Authorizations and exposure

• IFC finances projects and companies through loans from its own account, typically for 7 to 12 years
• It can also make loans to intermediary banks, leasing companies, and other financial institutions for on-lending
• While IFC loans traditionally have been denominated in the currencies of major industrial nations, it has made it a priority to structure local-currency products
• IFC has provided financing in over 70 local currencies

• IFC generally invests between 5%–20% of a company’s equity
• It invests directly in companies’ equity, and also through private-equity funds
• IFC can also invest through profit-participating loans, convertible loans, and preferred shares

• The IFC Global Trade Finance Program guarantees trade-related payment obligations of approved financial institutions
• The program extends and complements the capacity of banks to deliver trade finance by providing risk mitigation on a per-transaction basis for more than 287 banks across 87 countries

• B-loan: When an IFC loan includes financing from the market through the B-loan structure, IFC retains a portion of the loan for its own account (the A-loan), and sells participations in the remaining portion to participants (the B-loan)
• The borrower signs a single Loan Agreement with IFC, and IFC signs a Participation Agreement with the participants; IFC is the sole contractual lender for the borrower
• Parallel loan: IFC syndicates parallel loans to international financial institutions (IFIs) and other ineligible B-loan participants—under this approach, IFC acts as arranger, as well as administrative assistant
• The Master Cooperation Agreement (MCA) details the manner in which DFIs work together to co-finance projects when IFC is the mandated lead arranger
• The MCA also provides documentation templates which significantly reduces costs and increases efficiency
• The list of MCA signatory countries can be found on IFC’s website
• Credit insurance syndications program: Enables private insurers to increase their exposure to long-term impact underwriting opportunities in developing economies
• IFC signs a credit insurance policy or unfunded risk participation agreement with insurers, transferring a portion of the credit risk on new investments. With the insurers as a backstop, IFC can make larger commitments from its own balance sheet, while funding the entire amount of the borrower’s loan
• Debt securities syndications: IFC helps issuers access capital markets with advisory services, including structuring of first-time green and social bonds, as well as direct investments as an anchor investor
• Managed Co-Lending Portfolio Program (MCPP): Builds a loan portfolio for an investor that mirrors the portfolio IFC is creating for its own account—similar to an index fund
• MCPP investors and IFC sign upfront administration agreements determining the makeup of the portfolio based on agreed eligibility
• Investors pledge capital upfront and then as IFC identifies eligible deals, investor exposure is allocated alongside IFC’s own per the terms of the agreement

• Local currency finance: IFC provides long-term local currency solutions and helps companies access local capital markets
• Local capital market development:
• IFC issues local-currency bonds. IFC Is often the first international, non-government issues of these bonds, paving the way for other issuers
• Partial credit guarantee: A credit enhancement mechanism for debt instruments, and an irrevocable promise by IFC to pay principal and/or interest up to a pre-determined amount
• Typically, the guarantee is structured to cover 100% of each debt service payment, subject to a maximum cumulative payout equal to the guarantee amount
• The guarantee amount is usually expressed as a percentage of the principal and amortizes in proportion to the bond or loan
• In certain circumstances, this percentage can increase or decrease in the later years of the debt obligation, depending upon the needs of the borrower or creditors
• Portfolio risk-sharing facilities (RSF): A bilateral loss-sharing agreement between IFC and an originator (bank or corporation) of assets in which IFC reimburses the originator for a portion of the principal losses incurred on a portfolio of eligible assets
• RSFs are available to cover loans from a wide variety of sectors, including (but not limited to), mortgage, consumer, student, school, energy efficiency, and SME business
• Securitizations: IFC participates in domestic and cross-border securitizations, generally by investing in the mezzanine portion of risk
• This investment generally takes the form of either a partial guarantee on the senior tranche, or a partial guarantee on the investment vehicle, and can be denominated in the client’s currency of choice, including local currency

• Blended finance: A finance package comprised of concessional funding provided by development partners and commercial funding provided by IFC and co-investors
• Risk mitigation or guarantees
• Concessional debt (senior and mezzanine)
• Equity (direct investments and private equity)
• Performance-based incentives
• Focused on agribusiness and food security, climate, SME finance and gender, human capital, low income and fragile economies, and refugees
• Venture capital: IFC's Venture Capital group invests in ventures and growth stage companies that offer innovative technologies or business models geared at emerging markets
• Advisory services
• Help companies attract private investors and partners, enter new markets, and increase their impact
• Help companies adopt good practices and standards to increase competitiveness and productivity
• Help governments structure public-private partnerships to improve people’s access to high-quality infrastructure and basic services
• Help governments implement reforms that encourage private investment

• Projects seeking IFC financing must meet these criteria:
• Be located in a developing country that is a member of the IFC
• Be in the private sector
• Be technically sound
• Have good prospects of being profitable
• Benefit the local economy
• Satisfy the IFC’s environmental and social standards as well as those of the host country

• IFC does not lend directly to MSMEs or individual entrepreneurs, but many of its investment clients are financial intermediaries that on-lend to smaller businesses

• 2024: IFC and JBIC sign a new MOU to collaborate in common regions of operation, help post-war recovery in Ukraine

• 2023: IFC supports new fund to address infrastructure gaps, cut carbon emissions across Asia and Africa