HANOI, VIETNAM, Oct. 29,-The International Finance Corporation (IFC) announced in Hanoi today that it would shortly launch the Mekong Project Development Facility (MPDF). The MPDF is a regional facility managed by the IFC and funded by a number of donor agencies, which will assist in the promotion of small and medium-sized businesses in Vietnam, Lao P.D.R., and Cambodia (a prospective IFC member). The announcement was made by Mr. Jannik Lindbaek, IFC's Executive Vice President, during his first official visit to Vietnam.
The MPDF will assist small-and medium-sized enterprises (SMEs) prepare business plans and projects suitable for medium and long-term financing. It will also seek to provide technical assistance and training to companies, financial institutions, and local consulting firms, particularly with respect to project analysis and financing. The MPDF will leverage its resources by coordinating closely with existing business associations and other donor-assisted private sector programs, including those of the World Bank.
IFC will manage the MPDF and contribute US$4 million to its five-year, US$25 million budget. Several countries and bilateral donors will provide the balance of the funds. IFC will also extend US$5 million in seed capital for project finance to SMEs through the Mekong Financing Line to help mobilize additional capital and complement the facility's technical assistance in strengthening local private sectors. Investments will range from US$250,000 to US$1 million with the average expected to be approximately US$500,000.
Donor governments funding the MPDF include Australia, Norway, Sweden and Switzerland. Representatives of the Governments of Australia, Norway, Sweden and Switzerland are expected to sign an agreement confirming their participation in Hanoi tomorrow. Finland, the European Union, Canada, Japan, and the Netherlands are also actively considering their participation.
Mr. Lindbaek said, "I would like to extend our thanks to the donor governments, without whose support this initiative would not have been possible."
Mr. Lindbaek added, "IFC has structured the MPDF by drawing on lessons learned from managing similar initiatives in other parts of the world, especially in Africa and the South Pacific. The MPDF will broaden its developmental impact through well-targeted training programs and industry seminars, which will focus on local banks, accounting firms, and consultants who provide critical services to SMEs. By assisting these local service companies, the MPDF will help to build a more supportive environment for local private sector firms. It is important to note that MPDF is a regional initiative. Although its first office will be in Hanoi, other offices may also be opened in Ho Chi Minh City; Pnomh Penh, Cambodia; and Vientiane, Lao P.D.R."
IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
