IFC’s US$3.4 Billion Investment in East Asia and the Pacific to Develop Infrastructure, Steer Green Growth, and Provide Over Half a Million Jobs
International Finance Corporation (IFC), a member of the World Bank Group, committed US$3.4 billion (FJ$7.3bn) in fiscal year 2018 in East Asia and the Pacific, spurring the growth of a thriving private sector in the region to ensure sustained growth through innovation, job creation, and infrastructure development, among others.
IFC provided US$2bn (FJ$4.29bn) in financing for its own account and mobilised US$1.4bn (FJ$3bn) from other investors in the fiscal year, with IFC’s support enabling businesses to provide over 550,000 jobs, distribute power to 4.4 million people, provide water to 9.6 million people, and improve livelihoods of more than 710,000 farmers.
Rapid urbanisation and business demand
Rapid urbanisation and increasing business demand in the East Asia and the Pacific region are feeding massive infrastructure needs, while at the same time, the region is a major contributor to the global greenhouse gas emissions and highly vulnerable to natural disasters and climate impact.
“In the face of countries’ limited public resources, IFC has been actively looking for solutions to crowd in all possible sources of finance, innovation, and expertise to help meet their challenges,” said Vivek Pathak, IFC’s Regional Director for East Asia and the Pacific.
“IFC is unlocking opportunities in emerging markets and creating jobs with the aim of achieving sustainability through lower costs and efficient service delivery in key sectors such as finance, infrastructure, healthcare, and education.”
IFC’s work has been helping spur the development of green bonds in the region. IFC led World Bank Group support for Fiji to become the first emerging market in the world to issue a sovereign green bond, raising US$50m (FJ$107m) to help the country adapt to a changing climate.
IFC was also the sole investor in the BDO Unibank Inc.’s US$150m (FJ$322m) green bond — the first to be issued by a commercial bank in the Philippines and IFC’s first such investment in a financial institution in the region.
Private sector
As the private sector contributes 90 per cent of jobs in the region, IFC has been boosting its support to small and medium sized enterprises (SMEs) to promote job creation, which is key to reducing poverty in the region. IFC’s US$100m (FJ$214m) loan package to Indonesia’s PT Surya Semesta Internusa Tbk (SSIA) will help develop a new 2,000-hectare green industrial estate and provide over 34,000 jobs in Subang, West Java.
IFC’s loan to the furniture manufacturer Morris Holdings Limited will enable the installation of a modern production facility in Cambodia’s Sihanoukville Special Economic Zone, creating about 800 jobs for local people. In Lao PDR, IFC and Thailand’s TMB Bank teamed up to provide US$9.1m (FJ$19.5m) in financing to ACLEDA Bank Lao Ltd to help the bank increase access to finance for the country’s SMEs, especially those owned by women.
IFC’s support to banks across East Asia and the Pacific was estimated to have generated more than 16 million loans to micro, small and medium enterprises totaled at US$209bn (FJ$ 449bn) in calendar year 2017.
In addition to financing, IFC advises governments and the private sector in the region to create a business-enabling environment and improve sustainability standards.
IFC’s advisory services programme
At the end of first half of 2018, IFC’s advisory services programme in East Asia and the Pacific included 108 active projects valued at a combined US$244.1m (FJ$524m).
In the 2019 financial year , in co-ordination with other World Bank Group’s member organisations, IFC’s strategic focus continues to be on maximising private finance to address development challenges.
By working with governments on a business-friendly environment and mobilising WBG resources, IFC is promoting private investments in the power sector in Myanmar, the Philippines, Papua New Guinea, Lao PDR and Vietnam; in tourism in Indonesia, Papua New Guinea, Solomon Islands and Fiji, and in agribusiness in Vietnam, among others.