Washington D.C., January 29, 2003
—The International Finance Corporation (IFC), the private sector development arm of the World Bank group, has signed an agreement with the government of the Federal Republic of Germany, on January 28, to establish a Euros 1.5 million trust fund to help develop private sector investment projects in developing countries.
The trust fund, which primarily focuses on technical assistance, will help fund several key aspects of private sector development, such as: pre- feasibility studies, the establishment of pilot projects, technology transfer, and technical advisory services in the field of privatization. The fund, to be funded by Germany’s Federal Ministry of Economics and Labor will seek to utilize East German technical expertise in the technical assistance projects.
“The establishment of this trust fund reflects Germany’s continued efforts to support private sector development in emerging markets and the developing world,” said Assaad Jabre, Vice President of Investments for IFC, who signed the agreement in Berlin. “The private sector is a key engine of economic growth and sustainable job-creation. A vibrant private sector increases a nation’s prosperity and reduces poverty,” added Jabre.
Signing on behalf of the Federal Republic of Germany, Dr. Alfred Tacke, Secretary of State in the Federal Ministry of Economics and Labor said: “We see this trust fund as a decisive step in getting the EastGerman private sector more involved with World Bank Group projects. East German expertise is underutilized in international economic development, and we hope to introduce the considerable expertise we have in East Germany to the international development community.”
Germany is historically playing an important role in promoting economic development. It is taking an active part in multilateral and bilateral aid programs and supports projects all over the world. It pays particular attention to public-private-partnership projects – as in this case, to take full advantage of the comparative advantages of private enterprise.
IFC initiated the Technical Assistance Trust Funds Program in 1988 in an effort to identify and support viable business projects in developing countries at an early stage. Among other forms of technical assistance, the program provides technical assistance to help entrepreneurs prepare projects and design proposals that meet the criteria of prospective investors, including IFC. Since its inception, the program has supported up to 1000 technical assistance projects in a broad range of sectors. It also supports some of IFC’s privatization advisory services and capital markets activities aimed at strengthening private sector institutions.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC’s committed portfolio at the end of FY02 was $15.1 billion, with an additional $6.5 billion held for participants in loan syndications.
