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ENDING POVERTYAND BUILDING AND BUILDING SHARED PROSPERITYSHARED PROSPERITY
WORLD BANK GROUP
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Bedrijvendag
Internationale Organisaties
12 september 2013
Frank HeemskerkExecutive Director World Bank Group
Bank in a complex world
http://www.youtube.com/watch?v=cuOxBExprRsRight click ‘open hyperlink’
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Topics:
I.World Bank Group Governance
II.Africa’s Changing Image
III.IFC & MIGA
IV.Lessons learned on procurement
V.Q&A
21% 19%
4% 19%19%
LENDING BY REGIONFY12 COMMITMENTS IBRD + IDA
18%
WORLD BANK = BANK OF THE WORLD
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IBRD TOP BORROWERS FY12
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IDA TOP BORROWERS FY12
Member Countries(188)
Board of Governors(188)
Board of Directors(25)
President
World Bank Management and
Staff
Shareholders
Voting power: Netherlands: 2.05%
Constituency total: 4.25% (6th)
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Shared Mission: To Promote Economic
Development and Reduce Poverty
Shared Mission: To Promote Economic
Development and Reduce Poverty
IBRDInternational Bank for
Reconstruction and
Development
IDAInternational
Development
Association
MIGAMultilateral
Investment and
Guarantee Agency
To promote institutional,
legal and regulatory
reform
Governments of poorest
countries with per capita
income of less than
$1,025
�Technical assistance
�Interest Free Loans
�Policy Advice
To reduce political
investment risk
Foreign investors in
member countries
�Political Risk Insurance
Est. 1945 Est. 1960
IFCInternational Finance
Corporation
To promote private sector
development
Private companies in
member countries
�Equity/Quasi-Equity
�Long-term Loans
�Risk Management
�Advisory Services
Est. 1956 Est. 1988
To promote institutional,
legal and regulatory reform
Governments of member
countries with per capita
income between $1,025
and $6,055.
�Technical assistance
�Loans
�Policy Advice
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World Bank GroupWorld Bank Group
Role:Role:
Clients:Clients:
Products:Products:
Africa’s Changing Image From Hopeless to Hopeful in 13 Years…
May 13th, 2000 July 15th, 2000 July 2nd, 2005February 24th, 2001 March 15th, 2008
December 3rd, 2011September 26th, 2009 March 2nd, 2013
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Africa: Policy makers tackling key challenges
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Challenges Remain, Impeding Investment and Growth
Major Growth Opportunities, Despite RisksImproving Macro Fundamentals, Demographics, Urbanization, Credit Growth
• Consumer Goods and Services– This sector will benefit most from the strong credit growth and domestic demand growth, particularly in larger markets with
urbanization and rising middle class (financial services, health, education, telecom / Internet)
– Car manufactures (low-cost producers and distributors)
– Retail (still highly informal, but shifting to formalized platforms)
• Housing– Rapid demographic growth and urbanization will increase the demand for housing and infrastructure
– Focus on construction and cement
• Agribusiness / Food– Soft commodities and cash crops bedrock of most African economies
– Although challenges in distribution channels remain, urbanizing middle class is driving demand
– Export of processed and semi-processed foodstuffs (horticulture, cut flowers) need to raise standards
– Investment and major job creation opportunities in inputs, finance, and beverage and food producers
• Financial services– Several key players from large economies (e.g. South Africa, Kenya, Nigeria) well placed for further continental expansion.
Attractive since majority of Africans remains unbanked or has limited access to financial services, even in large countries
– Mobile banking
• Infrastructure and Telecom– Africa lags behind in power, transport and sanitation
– Annual financing gap of more than US$50bn represents investment and PPP potential
– Despite growth in recent years, large development impacts remain given low penetration levels
• Extractive industries– New players in Africa (Guinea, Mozambique) and globally (China, Brazil) add new dimension to sector
– South Africa mining sector will go through a near-term slowdowns as the EM slows, but medium-term demand remains solid.
However mine productivity declining due to age, rising costs.
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Over US$100 billion Invested in
Emerging Markets since 1956
Shareholders 184 member countries
S&P & Moody’s Rating AAA/Aaa
Total Assets US$76 billion
Portfolio US$56 billion
Committed in FY13 US$24.8 billion
- Own Account - US$18.4 billion
- Mobilized - US$ 6.4 billion
# of Active Projects 1,737
# of Countries 129
# of Equity Investments 800
* As of 6/30/2013
IFC Commitments by Region
Largest global development institution focused
exclusively on the private sector in developing
countries
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109 country and regional offices worldwide - AAA
4,015 staff (57% are based outside Washington DC) 15
IFC’s Global Reach100+ country and regional advisory services offices worldwide
Dakar
Nairobi
Johannesburg
Cairo
IFC HQ/Regional Hub
IFC Hub Offices
IFC Regional Operations Center
IFC Country Offices
World Bank Group Hub Office
Washington
Mexico City
Bogota
Buenos Aires
São Paulo
Santo Domingo
Moscow
Hong Kong
New Dehli
Almaty
Istanbul
Paris
Singapore
Investment clients provided:
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• 2.7 million jobs
• Health services to 17.2 million patients
• Education to 1 million students
• Improved opportunities for 3.1 million
farmers
• Electric power to 52.2 million
• Water distribution to 42 million people
The Reach of IFC’s Projects—2013
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Fiscal Year 2013 Highlights
Investments: 612 new projects in 113 countries
Advisory services: $232 million in program expenditures
$24.8 billion in financing: $18.3 billion for IFC’s own account, $6.5 billion mobilized
$49.6 billion committed portfolio
IDA countries account for almost half of IFC projects overall: $3.5 billion invested in Sub-Saharan Africa
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FY13 Investment Commitments: $24.8 Billion
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22% growth from FY12 to FY13
Investments by Industry, FY13
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Commitments for IFC’s Account: $18.3 Billion
Investments by Region, FY13
Commitments for IFC’s Account: $18.3 Billion
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The Netherlands
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A Strategically Important Partner
IFC commitments with Dutch sponsors are large compared to similar sized European countries:
•As of August 2013, active IFC investments with 15 Dutch companies amounted to US$765 m (25 projects in 16 countries). GER: $1.04 billion FRA: $2,35 billion SWI: $956 million SWE: $81 million UK: $2,32 billion BEL: $87 million
•IFC works actively with Dutch commercial banks and FMO on syndications and co-investments.
Case Study I
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Tanzanian Brewery
• Tanzania Breweries was one of the first companies to be privatized under the Tanzanian Government’s economic reform program.
• IFC provided a loan of $18.4 million, including a $7.4 million syndication with participation from FMO, and an equity investment for Tanzania Breweries Limited to build a new brewery and to rehabilitate and upgrade the company’s existing breweries.
• The financing provided by FMO and IFC helped the company increase its output capacity and meet international health, safety, and environmental standards.
Case Study II
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Zambian Bank
• To increase access to finance for smaller entrepreneurs and agribusiness companies in Zambia, IFC provided a loan to Zambia National Commercial Bank PLC (Zanaco), which was privatized in 2007 and in which Rabobank holds a 46% stake.
• Zanaco used the $25 million senior loan from IFC to increase products and services that target small and medium enterprises, especially in the agricultural sector, and to expand its lending in less developed and rural regions of Zambia.
• The investment builds on an existing partnership in which IFC and Rabobank support Zanaco to train and increase access to finance for some of Zambia’s farmers.
Case Study III
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The Efficient Lighting Initiative
• Philips was actively involved with IFC in the Efficient Lighting Initiative from 2000 to 2004. This multi-country program was to support efficient lighting markets and to reduce greenhouse gas emissions associated with fossil fuel-fired thermal plant electricity generation.
• These initiatives lead subsequently to joint investment projects in Poland, Egypt, Brazil and Turkey.
• Currently, Philips is exploring further possibilities to cooperate with IFC.
Case Study IV
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Russian Dairy
• IFC's provided a US$10 million loan to Campina in 2005. This cooperation supported and comforted Campina in its first investment in Russia. It helped rejuvenate the Russian dairy industry by improving animal husbandry, employing the latest technology and raising quality to international standards.
• Campina obtained its fresh milk supply from local farmers; hence the country's agricultural sector has benefitted from the development of the dairy farming industry. To ensure adequate supply of high quality fresh milk, the company has also provided technical support to farms and has improved milk collection.
Case Study V
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Local Service Provision in India
• IFC and Dutch New Venture Partners took equity shares in Suvidhaa Infoserve Private Limited, a retail service aggregator, in order to support its expansion of services in India.
• Suvidhaa provides access to local services such as purchase of railway tickets, airline tickets, or mobile top-up, through its manned retail outlets with Suvidhaa application and PC. Its outlets also serve as collection points for many services such as utility bills and insurance premia.
• Investments by IFC and New Venture Partners will help Suvidhaa to further target the large bottom of the pyramid and non-internet savvy consumers who will benefit from the one-stop shopping and payment mechanism.
MIGA’s Strategic Priorities are:
•Supporting investments in the world’s poorest
countries
•Opening up difficult or frontier markets, especially in
conflict-affected countries
•Supporting complex projects in infrastructure and
extractive industries
•Promoting cross-border investments between
developing countries (South-South investment)
MIGA’s Strategic
Priorities
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MIGA insures against:
•Currency Inconvertibility and Transfer Restriction
•Expropriation
•War and Civil Disturbance
•Breach of Contract
•Non-Honoring of Financial Obligations
MIGA’s Products
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MIGA’s Highlights
Guarantees Issued (US$ Billion)
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MIGA’s Exposure
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WBG procurement review
Modernisation of procurement – 2014Not solely for WB funding - worldwide impact
Position Paper initiated by NL cosigned by CAN-FRA-
GER-UK-SPA-SWI; US aligned.•Procurement key to development
•Emphasis quality & value for money (MEAT)
•Transparency & level playing field
•Integrity: integrate combating corruption
•Appropriate complaints mechanisms
•Not one-size-fits-all: risk based approach
•Capacity building: in country and staff WBG
•NL has knowledge to offer: e.g. innovative PPPs
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• Local involvement is essential local contracts
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Lessons learned on procurement
• Partnering with the World Bank Group
requires Long Term strategic engagement
• Dutch Embassy in WashingtonDC as well as the
Executive Directors office can assist in initial
and/or end phase
Frank Heemskerk
Bewindvoerder Wereldbank
(+ 1) 202 458 2052/2053
Bedrijvendag Internationale Organisaties
Den Haag, 12 september 2013
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