with other IFIs and harmonize the approach to donor reporting.

55ANNEX A: INDICATOR DEFINITIONS AND METHODOLOGY NOTES

Ann

ex A

Indi

cato

rD

efini

tions

and

Met

hodo

logy

Not

esIn

crea

sed

Acc

ess

to

Fin

ance

Ind

icat

or

Defi

nit

ion

Met

ho

do

log

y N

ote

fo

r R

epo

rtin

g o

n R

esu

lts

Ou

tco

me

Val

ue o

f mic

ro lo

ans

disb

urse

d

US

D e

quiv

alen

t of t

he m

icro

loan

am

ount

s

disb

urse

d du

ring

the

repo

rtin

g pe

riod

by th

e M

FI

rece

ivin

g IF

C’s

AS

. Thi

s in

dica

tor

mea

sure

s th

e

valu

e of

the

cred

it su

pply

dur

ing

that

rep

ortin

g

perio

d.

The

res

ults

for

this

indi

cato

r w

ill b

e re

port

ed b

i-ann

ually

by

the

proj

ect t

eam

. The

sou

rce

of in

form

atio

n fo

r th

e re

sults

rel

atin

g to

this

indi

cato

r w

ill b

e th

e cl

ient

s’ m

onth

ly a

nd/o

r qu

arte

rly o

pera

-

tiona

l rep

orts

. Res

ults

will

be

coun

ted

for

clie

nts

that

impl

emen

t at

leas

t one

IFC

rec

omm

enda

tion.

Val

ue o

f SM

E lo

ans

dis-

burs

ed

US

D e

quiv

alen

t of t

he S

ME

loan

am

ount

s

disb

urse

d du

ring

the

repo

rtin

g pe

riod

by th

e F

I

rece

ivin

g IF

C’s

AS

. Thi

s in

dica

tor

mea

sure

s th

e

valu

e of

the

cred

it su

pply

dur

ing

that

rep

ortin

g

perio

d.

The

res

ults

for

this

indi

cato

r w

ill b

e re

port

ed b

i-ann

ually

by

the

proj

ect t

eam

. The

sou

rce

of in

form

atio

n fo

r th

e re

sults

rel

atin

g to

this

indi

cato

r w

ill b

e th

e cl

ient

s’ m

onth

ly a

nd/o

r qu

arte

rly o

pera

-

tiona

l rep

orts

. Res

ults

will

be

coun

ted

for

clie

nts

that

impl

emen

t at

leas

t one

IFC

rec

omm

enda

tion.

Ou

tpu

t

SM

E B

anki

ng: n

umbe

r of

SM

E lo

ans

disb

urse

d

Num

ber

of S

ME

loan

s di

sbur

sed

durin

g th

e

repo

rtin

g pe

riod

by th

e F

I rec

eivi

ng IF

C’s

AS

.

Thi

s in

dica

tor

mea

sure

s th

e vo

lum

e of

the

cred

it

supp

ly d

urin

g th

at r

epor

ting

perio

d.

The

res

ults

for

this

indi

cato

r w

ill b

e re

port

ed b

i-ann

ually

by

the

proj

ect t

eam

. The

sou

rce

of in

form

atio

n fo

r th

e re

sults

rel

atin

g to

this

indi

cato

r w

ill b

e th

e cl

ient

s’ m

onth

ly a

nd/o

r qu

arte

rly o

pera

-

tiona

l rep

orts

. Res

ults

will

be

coun

ted

for

clie

nts

that

impl

emen

t at

leas

t one

IFC

rec

omm

enda

tion.

MF

: num

ber

of M

icro

loan

s di

sbur

sed

(of w

hich

wom

en)

Num

ber

of m

icro

loan

s di

sbur

sed

durin

g th

e

repo

rtin

g pe

riod

by th

e M

FI r

ecei

ving

IFC

’s A

S .

Thi

s in

dica

tor

mea

sure

s th

e vo

lum

e of

the

cred

it

supp

ly d

urin

g th

at r

epor

ting

perio

d.

The

res

ults

for

this

indi

cato

r w

ill b

e re

port

ed b

i-ann

ually

by

the

proj

ect t

eam

. The

sou

rce

of in

form

atio

n fo

r th

e re

sults

rel

atin

g to

this

indi

cato

r w

ill b

e th

e cl

ient

s’ m

onth

ly a

nd/o

r qu

arte

rly o

pera

-

tiona

l rep

orts

. Res

ults

will

be

coun

ted

for

clie

nts

that

impl

emen

t at

leas

t one

IFC

rec

omm

enda

tion.


Incr

ease

d A

cces

s to

F

inan

ceIn

dic

ato

rD

efin

itio

nM

eth

od

olo

gy

No

te f

or

Rep

ort

ing

on

Res

ult

s

Ou

tpu

t

Cre

dit B

urea

u: n

umbe

r of

cred

it re

port

s so

ld

Num

ber

of c

redi

t rep

orts

sol

d re

pres

ents

the

num

ber

of r

epor

ts w

hich

fina

ncia

l ins

titut

ions

obta

in fr

om a

cre

dit b

urea

u or

a p

ublic

cre

dit

regi

stry

abo

ut d

ebit

acco

unts

of t

heir

clie

nts.

The

res

ults

for

this

indi

cato

r w

ill b

e re

port

ed b

i-ann

ually

by

the

proj

ect t

eam

. The

sou

rce

of in

form

atio

n fo

r th

e re

sults

rel

atin

g

to th

is in

dica

tor

will

be

the

cred

it bu

reau

/pub

lic c

redi

t reg

istr

y.

Res

ults

will

be

coun

ted

for

clie

nts

that

impl

emen

t at l

east

one

IFC

reco

mm

enda

tion.

Ris

k m

gt: p

erce

ntag

e of

non-

perf

orm

ing

loan

s

(defi

ne m

ore)

Thi

s pe

rcen

tage

is c

alcu

late

d as

follo

ws:

loan

s

that

are

>90

day

s ov

erdu

e/ou

tsta

ndin

g lo

ans.

The

sou

rce

of in

form

atio

n fo

r th

e re

sults

rel

atin

g to

this

indi

cato

r

will

be

the

clie

nts’

mon

thly

and

/or

quar

terly

ope

ratio

nal r

epor

ts.

Res

ults

will

be

coun

ted

for

clie

nts

that

impl

emen

t at l

east

one

IFC

reco

mm

enda

tion.

Num

ber

of d

epos

it ac

-

coun

ts o

pene

d (p

erso

nal

acct

s)

Mea

sure

s sa

ving

s m

obili

zatio

n an

d ou

trea

ch:

new

acc

ount

s op

ened

dur

ing

the

repo

rtin

g

perio

d.

The

res

ults

for

this

indi

cato

r w

ill b

e re

port

ed b

i-ann

ually

by

the

proj

ect t

eam

. The

sou

rce

of in

form

atio

n fo

r th

e re

sults

rel

atin

g to

this

indi

cato

r w

ill b

e th

e cl

ient

s’ m

onth

ly a

nd/o

r qu

arte

rly o

pera

-

tiona

l rep

orts

.

Num

ber

of d

epos

it ac

-

coun

ts o

pene

d (p

erso

nal

acct

s), o

f whi

ch w

omen

Mea

sure

s sa

ving

s m

obili

zatio

n an

d ou

trea

ch:

new

acc

ount

s op

ened

dur

ing

the

repo

rtin

g

perio

d fo

r w

omen

dep

osito

rs.T

his

indi

cato

r is

a su

b-se

t of t

he in

dica

tor

“Num

ber

of d

epos

it

acco

unts

ope

ned

(per

sona

l acc

ts)”

.

The

res

ults

for

this

indi

cato

r w

ill b

e re

port

ed b

i-ann

ually

by

the

proj

ect t

eam

. The

sou

rce

of in

form

atio

n fo

r th

e re

sults

rel

atin

g to

this

indi

cato

r w

ill b

e th

e cl

ient

s’ m

onth

ly a

nd/o

r qu

arte

rly o

pera

-

tiona

l rep

orts

.


Imp

rove

d In

vest

men

t

Clim

ate

Ind

icat

or

Defi

nit

ion

Met

ho

do

log

y N

ote

fo

r R

epo

rtin

g o

n R

esu

lts

Ou

tco

me

Est

imat

ed v

alue

of a

g-

greg

ate

savi

ngs

to p

rivat

e

sect

or

Agg

rega

ted

cost

sav

ings

for

busi

ness

es r

esul

t-

ing

from

adm

inis

trat

ive

proc

edur

es/p

olic

ies/

prac

ties

that

wer

e im

prov

ed/e

limin

ated

and

/or

law

/reg

ulat

ion/

amen

dmen

ts/c

odes

pas

sed

in

the

juris

dict

ion

in w

hich

the

proj

ect o

pera

tes.

Num

ber

of a

ffect

ed fi

rms

X r

educ

tion

in c

osts

=

Agg

rega

te s

avin

gs. R

educ

tion

in c

osts

=re

duc-

tion

in o

ffici

al fe

es +

(re

duct

ion

in s

taff

time

X w

age

rate

) +

red

uctio

n in

oth

er c

osts

(e.

g.,

trav

el e

xpen

ses,

brib

es, e

tc.)

A n

ew to

ol is

und

er d

evel

opm

ent t

o es

timat

e th

e co

st s

avin

gs.

Ou

tpu

t

Num

ber

of b

usin

esse

s

com

plet

ing

new

/ref

orm

ed

proc

edur

e in

a g

iven

juris

-

dict

ion

(of w

hich

wom

en)

The

indi

cato

r is

inte

nded

to tr

ack

the

chan

ge in

the

tota

l num

ber

of b

usin

esse

s th

at c

ompl

eted

the

proc

edur

e im

prov

ed b

y th

e pr

ojec

t. F

or

exam

ple:

1)

the

proj

ect s

ets

up a

one

stop

-

shop

, the

tota

l num

ber

of c

ompa

nies

reg

iste

ring

thro

ugh

the

one-

stop

-sho

p sh

ould

be

repo

rted

here

; 2)

the

proj

ect s

trea

mlin

es th

e co

nstr

uctio

n

licen

sing

pro

cedu

re, t

he to

tal n

umbe

r of

com

pa-

nies

lice

nsed

sin

ce th

e ne

w p

roce

dure

was

put

in p

lace

sho

uld

be r

epor

ted

here

Dat

a w

ill b

e co

llect

ed fr

om p

roje

ct c

lient

s.

Num

ber

of c

ases

suc

-

cess

fully

set

tled

(of w

hich

wom

en)

Num

ber

of c

ases

that

are

res

olve

d th

roug

h

med

iatio

n ce

nter

s or

pro

ject

-tra

ined

med

iato

rs

Dat

a w

ill b

e co

llect

ed fr

om p

roje

ct c

lient

s.

Val

ue o

f fun

ds r

elea

sed

thro

ugh

AD

R (

of w

hich

wom

en)

Tota

l val

ue (

US

$)

of fu

nds

tran

sact

ed b

etw

een

part

ies

as a

res

ult o

f enf

orce

d se

ttlem

ents

(exc

ludi

ng a

ny la

wye

r or

oth

er fe

es).

Dat

a w

ill b

e co

llect

ed fr

om p

roje

ct c

lient

s.


Imp

rove

d In

vest

men

t

Clim

ate

Ind

icat

or

Defi

nit

ion

Met

ho

do

log

y N

ote

fo

r R

epo

rtin

g o

n R

esu

lts

Ou

tpu

t

Num

ber

of n

ew la

ws/

regu

-

latio

ns/a

men

dmen

ts, c

odes

draf

ted

or c

ontr

ibut

ing

to

the

draf

ting

(w

ill c

aptu

re a

ll

BLs

act

ivity

)

Law

s/re

gula

tions

/cod

es s

houl

d be

cou

nted

onl

y

if IF

C h

as s

igni

fican

tly c

ontr

ibut

ed to

the

draf

ting

of n

ew/a

men

ded

law

/reg

ulat

ion/

code

. The

pro

j-

ect s

houl

d co

unt a

men

dmen

ts s

epar

atel

y on

ly

if ea

ch a

men

dem

ent t

ackl

es a

sep

arat

e an

d

dist

inct

con

cept

. For

exa

mpl

e, a

pro

ject

wor

king

on a

n en

terp

rise

law

pro

posi

ng a

men

dmen

ts

on m

inim

um c

apita

l req

uire

men

t and

fore

ign

owne

rshi

p sh

ould

cou

nt tw

o am

endm

ents

.

How

ever

, if a

pro

ject

pro

pose

s tw

o am

endm

ents

to a

law

in o

rder

to r

educ

e ca

pita

l req

uire

men

t,

this

sho

uld

only

be

coun

ted

as o

ne.

Ow

n co

unt o

f law

/reg

ulat

ions

/cod

es d

rafts

as

per

the

defin

ition

of

the

indi

cato

r.

Num

ber

of r

ecom

men

ded

law

s/re

gula

tions

/am

end-

men

ts th

at w

ere

enac

ted

(will

cap

ture

all

BLs

act

ivity

)

For

exa

mpl

e: 1

) A m

unic

ipal

dec

ree

is e

nact

ed

whe

n si

gned

by

the

may

or o

r m

unic

ipal

as-

sem

bly;

2) A

min

iste

rial d

ecre

e is

ena

cted

whe

n

sign

ed b

y th

e m

inis

ter;

3) A

law

is e

nact

ed

whe

n pa

ssed

by

parli

amen

t and

sig

ned

into

law

and/

or p

ublis

hed

into

the

offic

ial g

azet

te; 4

) A

pres

iden

tial d

ecre

e is

ena

cted

whe

n si

gned

by

the

pres

iden

t.

Sum

mar

y in

form

atio

n on

all

law

s/re

gula

tions

pass

ed s

houl

d be

pro

vide

d in

the

com

men

ts

sect

ion

follo

win

g th

e in

dica

tor

sect

ion

in th

e

PS

R. I

nclu

de a

des

crip

tion

of th

e le

vel o

f im

ple-

men

tatio

n.

Ow

n co

unt o

f law

/reg

ulat

ions

/cod

es e

nact

ed a

s pe

r th

e de

finiti

on

of th

e in

dica

tor.

Doc

umen

tatio

n w

ill b

e ob

tain

ed fr

om p

ublic

or

clie

nt r

ecor

ds a

nd r

epor

ts.


Ou

tpu

t

Num

ber

of p

roce

dure

s,

polic

ies,

pra

ctic

es th

at w

ere

prop

osed

for

impr

ovem

ent

or e

limin

atio

n (w

ill c

aptu

re

all B

Ls a

ctiv

ity)

Num

ber

of im

prov

emen

ts, a

dditi

ons

or e

limin

a-

tions

rec

omm

ende

d by

the

proj

ect.

For

exa

mpl

e, 1

) w

e pr

opos

e to

can

cel 1

00

perm

its a

nd im

prov

e is

suin

g pr

oced

ures

for

10

perm

its -

110

impr

ovem

ents

are

cou

nted

; 2)

we

reco

mm

end

to im

prov

e bo

th S

anita

ry a

nd

Fire

insp

ectio

n th

roug

h ris

k ca

tego

rizat

ion

- 2

impr

ovem

ents

are

cou

nted

; 3)

we

reco

mm

end

the

Cus

tom

s O

ffice

com

pute

rize

thei

r pr

oces

s-

ing

syst

em -

1 im

prov

emen

t is

coun

ted;

4)

we

reco

mm

end

elim

inat

ing

nota

ry fe

es w

hen

regi

s-

terin

g a

busi

ness

- 1

impr

ovem

ent i

s co

unte

d;

5) w

e re

com

men

d th

e m

unic

ipal

ity p

rovi

de

info

rmat

ion

on m

arke

t pric

es to

rub

ber

plan

ters

-

1im

prov

emen

t is

coun

ted.

Ow

n co

unt o

f pro

cedu

res/

polic

ies/

prac

tices

pro

pose

d fo

r im

-

prov

emen

t or

elim

inat

ion

as p

er th

e de

finiti

on o

f the

indi

cato

r.

Num

ber

of p

roce

dure

s,

polic

ies,

pra

ctic

es th

at w

ere

impr

oved

or

elim

inat

ed (

will

capt

ure

all B

Ls a

ctiv

ity)

Pro

cedu

res/

polic

ies/

prac

tices

sho

uld

be c

ount

-

ed h

ere

only

whe

n th

e pr

ojec

t find

s re

ason

able

proo

f of i

mpl

emen

tatio

n. In

cas

es o

f dec

entr

al-

ized

impl

emen

tatio

n, c

ount

impr

ovem

ent o

r

elim

inat

ion

only

if y

ou c

an d

ocum

ent a

t lea

st a

10%

impl

emen

tatio

n ra

te (

follo

win

g th

e D

oing

Bus

ines

s gu

idel

ines

).

Sum

mar

y in

form

atio

n on

all

proc

edur

es/p

oli-

cies

/pra

ctic

es im

prov

ed o

r el

imin

ated

sho

uld

be

prov

ided

in th

e co

mm

ents

sec

tion

follo

win

g th

e

indi

cato

r se

ctio

n in

the

PS

R. I

nclu

de a

des

crip

-

tion

of th

e le

vel o

f im

plem

enta

tion.

Ow

n co

unt o

f law

/reg

ulat

ions

/cod

es e

nact

ed a

s pe

r th

e de

finiti

on

of th

e in

dica

tor.

Doc

umen

tatio

n w

ill b

e ob

tain

ed fr

om a

rep

ort o

r

decr

ee in

dica

ting

that

pro

cess

es h

ave

been

impl

emen

ted.

Ou

tpu

t

Indu

stry

: Num

ber

of in

ves-

tor

inqu

iries

in ta

rget

ed

sect

ors

(of w

hich

lead

to

inve

stm

ent)

Num

ber

of in

quiri

es r

ecor

ded

by a

n in

vest

men

t/

indu

stry

pro

mot

ion

agen

cy fr

om p

oten

tial i

nves

-

tors

that

led

to a

n ac

tual

rec

orde

d in

vest

men

t.

Dat

a w

ill b

e co

llect

ed fr

om th

e cl

ient

s w

ith s

uppo

rtin

g do

cum

enta

-

tion

incl

udin

g em

ails

and

exp

ress

ion

of in

tere

sts.


Su

stai

nab

le B

usi

nes

s A

dvi

sory

Ind

icat

or

Defi

nit

ion

Met

ho

do

log

y N

ote

fo

r R

epo

rtin

g o

n R

esu

lts

Ou

tco

me

Num

ber

of e

ntiti

es r

epor

t-

ing

impr

oved

per

form

ance

(e.g

. im

prov

ed p

rodu

ctiv

ity,

oper

atio

ns, a

cces

s to

cap

i-

tal,

etc)

(W

ill c

aptu

re r

esul

ts

for

all B

Ls)

Num

ber

of c

lient

s an

d/or

ben

efici

arie

s re

port

ing

impr

oved

ope

ratio

ns, c

lear

er r

oles

, red

uced

cos

t

of c

apita

l, im

prov

ed lo

an te

rms,

hig

her

valu

a-

tions

, etc

. as

a re

sult

of th

e A

S r

ecei

ved.

Ple

ase

refe

r to

sep

arat

e m

etho

dolo

gy n

ote.

Ou

tpu

t

GH

G E

mis

sion

s av

oide

d

(will

cap

ture

all

BL

activ

ity)

Mea

sure

s th

e to

ns o

f gre

enho

use

gas

emis

-

sion

s (G

HG

) a

tech

nolo

gy/im

prov

emen

t/

plan

tatio

n is

exp

ecte

d to

avo

id d

urin

g on

e

year

of o

pera

tion

com

pare

d to

a “

busi

ness

as

usua

l” sc

enar

io. T

his

annu

al r

ate

is d

eriv

ed

from

ene

rgy

use

expe

cted

to b

e av

oide

d an

d/

or r

enew

able

ene

rgy

expe

cted

to b

e pr

oduc

ed

indi

cato

rs.

TB

D b

ased

on

corp

orat

e-w

ide

effo

rts

to d

eter

min

e m

etho

dolo

gy

for

repo

rtin

g on

res

ults

Num

ber

of p

artic

ipan

ts in

wor

ksho

ps, t

rain

ing

even

ts,

sem

inar

s an

d co

nfer

ence

s

(of w

hich

wom

en)

(will

capt

ure

all B

Ls a

ctiv

ity)

Num

ber

of in

divi

dual

s at

tend

ing

wor

ksho

ps/

trai

ning

eve

nts/

sem

inar

s/ c

onfe

renc

es, e

tc. T

his

can

incl

ude

IFC

AS

eve

nts

that

are

run

by

IFC

’s

clie

nts

and

othe

r pr

ojec

t par

tner

s. H

ead-

coun

ts

or s

ign-

in s

heet

s at

pro

ject

eve

nts

can

be u

sed

as th

is in

dica

tor

does

not

req

uire

a u

niqu

e co

unt

of tr

aine

es (

e.g.

, if a

per

son

atte

nds

3 di

ffere

nt

trai

ning

eve

nts,

the

coun

t is

3). T

his

does

NO

T

incl

ude

thos

e tr

aine

d by

pro

ject

-tra

ined

NG

Os/

trai

ning

par

tner

s/co

nsul

tant

s/ed

ucat

iona

l ins

titu-

tions

. Tra

iner

s tr

aine

d ar

e in

clud

ed h

ere.

Hea

d co

unt a

nd s

ign-

in s

heet

s at

eve

nts.


Ou

tpu

t

Num

ber

of M

SM

Es/

Far

m-

ers

rece

ivin

g ca

paci

ty b

uild

-

ing

supp

ort

Num

ber

of M

SM

Es/

Far

mer

s re

ceiv

ing

capa

city

build

ing

supp

ort r

ecei

ving

cap

acity

bui

ldin

g

supp

ort f

rom

IFC

or

proj

ect-

trai

ned

peop

le a

nd

inst

itutio

ns (

prop

osed

defi

nitio

n)

Ple

ase

refe

r to

sep

arat

emet

hodo

logy

not

e.

Num

ber

of in

divi

dual

s

trai

ned

by p

roje

ct tr

aine

d

peop

le/in

stitu

tions

(of

whi

ch

wom

en)

Num

ber

of in

divi

dual

s in

wor

ksho

ps/tr

aini

ng

even

ts/s

emin

ars/

conf

eren

ces,

etc

. con

duct

ed

by p

roje

ct-t

rain

ed tr

aine

rs a

nd/o

r in

stitu

tions

.

Ref

. Defi

nitio

n

Num

ber

of u

nem

ploy

ed

yout

h tr

aini

ng p

artic

ipan

ts

empl

oyed

6-1

2 m

onth

s

post

trai

ning

Num

ber

of u

nem

ploy

ed y

outh

trai

ning

par

tici-

pant

s em

ploy

ed 6

-12

mon

ths

post

trai

ning

Ref

. Defi

nitio

n

Incr

ease

d In

vest

men

t in

infr

astr

uct

ure

In

dic

ato

rD

efin

itio

nM

eth

od

olo

gy

No

te f

or

Rep

ort

ing

on

Res

ult

s

Ou

tco

me

Val

ue o

f fina

ncin

g fa

cili-

tate

d (f

rom

agr

eed

cont

ract

- no

t act

ual i

nves

tmen

t to

date

)

Tota

l am

ount

of p

rivat

e in

vest

men

t req

uire

d to

impl

emen

t the

pro

ject

, exp

ress

ed in

US

$. W

hen

inve

stm

ent i

s ex

pect

ed to

take

pla

ce o

ver

a

perio

d of

tim

e, th

e va

lue

is e

xpre

ssed

as

NP

V

usin

g a

10%

dis

coun

t rat

e. It

is a

ssum

ed th

at n

o

priv

ate

inve

stm

ent w

ould

be

mob

ilize

d w

ithou

t

IFC

Adv

isor

y w

ork.

Bas

ed o

n th

e va

lue

in th

e co

ntra

ct s

igne

d be

twee

n th

e go

vern

-

men

t and

the

win

ning

bid

der

Ou

tpu

t

Num

ber

of r

epor

ts (

asse

ss-

men

ts, s

urve

ys, m

anua

ls,

Str

ateg

ic O

ptio

ns R

epor

ts)

com

plet

ed

i) R

epor

ts th

at a

re s

ubm

itted

to th

e cl

ient

in a

stan

dard

adv

isor

y se

rvic

es p

roje

ct:

1. S

trat

egic

Opt

ions

Rep

ort

2. In

form

atio

n M

emor

andu

m

3. P

re-q

ualifi

catio

n re

port

4. B

iddi

ng d

ocum

enta

tion

ii)

For

oth

er n

on-s

tand

ard

advi

sory

pro

ject

s

(sem

inar

s), t

his

incl

udes

a r

epor

t abo

ut th

e

proc

eedi

ngs

of th

e se

min

ar.

Rep

ort o

n th

e nu

mbe

r of

rep

orts

sub

mitt

ed d

urin

g th

e co

urse

of

the

proj

ect,

as p

er IF

C in

tern

al r

ecor

ds.


Incr

ease

d In

vest

men

t in

infr

astr

uct

ure

In

dic

ato

rD

efin

itio

nM

eth

od

olo

gy

No

te f

or

Rep

ort

ing

on

Res

ult

s

Ou

tpu

t

Num

ber

of r

epor

ts a

c-

cept

ed b

y cl

ient

Rep

orts

that

are

acc

epte

d by

the

clie

nt in

a

stan

dard

adv

isor

y se

rvic

es p

roje

ct (

acce

ptan

ce

indi

cate

s th

eir

agre

emen

t with

the

repo

rts

and

mov

ing

forw

ard

with

the

proj

ect a

t eac

h st

age)

:

1. S

trat

egic

Opt

ions

Rep

ort

2. In

form

atio

n M

emor

andu

m

3. P

re-q

ualifi

catio

n re

port

4. B

iddi

ng d

ocum

enta

tion

Rep

ort o

n th

e nu

mbe

r of

rep

orts

acc

epte

d by

the

clie

nt d

urin

g th

e

cour

se o

f the

pro

ject

, as

per

IFC

’s in

tern

al r

ecor

ds.

Num

ber

of a

dvis

ory

man

-

date

s si

gned

(be

twee

n IF

C

and

gove

rnm

ent)

Sig

nals

the

star

t of t

he m

anda

te -

ref

ers

to th

e

Fin

anci

al A

dvis

ory

Ser

vice

s A

gree

men

t sig

ned

betw

een

IFC

and

the

gove

rnm

ent.

Rep

ort o

n th

e nu

mbe

r of

agr

eem

ents

sig

ned

betw

een

IFC

and

diffe

rent

gov

ernm

ents

, as

per

IFC

’s in

tern

al r

ecor

ds.

63ANNEX B: FISCAL YEAR 2012 RESULTS AND TARGETS

Ann

ex B

Fisc

al Y

ear

2012

Res

ults

and

Tar

gets

FY

12F

Y11

-12

Ou

tco

me

Ind

icat

or

Targ

etR

esu

ltR

atio

of

ach

ieve

-m

ent

Targ

et t

o

dat

e

Res

ult

s to

dat

eR

atio

of

ach

ieve

-m

ent

Po

rtfo

lioP

ost

-Im

pTo

tal

Po

rtfo

lioP

ost

-Im

pTo

tal

Incr

ease

d ac

cess

to

finan

ce

Val

ue o

f Mic

ro lo

ans

dis-

burs

ed (

US

$)55

8,94

8,96

0 19

0,82

4,38

0 5

1,05

8,21

3 24

1,88

2,59

3 43

%62

4,69

6,69

1 24

4,70

6,04

3 5

1,05

8,21

3 29

5,76

4,25

6 47

%

Val

ue o

f SM

E lo

ans

dis-

burs

ed (

US

$)16

4,47

7,72

0 13

7,54

7,49

0 29

2,79

5,61

9 43

0,34

3,10

9 26

2%29

3,47

0,72

2 32

7,79

6,35

0 29

2,79

5,61

9 62

0,59

1,96

9 21

1%

Impr

oved

in

vest

men

t cl

imat

e

Est

imat

ed v

alue

of a

ggre

-ga

te p

rivat

e se

ctor

sav

ings

(U

S$)

from

rec

omm

ende

d ch

ange

s

21,7

50,9

49

50,9

17,1

45

5,78

2,28

6 56

,699

,431

26

1%60

,200

,819

11

8,49

6,71

5 5,

782,

286

124,

279,

001

206%

Sus

tain

able

B

usin

ess

Adv

isor

y

Num

ber

of e

ntiti

es r

epor

t-in

g im

prov

ed p

erfo

rman

ce

(e.g

., im

prov

emen

ts in

pr

oduc

tivity

, ope

ratio

ns,

loan

term

s, v

alua

tions

)

533

483

329

812

152%

577

911

329

1,24

0 21

5%

Incr

ease

d in

vest

men

t in

infr

astr

uctu

re

Val

ue o

f fina

ncin

g fa

cili-

tate

d (U

S$)

(fr

om a

gree

d co

ntra

ct -

not

act

ual i

nves

t-m

ent t

o da

te)

190,

800,

000

1,52

5,00

0,00

0 -

1,52

5,00

0,00

0 79

9% 9

90,8

00,0

00

1,52

5,00

0,00

0 -

1,52

5,00

0,00

0 15

4%


FY

12F

Y11

-12

Ou

tpu

tIn

dic

ato

r T

arg

etR

esu

ltR

atio

of

ach

ieve

-m

ent

Tar

get

to

d

ate

Res

ult

s to

dat

eR

atio

of

ach

ieve

-m

ent

Po

rtfo

lioP

ost

-Im

pTo

tal

Po

rtfo

lioP

ost

-Im

pTo

tal

Incr

ease

d ac

cess

to

finan

ce

Num

ber

of S

ME

loan

s di

sbur

sed

3,29

62,

908

10,1

8313

,091

397%

5,09

046

,233

10,1

8356

,416

1108

%

Num

ber

of m

icro

loan

s di

sbur

sed

1,63

6,45

019

1,12

012

1,54

931

2,66

919

%1,

724,

758

231,

676

121,

549

353,

225

20%

Num

ber

of m

icro

loan

s di

sbur

sed

to w

omen

826,

138

80,8

3071

,406

152,

236

18%

864,

193

80,8

3071

,406

152,

236

18%

Num

ber

of c

redi

t rep

orts

so

ld b

y cr

edit

bure

au32

,000

02,

228,

869

2,22

8,86

969

65%

32,0

000

2,22

8,86

92,

228,

869

6965

%

Num

ber

of d

epos

it ac

-co

unts

ope

ned

(per

sona

l ac

cts)

54,0

9732

,304

20,0

7552

,379

97%

61,8

2447

,533

20,0

7567

,608

109%

Num

ber

of d

epos

it ac

-co

unts

ope

ned

(per

sona

l ac

cts)

by

wom

en23

,944

-

6,21

46,

214

26%

29,2

080

6,21

46,

214

21%

Impr

oved

in

vest

men

t cl

imat

e

Num

ber

of b

usin

esse

s co

mpl

etin

g ne

w/r

efor

med

pr

oced

ure

in a

giv

en

juris

tictio

n

32,1

765,

688

54,9

1760

,605

188%

32,1

7610

,587

54,9

1765

,504

204%

Num

ber

of b

usin

esse

s co

mpl

etin

g a

new

/ref

orm

ed

proc

edur

e in

a g

iven

juris

-di

ctio

n, o

f whi

ch w

omen

-ow

ned

3,25

30

00

0%3,

253

00

00%

Num

ber

of c

ases

suc

cess

-fu

lly s

ettle

d th

roug

h A

DR

220

727

072

733

0%59

21,

981

01,

981

335%

Num

ber

of c

ases

suc

cess

-fu

lly s

ettle

d th

roug

h A

DR

in

volv

ing

wom

en45

300

3067

%12

058

058

48%

Val

ue o

f fun

ds r

elea

sed

thro

ugh

AD

R (

US

$)31

,245

,000

123,

146,

141

012

3,14

6,14

139

4%71

,525

,000

176,

716,

550

017

6,71

6,55

024

7%

Val

ue o

f fun

ds r

elea

sed

thro

ugh

AD

R to

wom

en

(US

$)6,

463,

000

831,

100

083

1,10

013

%14

,653

,000

1,06

6,27

50

1,06

6,27

57%

65ANNEX B: FISCAL YEAR 2012 RESULTS AND TARGETS

Impr

oved

in

vest

men

t cl

imat

e

Num

ber

of n

ew la

ws/

regu

-la

tions

/am

endm

ents

/cod

es

draf

ted

or c

ontr

ibut

ing

to

the

draf

ting

(al

l BLs

)

208

08

40%

289

09

32%

Num

ber

of r

ecom

men

ded

law

s/re

gula

tions

/am

end-

men

ts/c

odes

ena

cted

(al

l B

Ls)

165

16

38%

209

110

50%

Num

ber

of p

roce

dure

s/po

l-ic

ies/

prac

tices

/sta

ndar

ds

that

wer

e pr

opos

ed fo

r im

prov

emen

t or

elim

inat

ion

(All

BLs

)

126

256

4530

123

9%15

325

945

304

199%

Num

ber

of p

roce

dure

s/po

licie

s/pr

actic

es/s

tan-

dard

s th

at w

ere

impr

oved

/el

imin

ated

(A

ll B

Ls)

105

135

4918

417

5%12

215

049

199

163%

Indu

stry

: Num

ber

of in

ves-

tor

inqu

iries

in ta

rget

ed

sect

ors

9 -

-

0

0%15

660

6644

0%

Sus

tain

able

B

usin

ess

Adv

isor

y

Num

ber

of p

artic

ipan

ts

in w

orks

hops

, tra

inin

g ev

ents

, sem

inar

s an

d co

nfer

ence

s (

all B

Ls)

6,64

16,

797

696,

866

103%

10,8

3413

,615

6913

,684

126%

Num

ber

of w

omen

par

tici-

pant

s in

wor

ksho

ps, t

rain

-in

g ev

ents

, sem

inar

s an

d co

nfer

ence

s (A

ll B

Ls)

1,31

01,

672

51,

677

128%

2,17

43,

370

53,

375

155%

Num

ber

of in

divi

dual

s tr

aine

d by

pro

ject

trai

ned

peop

le/in

stitu

tions

7,00

87,

360

07,

360

105%

11,4

0813

,597

013

,597

119%


FY

12F

Y11

-12

Ou

tpu

tIn

dic

ato

r T

arg

etR

esu

ltR

atio

of

ach

ieve

-m

ent

Tar

get

to

d

ate

Res

ult

s to

dat

eR

atio

of

ach

ieve

-m

ent

Po

rtfo

lioP

ost

-Im

pTo

tal

Po

rtfo

lioP

ost

-Im

pTo

tal

Sus

tain

able

B

usin

ess

Adv

isor

y

Num

ber

of w

omen

trai

ned

by p

roje

ct tr

aine

d pe

ople

/in

stitu

tions

1,29

61,

573

01,

573

121%

2,04

93,

350

03,

350

164%

Num

ber

of S

ME

s/F

arm

ers

rece

ivin

g ca

paci

ty b

uild

ing

supp

ort

(all

BLs

)1,

768

1,81

00

1,81

010

2%2,

292

3,06

30

3,06

313

4%

GH

G e

mis

sion

s ex

pect

ed

to b

e av

oide

d (in

met

ric

ton/

year

) (a

ll B

Ls)

4,00

010

,896

1,39

712

,293

307%

4,00

010

,896

1,39

712

,293

307%

Incr

ease

d in

vest

men

t in

infr

astr

uctu

re

Num

ber

of r

epor

ts (

as-

sess

men

ts, s

urve

ys,

man

uals

, Str

ateg

ic O

ptio

ns

Rep

orts

) co

mpl

eted

300

00

0%52

70

713

%

Num

ber

of r

epor

ts a

c-ce

pted

by

clie

nt8

20

224

%15

60

641

%

Num

ber

of a

dvis

ory

man

-da

tes

sign

ed (

betw

een

IFC

an

d G

over

nmen

t)

51

01

20%

105

05

50%

67ANNEX C:TARGETS: FISCAL YEARS 2011-2017

Ou

tco

me

Ind

icat

or

Targ

ets

Targ

ets:

3 y

ears

po

st f

un

din

g

cycl

eTo

tal

FY

11F

Y12

FY

13F

Y14

FY

15F

Y16

FY

17

Incr

ease

d ac

cess

to

finan

ceV

alue

of M

icro

loan

s di

sbur

sed

(US

$)65

,747

,731

558,

948,

960

996,

819,

270

1,16

8,96

8,95

31,

294,

331,

133

234,

856,

696

166,

582,

000

4,48

6,25

4,74

2

Val

ue o

f SM

E lo

ans

disb

urse

d (U

S$)

128,

993,

001

164,

477,

720

215,

384,

001

295,

937,

860

382,

489,

216

108,

933,

329

96,5

00,0

001,

420,

926,

950

Impr

oved

inve

stm

ent

clim

ate

Est

imat

ed v

alue

of a

ggre

gate

pr

ivat

e se

ctor

sav

ings

(U

S$)

from

re

com

men

ded

chan

ges

38,4

49,8

7021

,750

,949

25,4

51,2

9927

,721

,353

52,2

89,3

5052

,941

,095

51,4

82,1

0127

6,88

6,01

8

Sus

tain

ble

Bus

ines

s A

dvis

ory

Num

ber

of e

ntiti

es r

epor

ting

im-

prov

ed p

erfo

rman

ce (

e.g.

, im

prov

e-m

ents

in p

rodu

ctiv

ity, o

pera

tions

, lo

an te

rms,

val

uatio

ns)

4453

360

280

177

845

418

43,

726

Incr

ease

d in

vest

men

t in

infr

astr

uctu

reV

alue

of fi

nanc

ing

faci

litat

ed (

US

$)

(fro

m a

gree

d co

ntra

ct -

not

act

ual

inve

stm

ent t

o da

te)

800,

000,

000

190,

800,

000

532,

800,

000

532,

800,

000

2,05

6,40

0,00

0

Ou

tpu

tIn

dic

ato

rTa

rget

sTa

rget

s: 3

yea

rs p

ost

fu

nd

ing

cy

cle

Tota

l

FY

11F

Y12

FY

13F

Y14

FY

15F

Y16

FY

17

Incr

ease

d ac

cess

to

finan

ce

Num

ber

of S

ME

loan

s di

sbur

sed

1,79

43,

296

4,11

85,

740

8,73

87,

096

2,72

034

,607

Num

ber

of M

icro

loan

s di

sbur

sed

88,3

091,

636,

450

2,34

9,13

92,

589,

717

2,80

3,08

91,

014,

438

798,

627

11,2

79,7

68

Num

ber

of m

icro

loan

s di

sbur

sed

to

wom

en (

of w

hich

wom

en)

38,0

5582

6,13

81,

255,

200

1,37

6,35

41,

481,

080

671,

146

554,

244

6,20

2,21

6

Num

ber

of c

redi

t rep

orts

sol

d by

cr

edit

bure

au0

32,0

0048

,000

80,0

0016

8,00

088

,000

101,

200

517,

200

Num

ber

of d

epos

it ac

coun

ts o

pene

d (p

erso

nal a

ccts

)7,

727

54,0

9772

,273

71,4

0274

,326

32,6

880

312,

513

Num

ber

of d

epos

it ac

coun

ts o

pene

d (p

erso

nal a

ccts

) by

wom

en (

of

whi

ch w

omen

)5,

264

23,9

4430

,734

27,5

3825

,364

10,5

910

123,

435

Ann

ex C

Targ

ets:

Fis

calY

ears

201

1-20

17


Ou

tpu

tIn

dic

ato

rTa

rget

sTa

rget

s: 3

yea

rs p

ost

fu

nd

ing

cy

cle

Tota

l

FY

11F

Y12

FY

13F

Y14

FY

15F

Y16

FY

17

Impr

oved

inve

stm

ent

clim

ate

Num

ber

of B

usin

esse

s co

mpl

etin

g ne

w/r

efor

med

pro

cedu

re in

a g

iven

ju

ristic

tion

032

,176

8,79

318

,424

29,7

9631

,768

35,2

2415

6,18

1

Num

ber

of b

usin

esse

s co

mpl

etin

g a

new

/ref

orm

ed p

roce

dure

in a

giv

en

juris

dict

ion,

of w

hich

wom

en-o

wne

d0

3,25

387

82,

142

3,63

63,

802

4,21

617

,926

Num

ber

of c

ases

suc

cess

fully

se

ttled

thro

ugh

AD

R37

222

024

026

026

426

426

41,

951

Num

ber

of c

ases

suc

cess

fully

set

-tle

d th

roug

h A

DR

invo

lvin

g w

omen

7545

5054

5454

5440

0

Val

ue o

f fun

ds r

elea

sed

thro

ugh

AD

R (

US

$)40

,280

,000

31,2

45,0

0037

,550

,000

43,8

55,0

0044

,020

,000

44,0

20,0

0044

,020

,000

319,

990,

000

Val

ue o

f fun

ds r

elea

sed

thro

ugh

AD

R to

wom

en (

US

$)8,

190,

000

6,46

3,00

07,

938,

000

9,19

9,00

09,

232,

000

9,23

2,00

09,

232,

000

59,4

86,0

00

Num

ber

of n

ew la

ws/

regu

latio

ns/

amen

dmen

ts/c

odes

dra

fted

or c

on-

trib

utin

g to

the

draf

ting

(al

l BLs

)8

2022

1376

Num

ber

of r

ecom

men

ded

law

s/re

gula

tions

/am

endm

ents

/cod

es

enac

ted

(all

BLs

)4

1614

1352

Num

ber

of p

roce

dure

s/po

licie

s/pr

ac-

tices

/sta

ndar

ds th

at w

ere

prop

osed

fo

r im

prov

emen

t or

elim

inat

ion

(All

BLs

)

2712

688

6430

8

Num

ber

of p

roce

dure

s/po

licie

s/pr

ac-

tices

/sta

ndar

ds th

at w

ere

impr

oved

/el

imin

ated

(A

ll B

Ls)

1710

567

4924

0

Indu

stry

: Num

ber

of in

vest

or in

qui-

ries

in ta

rget

ed s

ecto

rs

69

2428

2932

3516

3

69ANNEX C:TARGETS: FISCAL YEARS 2011-2017

Sus

tain

able

Bus

ines

s A

dvis

ory

Num

ber

of p

artic

ipan

ts in

wor

k-sh

ops,

trai

ning

eve

nts,

sem

inar

s an

d co

nfer

ence

s (

all B

Ls)

4,19

46,

641

4,58

63,

975

23,3

84

Num

ber

of w

omen

par

ticip

ants

in

wor

ksho

ps, t

rain

ing

even

ts, s

emi-

nars

and

con

fere

nces

(A

ll B

Ls)

863

1,31

089

783

64,

584

Num

ber

of in

divi

dual

s tr

aine

d by

pr

ojec

t tra

ined

peo

ple/

inst

itutio

ns4,

400

7,00

87,

660

8,65

65,

256

2,45

61,

924

41,1

95

Num

ber

of w

omen

trai

ned

by p

roje

ct

trai

ned

peop

le/in

stitu

tions

753

1,29

61,

284

1,63

81,

051

403

319

7,85

8

Num

ber

of S

ME

s/F

arm

ers

rece

ivin

g ca

paci

ty b

uild

ing

supp

ort

(all

BLs

)52

41,

768

1,38

01,

420

1,00

024

020

07,

535

GH

G e

mis

sion

s ex

pect

ed to

be

avoi

ded

(in m

etric

ton/

year

) (a

ll B

Ls)

04,

000

20,0

0013

9,46

816

3,20

229

0,93

533

8,66

995

6,27

4

Incr

ease

d in

vest

men

t in

infr

astr

uctu

re

Num

ber

of r

epor

ts (

asse

ssm

ents

, su

rvey

s, m

anua

ls, S

trat

egic

Opt

ions

R

epor

ts)

com

plet

ed

2230

2222

105

Num

ber

of r

epor

ts a

ccep

ted

by

clie

nt6

86

633

Num

ber

of a

dvis

ory

man

date

s si

gned

(be

twee

n IF

C a

nd G

over

n-m

ent)

5

55

528

IFC.9 12

Contact Information

IFC Middle East and North Africa

Nile City Towers, North Tower,

24th floor 2005C, Corniche El Nil,

Ramlet Boula

T:24619132/246191 34F:24619130

ifc.org

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t Ri

ght

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.

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