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Washington, DC. October 30, 2006
— The International Finance Corporation, the private sector arm of the World Bank Group, today announced that it provided a total of US$2.6 billion in financing to the Latin America and the Caribbean during fiscal 2006, making the region the largest recipient of IFC financing during this period and bringing IFC’s investments in the region to $31 billion over the last 50 years.
In fiscal year 2006 (July 2005-June 2006), IFC committed $1.75 billion to 69 private sector projects, as well as $888 million from commercial banks through syndicated loans, for a total of $2.6 billion. This financing was broadly distributed throughout the region, with the largest support for companies in Brazil, Mexico, Argentina, Colombia, the Caribbean, Central America, and Peru, benefiting such sectors as infrastructure, housing, microfinance, agribusiness, and oil and gas.
IFC’s support to Latin America and the Caribbean also included advisory and technical assistance activities to improve the investment climate and the prospects for small businesses, the region’s largest source of employment.
“The private sector in Latin America and the Caribbean plays a key role in the region’s social and economic development by investing and creating the majority of jobs available in the market,” said Atul Mehta, IFC’s Director for Latin America and the Caribbean. “Our focus here is on improving the conditions for private sector investment by financing projects in infrastructure, developing financial markets, and improving the regulatory environment. We also actively support private sector companies in their efforts to raise the environmental, social, and corporate governance standards of their operations.”
IFC’s strategy to support development in Latin America and the Caribbean includes:
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Improving the business enabling environment, and helping small businesses join the formal economy
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Increasing access to finance for micro-entrepreneurs and small businesses
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Providing long-term financing for corporations
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Strengthening infrastructure by increasing private sector participation and advising on reforms of the regulatory framework
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Promoting sustainability through higher standards for corporate governance and environmental and social performance
Among the projects that IFC supported in fiscal year 2006 are:
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Fostering
access to finance
by committing a record $635 million through 25 transactions in the region, including $59 million in syndicated loans from participating banks. These commitments included $156 million in Colombia, $130 million in Mexico, $111 in Brazil, and $81 million in the Caribbean.
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IFC committed $407 million and mobilized an additional $312 million for 14
infrastructure projects
in the region, working on public-private partnerships to maximize impact. Projects included a 310-megawatt thermal power plant in Brazil, the expansion of Jamaica’s Sangster International Airport, construction of the Samana airport in the Dominican Republic, and the construction of new campuses by Universidad Tecnológica de México (Unitec).
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Sustainability initiatives
supported by IFC included technical and financial assistance to improve environmental, social, and corporate governance practices. In Brazil, for example, IFC supported the development and launch of the Business Sustainability Index, the second index of its kind in emerging markets, which was recently launched by the Sao Paulo Stock Exchange (Bovespa). It recognized 28 of the companies listed on the Bovespa for their environmental, social, and corporate governance performance.
IFC’s first investment in Latin America, and worldwide, was a $2 million, 15-year loan to Siemens in 1956 to support manufacturing of electricity-generating equipment in Brazil. Fifty years later, IFC has invested and mobilized up to $31 billion in the region, including $600 million for 30 companies in the region’s lowest-income countries, Haiti and Bolivia.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org
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