IFC boosts sustainable business development globally

Written exclusively for AmCham by Robbin Battison, Battison & Partners
Photo: Rob Nelson

 
Lars Thunell, IFC/World Bank, Björn Savén, IndustriKapital and Magnus
Sjöqvist, member of AmCham Board, welcome one of the guests.

With 3400 staff, over half of whom operate in 100 countries around the world, IFC offers investment, advisory and asset management services. With assets of $51 billion and loans and investments totaling about $22 billion, they are growing force in emerging economies. In the past six years they have seen a 21% compound growth rate in commitments and a 16% CGR in projects.

“There is a positive relation between development impact and financial results for our investments,” says Thunell. “We encourage and promote a lot of South-South development, and we also encourage business strategies where firms might sell major rights to US markets, but retain the rights to emerging markets themselves.”


Ingrid Berggren, BSCC, Marie Wallenberg, Hungerprojektet and Lars
Thunell, IFC/World Bank

On the advisory side, the IFC has a role in actively advising and coaching governments in cutting red tape for entrepreneurs. Doing business properly shouldn’t be prohibitively difficult. “The formal economy grows about eight times faster than the informal economy,” says Thunell. “And it pays taxes.”



“Another thing we are trying to do is to work with financial institutions on environmental and social standards for their operations,” Thunell adds. “Oil in Africa, for example, is about 80% state-owned. But those pushing development may propose things that might not benefit the country in the long run. We need more transparency.”



Filip Enocson, AmCham Sweden, had a question for Lars Thunell

IFC has also moved to strengthen local banks that play a critical role in the economic health of developing countries. The IFC Capitalization Fund provides additional capital for major banks so they can keep lending and supporting economic recovery and job creation. The fund makes subordinated loans to and equity or equity-linked investments in major private banks or in state-owned banks on a clear path to privatization. The $3 billion fund consists of a $1 billion IFC investment and $2 billion from the Japan Bank for International Cooperation.


“IFC has also provided a microfinance enhancement facility of $50 billion over three years,” adds Thunell. ”More than 100 microfinance institutions will receive needed refinancing, potentially benefitting 60 million low-income borrowers in the world’s poorest countries.”

Sweden, which has been a member of IFC since 1956, cooperates with IFC through the delivery of technical and advisory assistance, mostly mediated through Sida. For example, in Africa, Sweden and IFC cooperate in helping African companies become more sustainable and competitive by providing experienced managers and client-specific training to local work forces.
In Ukraine, recent efforts have helped dairy and vegetable producers increase their capacity and get better access to markets and finance.


 
 Fredrik Billing, DealFlower, and Robbin Battison, Battison & Partners


For further information, please see www.ifc.org

Biographical note: Mr. Thunell joined IFC after serving as CEO of SEB. He has also held executive positions at Trygg-Hansa, Nordbanken and Securum. His foreign postings include stints at ABB in Zurich and American Express in New York. He holds a doctorate from the University of Stockholm.