WASHINGTON, D.C., April 28 -- The International Finance Corporation (IFC) has approved an equity investment of up to US$50 million in a fund that will invest in private sector power projects in developing countries worldwide. IFC estimates that over the next ten years, power needs in developing economies will be about US$100 billion a year. Of this amount, US$25 billion is likely to be raised by public sector sources and another US$25 billion by private investors, leaving a gap of US$50 billion annually. Everett J. Santos, Director of IFC's Infrastructure Department, noted that "Investment in private sector power projects in developing economies is relatively new. Sector funds are increasingly being seen as an important source of funding for infrastructure projects in developing countries and can fill part of the financing requirements in this growing sector. By initiating the concept, IFC is helping to create the first specialized global capital markets vehicle to mobilize much-needed mezzanine (equity and q
uasi-equity) financing for the construction and operation of private power projects." General Electric Capital Corporation and Quantum Industrial Holdings (a new fund advised by Soros Fund Management) are also participating and will each make equity investments of up to US$200 million in the fund. IFC is the private sector arm of the World Bank Group and is the largest source of multilateral financing for private sector projects in developing countries. During fiscal 1993, IFC approved financing amounting to US$438 million for power projects, the total cost of which were US$1.8 billion. (30)
