Overview of GICT Private Sector Investments

IFC channels investments toward private companies that bridge the digital divide by building modern communications infrastructure and information technology businesses. By making educational and commercial applications more widely available in developing countries, these investments give local populations access to the latest technologies, best practices and wider markets, and increase the efficiency of operations. Additionally, business opportunities in ICT expand employment and contribute to higher living standards.

IFC generally takes leadership or co-leadership roles in transactions and has the ability to raise additional funds through its syndications and guarantee program. IFC almost always brings along co-investors into projects, providing comfort and acting as a catalyst in encouraging other private investors into markets that are often considered too risky. In this role, IFC is increasingly assisting operators to move outside of their own borders into other developing markets. It is estimated that each dollar of IFC funding attracts approximately US$9 in outside private financing. In all cases, IFC works closely with portfolio companies through participation on boards of directors, introduction to strategic partners, and provision of follow-on financings.

The financial instruments and services available include:

• Hard currency and local currency loans
• Equity, convertible loans and other mezzanine instruments
• Credit enhancement of loans and bonds using partial guarantees
• Securitization
• Risk management services
• Resource mobilization services, including loan syndications.

In making investment decisions, the foremost criteria are:

• Private sector management and ownership; or in the case of pre-privatization projects, strong government commitment to private sector management and ownership
• Highly demonstrable development impact
• Financial, economic, environmental and social sustainability
• Strong, credible sponsorship with experienced management.

In the ICT field, IFC’s investments are focused and organized through two groups within GICT: (i) the telecom and media division; and (ii) the technology division.