Washington DC, November 5, 2001
—Peter Woicke, Head of the International Finance Corporation (IFC) and Managing Director of the World Bank Group, will visit Mexico City on November 6 and 7 to meet representatives of the Mexican government and business community in order to reaffirm IFC’s continued commitment to private sector development in Mexico.
IFC, the private sector arm of the World Bank Group, has worked actively to support the development of a strong and vibrant private sector in Mexico since it became a member in 1956. Since then and as of June 30, 2001, IFC has committed financing in Mexico for 104 projects representing a total project cost of US$12.2 billion, with IFC providing $4.2 billion — $2.3 billion for IFC’s own account, and $1.9 billion for the account of participant banks. As of September 2001, Mexico is IFC’s third largest country portfolio with 64 projects (49 companies) representing $730 million. The outstanding loan for participant banks stood at $451 million.
During his visit, Peter Woicke will meet with the President of Mexico Vicente Fox, as well as with Central Bank Director Guillermo Ortíz, Secretary of Economy Luis Ernesto Derbéz, Secretary of Finance Francisco Gil Díaz and Secretary of Energy, Ernesto Martens, to exchange views on how IFC can help Mexico reach its development goals. Mr. Woicke will also meet IFC clients and members of the Mexican business community to exchange ideas on how IFC can support their further development.
In the last few years, IFC has focused on helping the Mexican private sector gain greater access to external private financing, supported the development of domestic financial markets and helped private firms grow and improve their international competitiveness.
A few examples include the $200 million credit facility - $100 million for IFC’s own account- to
Banorte
to finance long-term leases of industrial facilities for export-oriented firms in the northern states of Mexico;
Hipotecaria Su Casita
, a $11 million investment that will help make housing finance available to low-income Mexican families, with a possibility of a further $2.4 million investment;
Financiera Compartamos
, a $1.66 million investment that will help expand the reach of this leading microfinance institution beyond its existing 82,000 borrowers, mostly women, in 12 states of Mexico, including Chiapas and Oaxaca.
Other IFC priorities include support for competitive firms that lack access to long-term credit as well as finance for agribusiness and private infrastructure, such as railways, water and sanitation. Gas distribution and power are also priority investment targets in the future.
IFC’s strategy also emphasizes support for sectors recently opened to further private participation, including health and education. One example is IFC’s recent $44 million investment in
Hospital ABC
(including $14 million for participations) to help build a new hospital in Santa Fe, Mexico City.
The Corporation has broadened and expanded its approach to development through the Sustainability Initiative. This initiative looks to increasing the environmental and social benefits of investments. A clear example is
Ecomex
, a Mexican company recently supported by IFC, which converts vehicles in the metropolitan area of Mexico City to the use of compressed natural gas, a cleaner, more environmentally friendly fuel. Ecomex has already converted more than 800 microbuses to natural gas, and IFC’s $6.5 million investment (with a possibility of an additional $3.5 million investment) will help them expand to convert taxis, buses and official vehicles.
The US economic slowdown, aggravated by the tragic events of September 11, is expected to weaken the flow of private capital to emerging markets in Latin America. Investors are more cautious, and this situation might create a potential negative effect in the ability of the Mexican private sector to continue its modernization and maintain its competitiveness. IFC is preparing to respond to a surging demand for financing. The Corporation will help address the needs of the Mexican private sector to come to terms with the new reality of slower private capital flows, and will support competitive companies that play a major role in the Mexican economy.
IFC's mission (
www.ifc.org
) 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 $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC's committed portfolio at the end of FY01 was $14.3 billion.
