ADVISORY OPPORTUNITIES IN IFC

MILAGROS RIVAS SAIZGlobal Head, Advisory Services

IFC at a glance

1

PROVIDING DEVELOPMENT SOLUTIONS … Customized To Meet Client Needs

� A member of the World Bank Group

� Provides investment, advice, resource mobilization

� AAA credit rating; owned by 184 countries

� Mandate to reduce poverty & foster inclusive growth by creating markets

� Present in nearly 100 countries

IFC is the largest global development institution focused exclusively on the private sector in developing countries.

IFC: A MEMBER OF THE WORLD BANK GROUP

Loans to middle-income

and credit-worthy low-income country

governments

IBRD

InternationalBank for

Reconstruction and

Development

Interest-free loans and grants to governments

of poorestcountries

IDA

International Development Association

Solutions in private sector development

IFC

International Finance

Corporation

Guarantees of foreign direct

investment’s non-commercial risks

MIGA

Multilateral Investment Guarantee

Agency

Conciliation and arbitration of investment

disputes

ICSID

International Centre for

Settlement of Investment Disputes

WHAT WE DOIntegrated Solutions, Increased Impact

INVESTMENT

� Loans

� Equity

� Trade and Commodity Finance

� Syndications

� Derivative and Structured Finance

� Blended Finance

ADVICE

Innovative Solutions Combining IFC’s Expertise and Tools to:

� Help Create New Markets

� Unlock Investment Opportunities

� Strengthen Clients’ Performance and Impact

IFC ASSET MANAGEMENT

COMPANY

� Mobilizing and Managing Capital for Investment

49,5%

14,4%

9,7%

5,8%

3,6%

3,7%3,0%

8,3%2,0%

Financial Markets

Infrastructure

Agribusiness and Forestry

Health and Education

Tourism, Retail, and Property

Oil, Gas, and Mining

Funds

Manufacturing

Telecommunications and Information Technology

FY17 long-term investment commitments by industry

OUR INVESTMENTS

8%

26%

18%

29%

6%

13%Energy and Resource Efficiency

Investment Climate

Cross-Industry Areas

Financial Sector

Agribusiness

Public Private Partnerships

FY17 Advisory services: expenditures: $245 millionOUR ADVISORY

22,7%

14,7%

19,6%

17,6%

16,7%

8,0%0,7%

Latin America and the Caribbean

East Asia and the Pacific

Sub-Saharan Africa

Europe and Central Asia

South Asia

Middle East and North Africa

Global

FY17 LONG-TERM INVESTMENT COMMITMENTS BY REGIONCOMMITMENTS FOR IFC’S ACCOUNT: $11.9 BILLION

10%

14%

33%

17%

11%

9%

6%

Latin America and the Caribbean

East Asia and the Pacific

Sub-Saharan Africa

Europe and Central Asia

South Asia

Middle East and North Africa

Global

FY17 ADVISORY EXPENDITURES OF PROJECTS WITH CLIENTS BY REGIONTOTAL EXPENDITURES: $245.7 MILLION

10%

14%

33%

17%

11%

9%

6%

Latin America and the Caribbean

East Asia and the Pacific

Sub-Saharan Africa

Europe and Central Asia

South Asia

Middle East and North Africa

Global

FY17 ADVISORY EXPENDITURES OF PROJECTS WITH CLIENTS BY REGIONTOTAL EXPENDITURES: $245.7 MILLION

2.4 million jobsHealth services to 31.8 million

patients

Education to4.6 million students

Improvedopportunities for 3.5 million

farmers

Power generated for 48

million people

Water distribution to

21.8 million people

262.8 million customers

receiving phone connections

108 million people with

access to power

OUR REACH2016

IFC 3.0: Strategic Directions for the Future

Complex development challengesComplex development challengesComplex development challengesComplex development challenges

The world is facing increasingly The world is facing increasingly The world is facing increasingly The world is facing increasingly

complex development challenges:complex development challenges:complex development challenges:complex development challenges:

600m600m600m600m people to join labor market in

IDA & FCS countries in next decade

46%46%46%46% of the world’s poor will live in

FCS by 2030

1.2b1.2b1.2b1.2b people lack access to electricity

2b2b2b2b adults without basic financial

services

400m400m400m400m people without access to

essential health services

26m26m26m26m people pushed into poverty each

year due to extreme weather

PRIVATE SECTOR IS CRUCIAL TO TACKLE DEVELOPMENT CHA LLENGES

Role of development financeRole of development financeRole of development financeRole of development finance

$2.5 trillion of investment needed per $2.5 trillion of investment needed per $2.5 trillion of investment needed per $2.5 trillion of investment needed per

year to meet the SDGs: year to meet the SDGs: year to meet the SDGs: year to meet the SDGs:

Public finance alone, including ODA,

is insufficient

Private capital flows to emerging

markets are concentrated in high and

upper-middle income countries

Large pools of untapped private

capital are yet to be deployed in

developing markets

A new aid architecture for

development finance is

needed to crowd in

untapped capital from

private sector financiers,

especially in low income

countries and FCS

WBG APPROACH: Cascading Private-Public investments

1 23 4

Is there a sustainable private sector solution that limits public debt and contingent liabilities? If the answer is YES, we

promote private solutions

If the answer is NO, we ask: Is it because of:

� Policy or regulatory gaps or weaknesses? If so, we provide support for policy and regulatory reforms.

� Risks? If so, we assess whether World Bank Group instruments can mitigate them.

If the project requires public funding, we pursue that optionJORDAN

A privately managed airport has doubled passenger capacity, attracting $1 bn in government revenues.

• Adopt a “cascade” approach “cascade” approach “cascade” approach “cascade” approach to maximize the mobilization of

private sector investments

• Boost capital market developmentcapital market developmentcapital market developmentcapital market development

• Scale up platforms platforms platforms platforms and development instruments to mobilize

funding from private investors

• Increase focus on FCS and IDA focus on FCS and IDA focus on FCS and IDA focus on FCS and IDA countries

• Create new denew denew denew de----risk investment tools risk investment tools risk investment tools risk investment tools (Risk Mitigation , Long-term,

Local Currency Investments and Blended Finance)

• Promote Advisory services Advisory services Advisory services Advisory services to maximize the outcomes by

removing barriers to private investment, especially in IDA/FCS

IFC 3.0 STRATEGY: CREATING MARKETS AND CROWDING IN PRIVATE SECTOR

IFC will lead the IFC will lead the IFC will lead the IFC will lead the

development development development development

communitycommunitycommunitycommunity

• Stimulate innovation to

create new markets that

address development

challenges

• Crowd in and create

markets for disruptive

technologies to deliver on

SDGs

Enable SMEs to grow and

create jobs through Advisory

support through:

• Enabling environment

• Better access to finance

• Open access to markets

• Greater SME capacity

Work with public and private

sector clients to close

economic and social gaps

between men and women,

thereby making firms and

economies more productive,

competitive, and inclusive.

• GHG emission reduction

and resilience

• Account for climate risk

• 28% of its annual financing

by 2020

• Catalyze $13b in private

sector capital

• Enhance food security

• Enhance productivity and

efficiency

• Promote food safety

standards

• Improve market access or

increase trade / exports

• Deliver reliable access to

clean energy

• Transportation networks

• Augment water, sanitation

& treatment capacity

• Urbanization demands

Infrastructure Agribusiness Health & Education

• Improve health

outcomes

• Address the skills gap

Climate Change Gender SMEs

Financial Inclusion

• Enable the unbanked to

access financial services

• Increase access to finance

(capital)

• Leverage technology

(digital finance.

Innovation & Disruptive

Technologies

IFC 3.0 STRATEGY: SECTOR PRIORITIES

Opportunities to work for IFC

KEY OPPORTUNITIES

INVESTMENT

� Loans

� Equity

� Trade and Commodity Finance

� Syndications

� Derivative and Structured Finance

� Blended Finance

ADVICE

Innovative Solutions Combining IFC’s Expertise and Tools to:

� Help Create New Markets

� Unlock Investment Opportunities

� Strengthen Clients’ Performance and Impact

IFC ASSET MANAGEMENT

COMPANY

� Mobilizing and Managing Capital for Investment

ENGAGE UPSTREAMENGAGE UPSTREAMENGAGE UPSTREAMENGAGE UPSTREAM

to prepare the groundto prepare the groundto prepare the groundto prepare the ground(prior to identifying

potential projects or clients)

DEVELOP PROJECTSDEVELOP PROJECTSDEVELOP PROJECTSDEVELOP PROJECTS

to get investments off to get investments off to get investments off to get investments off

the groundthe groundthe groundthe ground(potential project identified)

SUPPORT FIRMSSUPPORT FIRMSSUPPORT FIRMSSUPPORT FIRMS

to become investment to become investment to become investment to become investment

ready ready ready ready (in challenging markets)

� Identify and assess market opportunities

and link with potential partners

� Identify regulatory barriers to investment,

support rapid reform that reduces risk

and improves investor confidence

� Build awareness and strengthen

management practices across industry

(ESG, financial management)

� Identify and assess feasibility of

potential projects (finance, E&S,

technical)

� Pro-actively engage public and private

stakeholders to structure project

� Support project eco-system (supply

chain, financial services,

infrastructure)

� Assess investment-readiness of

potential local clients

� Help potential and portfolio clients

clear immediate bottlenecks to

become investment-ready (financial

management, EIA, risk assessment)

� Build capacity of clients to enter new

markets

ADVISORY MANDATE

Advisory Objective & FocusClosing access gaps in energy, water, transport as well as building municipal

infrastructure to meet the demands of rapid urbaniza tion

• Assist governments with the structuring and implementation of PPP projects in infrastructure

• Advise governments and its agencies (SOEs) at federal, state or municipal levels

• Advisory on structuring, financial analysis, promotion and tend ering executed by IFC staff supplemented by external specialized consultants (le gal and engineering)

• Three main sectors:

• Energy (generation, including renewable energy, distribution, transmission)

• Transport (ports, airports, roads, urban)

• Social Sectors (health and education)

BOOST PRIVATE SECTOR PARTICIPATION IN INFRASTRUCTUR E

EXAMPLE: PPP

SAO PAOLO ROAD

PPP/BRAZIL

We completely redesigned the

concession process for Sao Paolo’s road

privatization. This brought in $2.8 billion

of new investment via two separate

auctions, with $5 billion expected in

total.

Our contractual innovations are now a

template for further Brazilian road PPPs.

The project also brought in investment

from IFC IS and risk mitigation from

MIGA.

GABON ELECTRICITY

& WATER UTILITY

Advised Gabon Government

on the privatization

of electricity & water utility

in 1997, the continent’s first

privatization of a water & electricity

utility involving full commitment for

future investments and the first full

concession in Sub-Saharan Africa. By

2014, the number of household

electricity connections increased 188%

and water connections 212%.

PATNA HOSPITAL/INDIA

In India, we advised the Government

of Bihar state on a PPP super-specialty hospital

in the capital city, Patna.

The project is expected to mobilize $45 million of private sector investment and

increase access to healthcare services for approximately 25,000 to 30,000

inpatients and 200,000 outpatients per year.

.

SCALING SOLAR

IFC brought together a suite of WBG services to create a viable markets for solar power. The “one stop shop” program rapidly made privately funded grid-connected solar projects operational at competitive tariffs. Seven leading renewables developers competed to build Zambia’s first large-scale solar plants with the lowest prices for solar power to date in Africa.

Service delivery standardized in replicable packages that is being implemented in Senegal, Madagascar and Ethiopia.

CREATING A MARKET FOR GRID-CONNECTED ROOFTOP SOLAR IN INDIA

10,000 people will benefit from increased access to power and nearly 7,000 tons of greenhouse gases will be avoided per year as a result of a 25-year concession to private providers for 2.5MW solar rooftop projects.

IFC advised on the PPP structure as well as technical aspects of the projects.

EXAMPLE: PPP

Advisory Objective & Focus

Crowding in climate-friendly private sector investm ents, and helping firms reduce GHG emissions and mitigate climate risks

Government:• Remove policy/regulatory barriers to private sector participation• Build government capacity to prepare and manage PPPs

Industry: • Conduct market assessment and mapping • Scale project development services and support sponsors to navigate the local environment• Develop climate risk tools to promote climate adaptation and reduce

Firms:• Provide project development services through technical feas ibility studies, financial bankability

assessments, project structuring, power sector and regulatory framework reviews, off-taker risk analysis, and all aspects of power purchase agreeme nts

• Use clean energy and resource efficiency tools to enhance client competitiveness• Leverage multinational companies to build more competitive, climate-friendly supply chains

BOOST PRIVATE SECTOR PARTICIPATION IN CLIMATE- RENEW ABLE ENERGY

EXAMPLE: BALKANS RENEWABLE ENERGY PROGRAM

• Addressed Regulatory gaps and supported novice developers to develop small hydro power plants and other renewable projects in the Balkans

• Provided advice on regulations to enable private investment• Compiled good practices and provided technical trainings for developers• Reviewed project concepts, technical designs and financial models of clients• Trained banks on assessing renewable energy projects• Helped clients secure financing

• The program achieved strong impact with $1.1b investment into 500 MW of renewable energy projects that generate 2000 GWh/year and avoid 1.6m tons of GHG emissions per year

• To achieve lower-carbon growth in the cement industry, IFC

advised 14 cement companies on reducing GHG

emissions by investing in energy efficiency, alternative fuels

and renewable energy, setting an example for other

companies to follow.

• To effect broader change in the sector, IFC supported Low

Carbon Roadmaps in India and Brazil and sponsored global

and country reports informing key players on business

opportunities in climate-friendly projects.

EXAMPLE: CEMENT SECTOR IN BRAZIL AND INDIA

STIMULATE INNOVATION TO CREATE NEW MARKETS

Pro

fitab

ility

MaturityProof of conceptBusiness model development

Technology/Business model

advancement

Advisory Services Investment

• Pro-competition market regulations and sector policies • Develop digital infrastructure• Business development services to innovators through accelerators/incubators with IFC investment• Match making and technology transfer program

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• Support manufacturers of disruptive technologies offering alternative way of meeting sector goals. • Principles for advisory support to promote uptake of a technology: (i) offers better & more cost-effective

solution to user; (ii) increases reach and access to services; and (iii) is evaluated to be commercially viable in the medium-term

Health & Education

Logistics

Quality Assurance

Market Intelligence

Business Support

Consumer Education

Catalyzing Venture

Financing

Catalyzing mainstream Investment

with FIs

Support conducive environment

2

Create conducive environment & ecosystem for innova tion

Promote the uptake of technological innovations Digital finance

Power

COLLABORATION OPPORTUNITIES

Examples:• Assessing market capacity• Market barriers for new technologies or business models• Assessing regulatory frameworks

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Examples:

• Support the development of regulations for scale up

• Demand studies

• Grid integration and grid connection studies for Renewable Energy(Tunisia)• Market price forecast• Definition of technical standards

2

Market assessments

Sector / Systems improvements

Examples:

• Pre-feasibility/feasibility studies

• Preliminary designs

• Cost estimation (investment, O&M, mantenimiento mayor,…)

• Pre-qualification criteria

• Quality standars

• Environmental and social impact studies

3 Client/transaction support

CONTACT INFORMATION

Milagros Rivas SaizGlobal Head, Advisory Services T: +1 202 473 8750Email: Mrivassaiz@ifc.org2121 Pennsylvania Ave. NWWashington, DC 20433 USA