Nairobi, Kenya, August 16, 2011—
IFC, a member of the World Bank Group, today announced its results for the fiscal year ending June 30, 2011, demonstrating robust volume and reach of investments and advisory services. IFC’s strong business and development results extended across sub-Saharan Africa, supporting regional growth despite turbulence in the global economy. During the previous calendar year, IFC’s activities:
• Generated power for an additional 6.6 million people
• Connected about 59 million telephone users
• Supported nearly 500,000 students.
• Provided loans to 241,000 small businesses and 261,000 farmers
• Created about 217,000 jobs
IFC’s new investments in the whole of sub-Saharan Africa totaled $2.2 billion and reached 31 countries. Of the 95 new investments made during the last fiscal year, 87 were in the world’s lowest income economies, where IFC’s development impact is especially pronounced. IFC also mobilized an additional $589 million from other investors.
IFC advisory services was active in 31 countries in Africa, with 133 projects valued at $189 million through June 2011. Of these projects, 121 were active in the region’s lowest income economies. IFC expanded initiatives to support the growth and development of the private sector in economies affected by conflicts, especially South Sudan and Liberia.
Yolande Duhem, IFC Director for West and Central Africa, said, “IFC made significant progress in supporting Africa’s development last year. Our investments in West and Central Africa and other parts of the continent grew, we saw important reforms to improve the investment climate in the region, innovative projects in priority sectors, and we have a large portfolio of investment and advisory projects that are improving people’s lives through better services and opportunities.”
Jean Philippe Prosper, IFC Director for Eastern and Southern Africa, said, "Our increasing activities in Africa reflect IFC’s commitment to mobilize resources for entrepreneurial activity and projects driving forward the region’s private sector. IFC’s investments and advisory services are creating jobs, improving infrastructure, securing access to finance for small and medium enterprises, and raising health, education and living standards for Africans.”
West and Central Africa
In West and Central Africa, IFC provided $1.3 billion in new financing commitments, an 8.5 percent increase over last year. IFC supported private sector involvement in novel infrastructure projects, such as the Dakar Toll Road, which will improve transport and trade in Senegal. The road is being built on concession, the first experience of its kind on the continent, outside of South Africa.
In other projects in Senegal, IFC invested in two microfinance institutions and launched a rural electrification project in collaboration with Comasel Louga.
In Ghana, IFC made a push into the telecoms sector by supporting Vodafone Ghana in its expansion program. Vodafone will provide affordable, reliable mobile phone services to previously underserved areas of the country. IFC’s investments in agribusiness included the fast-food restaurant chain, Food Concepts in Nigeria, who aim to integrate SMEs into the food supply chain in West Africa. As the political climate stabilizes in Cote d’Ivoire, IFC was quick to re-engage in the country with an investment in microfinance bank, Advans.
In terms of advisory services, IFC worked on improving leasing laws in in Liberia and Sierra Leone and undertook activities to improve investment climate in Mali, Burkina Faso and the Central African Republic. In Chad, IFC launched a Village Phone Program in Chad that will bring phones to rural communities.
Through the Investment Climate Advisory Services of the World Bank Group, IFC supported the effort by 16 West African countries to change their common business legislation to significantly improve their business climate. The OHADA project addresses two of the top constraints to enterprise development and investment in Africa: access to finance and the quality of the legal framework. The reforms achieved have removed some of the main legal constraints to entrepreneurship and access to credit in the region and will help countries become more attractive to investors. The project is one of the first of this size and duration that works with a regional organization rather than an individual country government.
IFC continued to promote public-private partnerships, notably, through an advisory services mandate with the government of Benin in the tender for a new public hospital, replicating a former IFC project in Lesotho. IFC and donors also renewed the advisory program for private sector development in Liberia.
IFC maintained a leading role in developing the region’s financial sector, providing both investment and targeted advisory services to a number of banks in the region. In Nigeria, IFC’s engagement helped banks recover from the banking and financial crisis. IFC’s activities in the banking sector spanned several more countries in West Africa, such as: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Cote d’Ivoire, Gambia, Ghana, Liberia, Mali, Mauritania, Niger, Nigeria, Sao Tome and Principe, and Togo.
Eastern and Southern Africa
Fiscal year 2011 marked the highest investment volume ever recorded by IFC for East Africa. IFC’s new investments totaled $327 million in 29 projects in the East African Community countries. IFC supported 26 active advisory services projects the five countries as of June 30. IFC committed new investments of $247 million in 16 projects in Southern Africa. IFC had 11 active Advisory Services projects in the sub-region at the end of the fiscal year supporting activities ranging from climate change initiatives to increased access to finance and basic services.
IFC supported South Sudan’s transition to independence, working with the country’s public and private sectors to improve the investment climate and attract investment. IFC’s Advisory Services contributed to a new leasing industry in Rwanda, where IFC also has an active investment climate program.
For many farmers in developing countries, access to credit is a major constraint. In Ethiopia, IFC has established a partnership with Ethiopia Commodity Exchange and commercial banks to develop a program to help coffee producers improve access to finance through the use of commodity warehouse receipts.
IFC supported infrastructure and South-South investments through Magerwa in Rwanda, a trade logistics company with Singaporean owners. IFC also supported local currency finance in the region. In Rwanda, for example, IFC provided local currency financing through swaps facilitated through the Central Bank. IFC provided financing for telecom operator Leo Burundi, which will expand mobile telephone service in a country that is presently poorly served. IFC’s Climate Change Investment Program helped South Africa’s Karsten Farms, a grape producer, increase energy efficiency.
IFC supported infrastructure and South-South investments through Magerwa in Rwanda, a trade logistics company with Singaporean owners. IFC also supported local currency finance in the region. In Rwanda, for example, IFC provided local currency financing through swaps facilitated through the Central Bank. IFC provided financing for telecom operator Leo Burundi, which will expand mobile telephone service in a country that is presently poorly served. IFC’s Climate Change Investment Program helped South Africa’s Karsten Farms, a grape producer, increase energy efficiency.
IFC maintained a leading role in developing the region’s financial sector, partnering with a number of banks, including Mercantile Bank in South Africa and Kenya Commercial Bank (KCB), which has subsidiaries in Uganda, Rwanda and Tanzania. IFC's loan to KCB will also be channeled to South Sudan, where KCB is currently the largest bank, with 20 branches nation-wide.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion, including mobilzations. For more information, visit
www.ifc.org
.
IFC Fiscal Year 2011 Highlights
West and Central Africa
· IFC provided €22.5 million long-term debt facilities for the Dakar Toll Roadproject. The road will run 25 kilometers from Diamniadio to Dakar, creating a new and efficient gateway to the country’s capital and economic center. Economists estimate that poor road infrastructure costs Senegal about 4.6 percent of its annual gross domestic product. To improve transport infrastructure, IFC and the World Bank, in partnership with Senegal’s government and Eiffage, a construction company, created a public-private partnership to build a landmark toll road connecting Dakar to other parts of the country.
· IFC, through the Investment Climate Advisory Services of the World Bank Group, supported the effort by 16 West African countries to change their common business legislation to significantly improve their business climate. The OHADA projectaddresses two of the top constraints to enterprise development and investment in Africa: access to finance and the quality of the legal framework. The reforms achieved have removed some of the main legal constraints to entrepreneurship and access to credit in the region and will help countries become more attractive to investors. Improving the investment climate is a high strategic priority for IFC in the region. The project is one of the first of this size and duration that works with a regional organization rather than an individual country government, and for the first time resulted in the reform of an existing OHADA Law.
· As Cote d’Ivoire rebuilds its economy following political strife, IFC was one of the first multilateral organizations to re-engage in the country. IFC provided an equity investment of $1 million in Advans Cote d’Ivoire, a microfinance institution that will provide quality financial services to entrepreneurs and small businesses. Earlier in the fiscal year, IFC had also provided a local currency loan equivalent of $1.1 million to Advans Ghana. The investments in Advans are part of IFC’s strategy to support SME growth through microfinance institutions that boost lending to entrepreneurs and create employment opportunities.
· IFC signed a ground-breaking health Public-Private Partnershipmandate with the government of Benin to advise in the tender for a new 200-plus bed public hospital to be designed, built and managed by a private operator for the government. The new hospital will be located in the country’s largest city of Cotonou. It aims to provide access to services for 250,000 patients and mobilization of investment of $50-85 million.
· IFC mobilized financing from a consortium of international banks extending $115 million financing to Vodafone Ghanato improve mobile phone coverage and network quality. Vodafone will expand its network to previously underserved areas in Ghana, providing access to affordable telecom services. During the last 10 years, IFC has invested over $1.2 billion in 42 mobile phone projects spanning 15 countries in Africa.
· In Sierra Leone, IFC was the lead transaction advisor for the privatization of the Cape Sierra Hotel,bringing added value to the tourism investment promotion program. Recognizing the difficulty of carrying out public-private partnerships and privatizations even in mature markets, IFC’s Conflict Affected States in Africa program helped our PPP Advisory team source the project, which may be replicated in other countries.
· IFC invested $20 million in Nigerian restaurant operator, Food Concepts, to help it expand operations in Ghana and Nigeria, increasing the availability of affordable food. IFC will provide guidance to Food Concepts on best practices in corporate governance, environmental and social matters. The company aims to integrate SMEs into its food supply chain in West Africa, supporting the growth of agribusiness in the region.
· In Liberia, IFC and the World Bank set up a one-stop business registry system, which will allow entrepreneurs to register their business in 48 hours instead of 99 days. The new registry added to IFC-led regulatory reforms to make Liberia a more attractive investment destination. As part of IFC Advisory Services Conflict Affected States in Africa program, in June 2011, IFC and other donors agreed to renew the Liberia private sector development program, managed by IFC. The new phase of the program aims to develop a commercial court to resolve business disputes and establish a credit bureau. Reforms supported by the Liberia program have generated $11-13 million investment; created about 20,000 new jobs, and led to private sector savings worth $4.7 million.
· IFC has actively promoted leasing as an innovative way for SMEs to acquire the equipment and vehicles they need to grow. In 2011, IFC led workshops to raise awareness about leasing laws and strategies in Sierra Leone and Mali. Public and private sector organizations, banks and small entrepreneurs all attended the forums.
Eastern and Southern Africa
· Kenya Commercial Bank received a loan of $100 million from IFC to expand its lending program to SMEs. KCB will use the loan to increase access to finance for entrepreneurs in Kenya, Tanzania, Rwanda, Uganda, and the emerging economy of South Sudan. IFC provided $5 million of the loan to Rwanda in local currency, to help manage risk more effectively by limiting foreign currency exposure. KCB will also use part of the loan towards its housing finance activities, which have a great multiplier effect on economic growth and job creation.
· In May 2011, IFC committed $25 million of financing to Leo Burundito make phones moreaccessible, promote new technologies, and enable entrepreneurship. Burundi has one of the lowest mobile phone usage rates in Africa with only 19 percent of the population having access to mobile phones. With IFC’s financing, market-leader Leo Burundi will expand its network coverage in underserved regions and improve the quality of service. The company is owned by Orascom Telecom, an Egyptian company with operations across the Middle East and Africa.
· In November 2010, IFC launched a 'Sanitation and Safe Water for All' program in Kenya to support increased private sector investment and participation in the delivery of water and sanitation services. During the year, the program provided advisory services to support a number of local, water-treatment SMEs to access financing, and established a public-private partnership project for urban sanitation.
· IFC and the World Bank also encouraged public-private partnerships for health care, through the agenda-setting report, “Healthy Partnerships: How Governments Can Engage the Private Sector to Improve Health in Africa”, published in June 2011. The report was the first to measure the relationship between the public and private healthcare sectors in 45 countries across Sub-Saharan Africa.
· IFC provided an $3 million loan to Singapore based logistics company, Portek, to finance the privatization of Rwanda’s largest warehouse operator, Magasins Generaux de Rwanda(Magerwa). The logistics sector is crucial to economic growth in Rwanda, where goods worth over $1.2 billion, or 25 percent of GDP, are imported annually. Portek, a seasoned port operator, will help introduce international best practices, improving efficiency and reducing costs. Portek and Magerwa also aim to create better linkages between Rwanda and key east African ports of Mombasa and Dar-es-salaam.
· IFC received a mandate to advise the government of Rwanda to develop and structure a PPP for a new, sustainable bulk water source for the capital city of Kigali. IFC will support an open international competitive tender process for the selection of the private investor that would finance, design, build, operate and maintain the project.
· IFC signed a $50 million loan agreement with Petra Diamonds Limited to support the expansion of the seventy-year-old Williamson diamond minein Tanzania. The financing will help return the mine to profitability, extend its life, and maintain employment for about 1,000. IFC will work with Petra to ensure that the Williamson expansion is carried out in an environmentally and socially sustainable manner.
· IFC’s education investments and advisory services activities reached over 31,000 students in Kenya, 17,000 in Uganda and over 23,000 in Rwanda.
· To support SME finance in Rwanda IFC provided financing to Business Partners SME Fundand Urwego Opportunity Bank, Rwanda’s only microfinance bank. The total investments of more than $4 million will improve access to finance for SMEs and borrowers in previously unreached areas of the country. IFC is lending to Urwego Opportunity Bank in local currency, under an innovative swap facility with Rwanda’s National Bankestablished in 2009. The Rwandan franc financing helps reduce risks related to foreign currency, while offering long term financing for local enterprises.
· In Ethiopia, IFC is partnering with the Ethiopia Commodity Exchangeand commercial banks to develop an innovative warehouse financing scheme. Upon depositing goods in a warehouse, a farmer is provided with a warehouse receipt. The farmer deposits and pledges the commodities in favor of a selected bank in a warehouse identified by the borrower and approved by the Bank. Warehouse receipts thus provide a secure system whereby stored agricultural commodities may serve as collateral, trade, or be used for delivery against financial instruments. In 2011, three Ethiopian banks, United, Commercial Bank of Ethiopia, and NiB, signed a warehouse financing agreement with the ECX. IFC is providing financing to participating banks in the form of guarantees (risk-sharing) or short-term lines of credit on their warehouse lending portfolio. IFC initially provided financing of more than $9 million for the system, and has also committed advisory services to participating banks.
· IFC provided a $24 million loan to Roofings Rollings MillsLtd to help the Ugandan steel products manufacturer expand operations in Uganda and the Great Lakes region. The company plans to set up a wire galvanizing plant and two rolling mills complexes to increase production of steel construction materials for local and export markets. The investment is expected to boost Uganda’s construction and housing sectors, while creating job opportunities and local economic growth
· The Africa Micro, Small, and Medium Enterprise Finance Programis a major pillar of IFC’s strategy to support the growth of smaller businesses in Africa, especially those operating in challenging economic environments. The program provides financial products and advisory services (including long-term resident advisors and short-term experts) to participating banks to help them expand lending and other banking services to SMEs, which often struggle to obtain financing. In fiscal year 2011, the AMSME Finance program partnered with Bank of Africa to extend advisory services and loans of $17 million to BOA’s subsidiaries in Kenya, Tanzania and Uganda.
· Lighting Africa, a joint IFC and World Bank program, is mobilizing the private sector to provide safe, affordable and modern off-grid lighting to Africa’s un-electrified communities. By the end of fiscal year 2011, Lighting Africa had provided cleaner, better sources of energy to 1.5 million consumers across the continent. Lighting Africa also opened its first testing lab in East Africa at the University of Nairobi. The lab tests off-grid lighting products as a service to manufacturers, with Lighting Africa meeting half the costs for partner companies. To encourage use of clean energy, the program ran a consumer education campaign in rural Ghana and Kenya, reaching 9 million people. Lighting Africa also set up a partnership with Kenyan microfinance institution, Faulu, who will provide loans for people in rural areas to purchase solar lanterns.
· IFC provided financing to South Africa’s Mercantile Bankto promote the development of the SME sector in South Africa and encourage lending to projects with environmental benefits. Mercantile Bank’s main shareholder is Caixa Geral de Depósitos of Portugal. IFC is providing a loan of €50 million equivalent, of which €1.6 million will be financed by the Clean Technology Fund.
· IFC provided $9.6 million in financing to support the Gateway Mall, the first retail shopping complex Lilongwe, the capital city of Malawi. With strong international anchor tenants and a range of retailers including smaller local companies, the shopping mall will bring quality retail services closer to the community, thus minimizing costs to consumers and helping to establish a strong retail destination. It will create jobs during construction and operational stages, increase business opportunities to local suppliers of goods services, and promote the formalization of the retail sector in Malawi, which is today mostly informal.
· IFC provided an ZAR80 million loan to Namibia’s Trustco FinanceLimited to help the microlender increase its lending to students and for teacher training, improving access to education and raising education standards in Namibia. IFC’s investment will help Trustco double its student lending program in five years, allowing more students in Namibia to benefit from a post-secondary education. Trustco will also provide more loans to teachers, who will use the funds to enroll in teaching training courses to improve their skills. IFC’s loan is backed by advisory services support that will help the Trustco Group improve its corporate governance.
· IFC provided a ZAR75 million loan to Apollo Tyres South Africato allow the company to increase domestic tire supply. It supports the investment by an Indian company into South Africa, in line with IFC’s strategy to support south-south investments. It continues IFC’s support for Apollo Tyre’s growth into a global tire company, which began with financing in India.
· IFC provided financing to Teraco Data Environmentsto help it expand its data center storage and hosting facilities in South Africa and into other parts of Africa, improving information technology infrastructure in the region. Teraco’s longer-term strategy calls for expansion in Africa outside South Africa. IFC is providing ZAR 35 million South African rand (ZAR, equivalent to approximately $5 million) in equity-type finance, alongside an additional ZAR 80 million in senior debt provided by the Development Bank of Southern Africa to support Teraco’s further growth.
· South African grape producer Karsten Farmswill be able to reduce its energy use and improve its competitiveness through the IFC Cleaner Production Lending Facility, supported through IFC Advisory Services. The CPLF also allows clients such as Karsten Farms to pilot investments in energy efficiency and renewable energy that they may roll out more widely in their operations. Karsten Farms will use IFC’s long-term $900,000 loan in local currency to install efficient lighting and refrigeration systems on its Klein Pella farm to reduce its operating costs, new technologies for cold storage upgrades, and solar water heaters in approximately 300 farming worker homes on ten farms
