WASHINGTON, D.C., October 20, 1998 ---The International Finance Corporation has teamed up with PROPARCO, the private sector lending arm of the French development agency (Agence Francaise de Developpement or AFD), to stimulate investment in smaller businesses in sub-Saharan Africa through a US$20 million co-investment agency agreement.
Under this agreement, PROPARCO will become the agent of IFC, responsible for identifying, appraising, closing, and supervising IFC’s investments in selected sub-Saharan countries for an aggregate amount of up to US$20 million equivalent. PROPARCO will also match each IFC investment with an investment of its own under terms similar to those of IFC.
The agreement provides for senior and subordinated loans to finance small and medium enterprises (SMEs) and smaller projects in some 20 sub-Saharan African countries where IFC has limited presence. SMEs have a vital role in economic and social development in sub-Saharan Africa by generating employment, creating an indigenous middle class, and fostering innovation and social stability.
The AFD Group has an extensive network of field offices in sub-Saharan Africa, sound knowledge of local conditions and markets, and successful experience in financing private enterprises in Africa. Through the agency agreement, IFC will be able to extend its reach and complement its existing investment activities. For its part, PROPARCO will benefit from IFC’s experience in building high environmental standards into its investment projects. The IFC-PROPARCO partnership will lead to joint loan agreements between IFC-PROPARCO and African borrowers.
The agreement was signed during the recent World Bank/IMF Annual Meetings by Managing Director of AFD and President of PROPARCO, Antoine Pouillieute, and Director of IFC’s Africa Department, Cesare Calari. Also present at the signing were French Minister of Finance Dominique Strauss-Kahn, French Minister of Cooperation Charles Josselin, and World Bank Group President James Wolfensohn.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
