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IFC Reaches Record Investment Volumes in Africa in FY09, Maximizes Impact in Poorest Regions

Johannesburg, South Africa, August 19, 2009 —IFC, a member of the World Bank Group, announced today that it committed $1.8 billion worth of new investments across 30 countries in Africa in the fiscal year ended June, its largest volume in any single year since its founding in 1956, as it rapidly increased activities to alleviate the impact of the global financial crisis on Africa’s poorest regions.
IFC’s investments represented a 32 percent increase over the $1.4 billion in commitments recorded a year earlier. IFC also delivered $26.1 million worth of advisory services, up from $18.6 million a year ago, as it expanded activities to have more impact in countries affected by conflict and where the private sector is at the very early stages of development.
“IFC is increasing its activities where it is needed the most, building a base for sustainable economic growth and increasing opportunities for people to improve their lives,” said Jean Philippe Prosper, IFC Director for Eastern and Southern Africa. “IFC stepped up financing and advisory services amid the turmoil in global financial markets to encourage African trade and investment flows and alleviate the impact of the global economic slowdown on the Africa’s most vulnerable.”
IFC announced in May that it is teamingup with other international financial institutions to mobilize at least $15 billion over the next two to three years to lessen the impact of the global financial turmoil on Africa. IFC will contribute at least $1 billion to promote trade, strengthen the capital base of banks and promote microfinance lending, and increase lending for infrastructure projects and other real sectors of the economy experiencing a shortfall in liquidity.
IFC continued to extend its regional reach in Africa to countries where it has traditionally been less active. IFC last year committed its first investment in Sao Tome and Principe, which became an IFC member state in October 2008, and opened new offices in the Central African Republic and Ethiopia.
IFC’s strategy in Africa is based on three main components: improving the investment climate, enhancing support to small and medium enterprises, and developing new projects to support investments. IFC is also focusing on building infrastructure, advancing health care, developing agribusiness, reforming the investment climate, and promoting the recovery of countries affected by conflict.
IFC committed investments in the following African countries last year: Angola, Benin, Burkina Faso, Burundi, Cameroon, Chad, Cote d’Ivoire, Democratic Republic of Congo, Ethiopia, Gambia, Ghana, Kenya, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, Sao Tome and Principe, South Africa, Tanzania, Togo, Uganda, and Zambia.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $15 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit .
Notable Transactions in FY09
  • IFC invested $18 million to help Green Resources plant 8,000 hectares of new forest in Tanzania, implement international environmental and social standards, and increase productivity and energy efficiency. Green Resources will generate carbon credits from its operations, which it will sell directly to buyers from developed countries.
  • Together with the African Development Bank, the Bill & Melinda Gates Foundation, and the German development finance institution DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH, IFC created a new private equity fund that will invest in Africa’s health sector. The fund reached a first closing of $57 million to invest in small- and medium-sized companies, such as health clinics and diagnostic centers, to help low-income Africans gain access to affordable, high-quality health services. It will target total commitments between $100 to $120 million.
  • To strengthen Africa’s banking sector and increase lending to small and medium enterprises that have difficulty accessing credit, IFC provided a financing package of over $200 million to Ecobank Transnational Inc., a pan-African bank with a network of over 500 branches in 27 countries. The financing will support the bank’s expansion, promote lending to micro and smaller, and facilitate trade flows to the region by guaranteeing the underlying trade transactions of Ecobank subsidiaries in Benin, Burkina Faso, Côte d’Ivoire, Ghana, Mali, Niger, Nigeria, Senegal, and Togo.
  • IFC provided a $30 million guarantee facility to Stanbic Bank Ghana to help it increase financing to companies that purchase cocoa from small farmers in Ghana. The transaction illustrates how IFC's agribusiness program in Africa is reaching small farmers through local financial intermediaries.
  • IFC invested in Sao Tome and Principe for the first time by providing a trade finance line of $1 million to Banco Internacional de Sao Tome e Principe. The bank utilized $0.68 million of the line last fiscal year.
  • IFC invested in the development of an offshore oil and gas project that will help diversify Ghana’s economy, meet domestic power demand, and generate revenue to support the country’s economic growth and development. IFC will provide a loan of $100 million to Kosmos Energy , one of the key partners developing Ghana’s Jubilee field, located in deep water some 60 kilometers off the coast of Ghana. IFC’s loan is part of a $750 million debt package for U.S.-based Kosmos that IFC helped mobilize, primarily from commercial banks. IFC also signed a $115 million loan agreement with British Tullow Oil , another key Jubilee partner, bringing IFC’s support for the project to $215 million. Kosmos and Tullow are independent oil and gas exploration and production companies.
  • In Uganda, IFC signed its first risk sharing facility involving small and medium enterprises in the telecommunications sector. This project enables distributors of Zain products and services access to medium term financing through Stanbic Bank Uganda . It is coupled with a capacity building program for Zain dealers to upgrade their business practices and reduce their risk profile. IFC expects to see more projects of this nature in other parts of Africa.
  • IFC invested in Faulu Kenya to help the microfinance institution broaden its products and services to reach more Kenyans, helping build a more inclusive financial sector and contributing to the development of a vibrant private sector. In May 2009, Faulu became the first microfinance institution in Kenya to receive a license from the Central Bank of Kenya to accept deposits. IFC will provide a partial credit guarantee for 80 percent of a 450 million Kenyan shilling loan from Standard Chartered Bank to Faulu. IFC will also provide advisory support to facilitate Faulu’s transformation to a deposit taking institution.
  • IFC provided $100 million in financing as part of a $400 million package to support Standard Bank ’s trade-related lending in Africa. The transaction was part of IFC’s Global Trade Liquidity Program, which is expected to support up to $50 billion in trade in emerging markets and have a significant impact in  Africa, where supporting continued access to finance is one of IFC’s priorities.
  • IFC provided $7 million to help Dac Aviation help ensure transport of goods across Africa related to humanitarian relief. The financing will help Dac purchase new aircraft and improve maintenance standards for its operations serving aid and relief organizations active today in Democratic Republic of Congo and Sudan.