International Financial Corporation (IFC) in China

  Overview
  IFC in China

  IFC Operations in China
  Contacts

Overview - IFC

 

The International Finance Corporation is a social enterprise, fostering sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments.

 

In partnership with private investors, IFC provides loan and equity finance for business ventures in developing countries and helps expand their economies and create jobs. IFC plays a catalytic role by demonstrating the profitability of investments in emerging markets.

 

In all of its investments and advisory projects, IFC never loses sight of its ultimate goal: to improve the lives and raise the living standards of those in developing countries who most need the benefits of economic growth.

 

As a member of the World Bank Group, IFC coordinates its activities with the International Bank for Reconstruction and Development, the International Development Association and the Multilateral Investment Guarantee Agency, but it is legally and financially independent. Its 181 member countries provide its share capital and collectively determine its policies.

 

·         IFC is the world’s largest multilateral source of equity and loan financing for private enterprises in developing economies.  Its financing is long-term and market-priced.

·         IFC shares project risk with sponsors and financial partners but does not participate in project management.

·         IFC finances only a portion of the cost of any project.  For every US$1 of IFC financing, other investors and lenders provide US$5.

·         IFC's charter requires it to operate on commercial terms, targeting profitability.  Corporation has made a profit every year since its inception.

·         IFC does not accept government guarantees. 

 

IFC’s participation in projects helps reassure and balance the needs of each party in a transaction: foreign investors, local partners, other creditors and government authorities.

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IFC in China

 

China is IFC’s 3rd largest country portfolio and is one of IFC’s fastest growing client countries.  Since its first investment in 1985, and as of June 30, 2009, IFC has invested 169 projects in China. For these projects IFC has provided US$4.287 billion: US$3.3 billion for IFC’s own account, and US$754 million for the account of participating banks and US$249 million is guarantees IFC provided.

 

IFC China’s Strategies in China are focused on: 

 

·         Sustainability and Climate Change, including environmental assessments, energy efficiency, renewable energy, water quality, exploitation of natural resources, etc.

·         Access to Finance, including enhance SME lending in banks, implement microfinance strategy, rural finance, leasing, etc.

·         Agriculture and Rural Livelihoods, including agricultural production and food security, food processing, agricultural linkages, rural banks, etc.

·         Global China-IFC Partnership, including support for Chinese investments in emerging markets, joint support for global trade, regional and infrastructure funds, sharing China’s developmental lessons with other regions.

 

What sets IFC apart

 

IFC is in the business of creating opportunity and improving lives in developing countries.  With our commitment to the private sector, we bring a unique combination of financial  products and advisory services that helps us create value for our clients and shareholder governments and foster sustainable, results-oriented development.

 

• Development Impact. In addition to sound financial results for clients, IFC seeks ways to improve individual lives, broaden opportunities for entrepreneurs, and contribute to the economic, social, and environmental well-being of communities. IFC measures the impact of its investments and advisory services and applies lessons learned.
• World Bank Association. As a member of the World Bank Group, IFC can offer a greater  readth of advisory services than any other private sector development finance institution.
•  Market Discipline. IFC has proved each year since 1956 that private investments—subject to the discipline of the marketplace — can result in profitable, sustainable businesses in developing countries.
• Financial Sector Influence. IFC’s deep involvement with the financial sector, including commercial banks in both industrialized and developing countries, allows us to catalyze three to four private sector dollars for every dollar we invest and multiply the impact of these investments.
• Long-Term Partnerships. Over the course of long-term relationships with clients, IFC adds value through an array of financial products as well as advisory services.
• Sustainable Investments. IFC ensures that investments do more than simply improve a company’s balance sheet — we help clients adopt practices that strengthen their business while simultaneously enhancing the development impact of the investment.
• Corporate Governance. IFC aims to help companies improve standards of governance, focusing on shareholder and stakeholder rights, board member duties, disclosure, and effective enforcement.
• Preferred Creditor Status. In the event of a currency crisis in a particular country, participants in IFC’s syndicated loans share fully in our status as a preferred creditor, including access to foreign exchange. 

IFC is one corporation, comprising both financial products and advisory services that offer businesses and entrepreneurs in the developing world what they need to meet the challenges they face in the global marketplace.

 

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IFC Financial Products

 

Loans and Intermediary Services. IFC offers its clients a variety of lending instruments. Loans are issued at market rates, both in hard currency and in an increasing number of emerging market currencies.

 

Equity. IFC buys and holds shares in companies, other project entities, financial institutions, and portfolio or private equity funds.

 

Syndicated Loans. Through its syndicated loan program, IFC offers commercial banks and other financial institutions the chance to lend to projects and companies they might not otherwise consider. For loan participations, IFC remains the lender of record.

 

Structured Finance. IFC’s structured finance products enable clients with strong, sustainable projects to access capital that otherwise might not be available to them. Products include partial credit guarantees, participation in securitizations, and risk-sharing facilities.

 

Risk Management Products. IFC’s risk management products provide clients with access to long term derivatives markets. For example, instruments allow clients to hedge their foreign exchange exposures , which are typically related to foreign currency borrowings.

 

Trade Finance. IFC aims to help emerging markets increase their share of global trade; we have established a worldwide network of bank partnerships that finance trade under risk coverage provided by IFC.

 

Subnational Finance. IFC and the World Bank work together to provide capital investment to municipalities and other local public entities that deliver key infrastructure services in developing countries.

 

Treasury Operations. IFC funds its lending activities by issuing bonds in international capital markets and has been the first multilateral, or among the first, to issue bonds in the local currencies of many emerging markets.

 

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IFC Advisory Services

 

Business-Enabling Environment. IFC helps our client countries improve the legal, institutional, and regulatory conditions for doing business at the national and subnational level, making their economies more conducive to private sector growth. Our services include:

 

Value Addition to Firms. IFC adds value beyond financing to help firms grow and become more competitive, with an emphasis on:

 

Environmental and Social Sustainability. IFC helps companies and financial institutions become more socially responsible and improve their environmental and social performance through a variety of channels, including:

 

Infrastructure. IFC provides advisory services to help governments and private companies strengthen local infrastructure, with a focus on:

 

Access to Finance. IFC addresses the supply of financing through advisory services that help make financial markets more efficient, including:

 

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For more information, please contact:

 

Michael Ipson, Country Manager, China and Mongolia

International Finance Corporation Resident Mission in China

15/F, China World Tower 2

No. 1, Jian Guo Men Wai Street

Beijing 100004, PR China
Phone: (86-10) 5860-3000

Fax (86-10) 5860-3100