Financing the Retail Sector in Emerging Markets

▪ About IFC

▪ IFC’s Experience in Retail

▪ IFC Solutions

▪ Annexes

Agenda

2

IBRD International Bank

for Reconstruction

and Development

IDA International

Development

Association

MIGA Multilateral

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

IFC International

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

Shared Mission: To Promote Economic Development and Reduce Poverty

3

IFC is a Member of the World Bank Group

Role:

Clients:

Products:

4

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 FY12* US$20.3 billion

- Own Account - US$15.4 billion

- Mobilized - US$ 4.9 billion

# of Active Projects 1,737

# of Countries 129

# of Equity Investments 800

* As of 6/30/2012

Take market risk with no sovereign guarantees

Promoter of environmental, social, and corporate

governance standards

Focus on development impact

What we look for from clients:

Commitment to project (equity)

Successful track record & long-term strategy

Integrity

East Asia & the Pacific

17%

Europe & Central

Asia 19%

Latin America

&the Caribbean

24%

Middle East & North Africa 14%

South Asia 8%

Sub-Saharan Africa 18%

FY12 Commitments by Region

Largest global development institution

focused exclusively on the private sector in

developing countries

Infrastructure & Natural Resources

Financial Markets

Manufacturing, Agriculture & Services

• Power

• Renewables

• Transport

• Utilities

• Oil & Gas

• Mining

• Sub-national

Finance

• Banking

• Sustainability and

Climate Change

Finance

• Private Equity/

Funds

• Housing Finance

• Insurance

• Microfinance

• SME Banking

• Trade Finance

• Securities Markets

• Agribusiness

• Forestry

• Healthcare &

Life Sciences

• Education

• Manufacturing

Industries

• Energy Efficient

Machinery

• Chemicals

• Tourism, Retail &

Property

Leveraging Global Industry Knowledge for Clients

5

14%

64%

22%

Infra & Natural Resources

Financial Markets

Manufacturing, Agri & Services

6

IFC’s Global Reach

Global Knowledge and Local access: more than 100 offices worldwide in 84 countries,

with over half of IFC’s 3,700 staff based in emerging markets

Owned by 184 member countries. Collaborate with the rest of the World Bank Group

Staff with specializations in financial services, industry, environment, corporate

governance, advisory services and more

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

Singapore

Senior

Debt

On-lending

Liquidity management

Acquisition financing

Warehousing facilities

Syndicated loans

Local currency financing

Partial credit guarantees

Securitization

Bond underwriting

Mezzanine

Finance

Convertible debt

Subordinated debt

Other Tier II instruments

Private

Equity

Common shares

Preferred shares

Syndication via IFC Asset

Management Company

Trade Finance

Global trade supplier

finance (GTSF)

Distribution finance

Global trade finance

program (GTFP)

Global trade liquidity

program (GTLP)

Critical commodity

finance program (CCFP)

Advisory

Services

Sustainable Business

Advisory, including:

―Food safety

―Hospitality training

―Corporate governance

Access to finance,

including housing finance

Investment Climate

Public-Private

Partnerships

Sustainable

Finance

Carbon finance

Renewable energy

Green building & energy-

efficiency finance

Supply chain financing

Corporate governance

financing

7

IFC’s Products and Services

Structured

Finance

Global Industry

Expertise

Long-term

Competitive

Financing

Capital

Mobilization

Country Risk

Mitigation

Regional

Knowledge

― Global investment team dedicated to tourism, retail and property sectors in

emerging markets

― Industry specialists on staff

― Green Building and energy efficient expertise and advisory services

― One-stop-shop for financing: equity, debt, structured finance, etc., based on

client needs

― Longer investment horizon and less cyclical than most financial investors:

up to 10-12 years, both equity and debt

― Reduced Political risk through government relations, preferred creditor

status, neutral broker role

― Withholding tax benefit

― Global and local presence in more than 80 countries with increase focus on

local presence and expertise

― Investment professionals in regional hubs and large country offices

― Advice on Environmental and Social Best Practices

― Equator Principles modeled after IFC Standards (60 international banks)

― Local Consultation and Disclosure

― Corporate Governance and Sustainability Toolkit

― IFC can mobilize funding: debt from commercial banks and other DFIs

(syndications), equity from investors (AMC), etc.

How IFC Differs from Other Partners

Environmental &

Social Risk

Management

8

▪ About IFC

▪ IFC’s Experience in Retail

▪ IFC Solutions

▪ Green Building

▪ Annexes

Agenda

9

10

Retail Sector Overview

Since 1956, IFC has invested over US$1.5 billion in over 65

retail projects in more than 30 countries

IFC has committed portfolio in retail of US$ 593 million

consisting of 37 projects with 28 clients in over 30 countries,

as of 06/30/2012

IFC supports international and regional retailers through the

provision of long-term financing (e.g., Schwarz Group in

Central and Eastern Europe), advisory services (food safety to

the Metro Group in Ukraine) and supplier finance (emerging

markets suppliers of Comercial Mexicana, Perry Ellis, Levi’s)

FY2012 IFC’s Outstanding Portfolio by Region 6% 1%

2%

57%

34%

Middle East & North Africa Africa

South Asia Central & Eastern Europe

Latin America & Caribbean

IFC’s Commitments from FY04-FY12

0

2

4

6

8

10

12

0

50

100

150

200

250

2004 2005 2006 2007 2008 2009 2010 2011 2012

# o

f Pro

jects

Com

mit

ment

($m

)

Commitment # of Projects

Supermarkets

Hypermarkets

Hard discount

Do-it-yourself (DIY)

Shopping malls

Warehousing & logistics

Apparel distributors

Electronics stores

Type of Retail financed

Selected Transactions in Retail Sector

US$7m Loan &

US$5m Quasi-Equity

$26m Loan Financed the development of 20

new supermarkets and 6

warehouses in Minsk and the

regions to improve access to high-

quality and affordable food

€40m Loan Supported the expansion of

Mercator’s operations in Serbia

and Bosnia-Herzegovina, part of a

broader strategy to become the

leading food retailer in Southern

Europe

Refinanced Savservice Center’s

short-term debt and increased

working capital needs and financings

to five operating subsidiaries

Ukraine 2009

2008 Belarus 2006 Serbia

11

2010 Ukraine

US$15m Loan &

US$7m Quasi Equity

Supported the development of new

do-it-yourself (DIY) stores in

regional cities in underserved parts

of Ukraine

Nova

Liniya

GTSF line of US$100m

Supplier finance credit line of

US$100 million approved for the

provision of short term financing to

the suppliers of Tiendas Comercial

Mexicana Mexico.

2012 Mexico

GTSF line of US$20m

Supplier finance credit line of

US$20 million approved for the

provision of short term financing

through the TradCard platform to

the suppliers of Perry Ellis in EM.

Asia 2012

2012 Asia

GTSF line of US$20m

Supplier finance credit line of

US$20 million approved for the

provision of short term financing

through the TradCard platform to

the suppliers of Levi’s in EM.

US$50m Loan

Accelerated the expansion of the

retail stores in Bogota and in the

interior of Colombia

US$50m Loan

Lending to leading apparel retail

franchise operator with 1,028 stores

in shopping malls in KSA, Egypt,

Jordan, Kazakhstan, and UAE

2011 Middle East 2008 Colombia

12

Selected Transactions in Retail Sector

US$50 million Loan &

US$90 million Parallel Loan

Financed the expansion Cencosud’s

retail business in Argentina,

including stores, a shopping mall

and department stores

2008 Argentina

Schwarz Group

€220m Loan &

€40 million Parallel Loan Financed the expansion KAUFLAND

in Bulgaria and LIDL in Bulgaria,

Croatia, Poland & Romania

2011

2009

2004

Central & Eastern

Europe

US$15m Loan

2000 Russia

Supported the construction of

IKEA’s first store in suburban

Moscow

Ramstore

US140m Loan

Development of shopping centers

anchored by Ramstore

hypermarkets

Year Russia

Kazakhstan

US$2 million Equity

Supported the expansion program

to add new stores to strengthen

its presence in the modern

wholesale distribution sector in

Indonesia

2000 / 2006 Indonesia

US$50 million Loan

Supported the expansion of the

company’s retail network in

Guatemala, Honduras and El

Salvador

2008 Central America

US$88 million Loan

Supported the expansion of stores

in all regions of Brazil, focusing in

the North, Northeast and Midwest

1995 / 2005 Brazil

US$52m Loan

Financed the store expansion of

Kaufland (hypermarket brand under

Schwarz) in Bulgaria and Romania

2010 Romania

Supported the expansion of

Wumart Stores in Beijing and

surrounding areas

2003

Wumart

US$ 7 million EQuity

China

▪ About IFC

▪ IFC’s Experience in Retail

▪ IFC Solutions

▪ Green Building

▪ Annexes

Agenda

13

Project / Subsidiary Finance

14

Long term project/subsidiary financing not available in local financial

market

Local currency financing to provide natural FX hedge

Comfort to penetrate new markets

Client Needs

IFC Solution: Long term financing at project/subsidiary level

Main Features

Financing up to 25% (greenfield)

or 50% (brownfield) of total

investment capex

Possibility to include working

capital financing

Sponsor support at least until

project completion

Possibility of equity investment

if there is strong growth strategy

and clear exit

Long Term funding -

Maturity and grace

period tailor to

project needs

Financing in US$, €,

and 30+ local

currencies

Diversified source of

funding available

across economic

cycles

Possibility to

mobilize additional

financing (syndicated

debt, equity funds,

etc.)

No withholding tax

World Bank Group

reputation

IFC Benefits to Clients

Parent

Country

Subsidiary Financing

Reputable partner to enter and expand in new markets

Sharing risk of emerging market expansion

Additional capital

15

Client Needs

IFC Solution: Debt, Equity and/or quasi-equity financing in holding for country or

regional operations

Main Features

Equity: IFC can invest up to 20%

equity (up to 49% with IFC

subsidiary fund), with exit

identified (IFC to be minority

investor)

Quasi-equity: high return

mezzanine/high yield debt

Corporate debt facility

dedicated to emerging markets

Client needs to keep at least 30%

of equity

Corporate / Holding Finance

Company

Country/Regional

Holding

Mexico

Debt, Equity &

Quasi Equity

Nigeria Other

EMs

Corporate

Debt Facility

World Bank Group

reputation

IFC has appetite for

emerging market risk

sharing

IFC stamp of

approval

IFC provides own

capital and mobilize

from other investors

through the AMC

IFC Benefits to Clients

16

Long term capital to support strategic acquisitions that drive outsize

growth and operational synergies

Reliable financing partner to support expansion in emerging markets

Opportunity to source additional capital through direct co-investments

into the acquisition target by the financing partner

Client Needs

IFC Solution: Equity and debt capital commitments to finance strategic

acquisitions in emerging markets

Main Features

Debt or equity financing for

strategic acquisitions in

emerging markets

Direct equity investments in

acquisition targets with strong

growth potential

Mobilization of additional capital

through AMC (IFC’s Asset

Management arm) for compelling

investment opportunities

Company

Target

Long-term

debt for Ivst

Capex

World Bank Group

reputation

IFC has appetite for

emerging market risk

sharing

IFC stamp of

approval

IFC provides own

capital and mobilize

from other investors

through the AMC

Broad suite of equity

and debt products

IFC Benefits to Clients

80%

Equity

Acquisition Finance

20%

Equity

A stable and reliable supply-chain requires adequately-financed suppliers

Short term financing is needed for small- and medium-sized suppliers

with limited banking relationship and credit lines

17

Client Needs

IFC Solution: Short term supply chain financing

Main Features

Financing without-recourse and

unsecured basis to suppliers

Discount of invoices accepted

for payment (post-shipment &

post acceptance) by pre-

approved buyers

Market-based pricing

Tenors up to 180 days

Click-through agreements among

buyers, suppliers, platform and

IFC

Improve treasury

position and financial

strength of suppliers.

Does not use credit

lines with

relationship banks

IFC can either work

through an

independent or bank-

owned platform

Provide specialized

on-boarding/training

for suppliers

IFC Benefits to Clients

Global Trade Supplier Finance (GTSF)

Selected Buyers Selected Platform

18

Global Trade Supplier Finance (GTSF)

Alternatively, IFC can provide funding or guarantee coverage

through a Partner Bank

1 2

5

b

1 2

3

b

Financier pays

discounted

invoice amount

Supplier views and

requests early payment

for approved invoices

Buyer Independent SF

IT Platform

Buyer uploads approved

invoices, providing irrevocable

payment obligation (automated

process, post shipment)

1 2

Buyer pays full invoice

amount on due date

(standard payment

routines)

3

Emerging Market

Suppliers

4

Financier accepts

early payment

requests

5

19

Global Trade Supplier Finance (GTSF) & Better Work (BW)

Better Work (BW) is a partnership program between IFC and

ILO (International Labor Organization) that combines the

expertise of ILO in social dialogue and the application of labor

standards with those of IFC in private-sector development.

Better Work conducts compliance assessments to evaluate if

factories are adhering to ILO Core Labor Standards and

national labor laws. Following assessment, BW also provides

tailored advisory and training programs to support continuous

improvement over time, with regular reporting to

international buyers.

BW is active in 7 countries (Cambodia, Haiti, Jordan, Lesotho,

Indonesia, Vietnam and Nicaragua) and works with over 40

global apparel brands and retailers who are interested in

managing labor risks in their supply chains in an efficient

manner. Buyers in the BW program agree to rely on BW labor

compliance assessments, as well as support a common

improvement plan which help reduce redundant labor audits.

Suppliers who are participating in Better Work and meet a

minimum threshold of E&S compliance are eligible for GTSF.

The best performing suppliers in terms of E&S standards are

even eligible for a preferential pricing under the GTSF facility.

Buyers Active in include:

Food Safety: a Critical Issue for Retailers

20

Suppliers with strong food safety = sustainable partners for retailers

higher quality products

better managed supply chain risks

lower costs (reduced waste)

less recalls

stronger brands

•Retail supply chain risks are managed with robust food safety based on HACCP (*)

Supply chain risk

management

•Retailers require higher standards than governments since they have direct contact with the consumer

Retailers have higher standards

Food Safety: IFC’s Program

21

1. Companies of various levels and

industries

2. Step-by-step upgrade

3. Training and site visits

4. Optimal price-quality ratio

5. Measureable results in six

months

Initial assessment (1 day)

Training (2 days)

On-site consultations (1 day)

Final assessment (1 day)

Module structure Three modules of

the Program Why it is good for suppliers

Gradual achievement of international standards

IFC

•Manages delivery & quality

•Reports on results

Retailer

•Ensures commitment

•Involves suppliers

•Arranges logistics

Suppliers

•Higher sales

•Lower costs

•Better business opportunities

How it Works? Key Characteristics

Developed by the Global Food Safety

Initiative (GFSI)

Piloted for two years with

in Ukraine and Kazakhstan

Tailored for developing countries

Proven results: assessment scores

increased from 49% to 93% in < 6 months

▪ About IFC

▪ IFC’s Experience in Retail

▪ IFC Solutions

▪ Green Building

▪ Annexes

Agenda

22

• Climate change is a pillar of IFC’s strategy. IFC looks at climate change

aspects across all the industries it invests in. TRP targets 50% of all

projects to be green

• IFC has vast experience with Green Buildings, which can add significant

value to the its clients. IFC can assist during various stages of the

project, namely from the design of the new building with green

characteristics to the financing of retrofitting existing building project

Why Green Buildings?

IFC experts can provide:

Clients with valuable advice in converting

existing facilities to green buildings

Explore opportunities which reduce the cost

of operation thus impacting the bottom line

Complying with international standards in

terms of emissions and energy and water

use

23

IFC’s Experience with Green Buildings

Climate Change: a strategic pillar

IFC Assistance

24

EDGE: Excellence in Design for Greater Efficiencies

IFC developed a green buildings classification system

designed for emerging markets:

EDGE is a tool that reveals technical solutions for

going green and captures capital costs and

projected operational savings.

EDGE can be used by building professionals without

the need for expensive green building specialists.

Specifications

EDGE has contextual data of utility costs and

climate for different cities

EDGE uses building physic calculations to give

design-specific results

EDGE spells out the most effective technical

measures

EDGE provides an investment planning tool for

building owners and developers

IFC’s EDGE Tool

EDGE applied to Hotels

The EDGE Standard:

‘A greenfield building that has 20% less energy,

water and material consumption compared to an

equivalent local benchmark.’

25

EDGE’s Energy & Water efficiency measures

Hotel example

26

Example of IFC’s Green Building Advisory for Retail

IFC identified the following potential energy saving

opportunities in future retail stores in Eastern Europe:

The above measures are estimated to save an additional 22% of energy use and 30-40% of the energy

bill compared to the current proposed store design.

• Photo electric sensors to switch off perimeter

lights in front of the window during day time

• Installing ‘light pipes’ to utilize daylight in area

where spot or focus lighting is required

• Low energy display lights [LEDs] in fridge and

freezers

• Adding Variable speed drives [VSDs] to

modulate fans based on CO2 level in the store

• Increasing the roof and wall insulation [ U-

value of 0.15W/m2.K]

• Using ground source heat pumps for heating

and cooling

• Adding solar photovoltaic panels [up to 25% of

the roof area] to generate electric

• Specifying gas ovens instead of electric ovens.

Although the switch to gas will not save energy, it

is estimated to reduce 13 tonnes of CO2 emissions

and $3000 each year

Minor modifications

Low carbon measures

High impact measures

Predicted Energy use

kWh/m2/year

Additional

22%

Reduction

Project Case: Retail stores, Eastern Europe

Maldives:

1. Shangri-la Hotel (energy efficiency) CPLP: US$1.5 M Loan 2. Universal Hotel (energy efficiency) CPLP: US$2.5 M Loan

Colombia:

City Express LEED certified Hotels US$37.1 M Loan

Mexico :

1. Optima Energia (ESCO - energy /water efficiency in hotel sector) US$10 M Loan 2. Artha Capital First example of a “Green Building” element in a Property Fund. US$25 M Equity

Ghana :

Actis RE Fund (Green rated construction) US$25 M Equity

Jordan:

Zara (energy efficiency and solar panels) CPLP: US$1.8 M Loan

Rwanda:

MSC Kigali (Green Building Shopping Center) US$10 M Loan & US$3 M Equity

Mali :

Ashesi University (use of biogas) US$2.5 M (0.2 M Loan (*)

Gambia:

Coco Ocean (Hotel – energy efficiency) € 6M Loan (*US$0.2 M)

Note (*) financing for climate friendly project; was part of a larger total IFC investment

Romania:

Lidl Stores (high insulation, heat recovery ventilation, and low-energy lighting) US$67.5 M Loan

IFC’s Experience with Green Buildings

28

Key IFC Contacts

Olaf Schmidt Global Sector Head -Tourism, Retail, & Property

Tel: +33-1-40-69-33-62

Email: Oschmidt@ifc.org

Brendan Dack Principal Industry Specialist - Retail

Tel: +1-202-458-9757

Email: Bdack@ifc.org

Donald Nzorubara Senior Investment Officer - Retail

Tel: +1 202 458 0147

Email: DNzorubara@ifc.org

▪ About IFC

▪ IFC’s Experience in Retail

▪ IFC Solutions

▪ Green Building

▪ Annexes

Agenda

29

IFC’s Project Cycle – a 3-Step Process

Mandate Investment

Committee Disbursement

Discuss project

Agree on product(s)

and main terms

Early decision from

IFC management

Due diligence & site

visit, assessing:

Business operations

& potential

Financial &

economic soundness

Environmental &

Social (E&S) aspects

Risks & opportunities

Public disclosure

Finalize term sheet

with client

Board consideration

and approval

Crafting and signing

legal documents

Bi-annual reporting

on financial, E&S,

and development

impact indicators

Early Stage Appraisal Final Negotiation Portfolio Supervision

30

1 2 3

What is important about IFC to a company, by size and location

What IFC brings to an investment Multinational Regional Local

Quality stamp of approval

Country risk mitigation

Exposure to country risk volatility

Good contacts/knowledge

Competitive cost

Long tenors

Access to local currency funding

Complementary funding source

Always Often Sometimes

31

IFC Customer Profile: Multinationals, Regional and Local

Participants

IFC Borrower

Loan Agreement

A + B Loans

B Loan Participation

Agreement

32

Mobilizing Financing - Syndication “B-Loan” Structure

A loan is for IFC’s own account

B loan is for the account of participant

commercial banks

Only one loan agreement signed by the borrower

and IFC

IFC is the lender of record for the entire loan

(A+B)

Structure allows participants to benefit from IFC

privileges and immunities

Better pricing/tenors than otherwise available;

preferred creditor access to foreign exchange

IFC Loans exempt from withholding taxes

1 Unicredit 687,408,761

2 Société Générale SA 532,386,356

3 ING 455,469,316

4 DnB NOR 373,353,589

5 KFW Ipex Bank GmbH 319,848,830

6 Credit Agricole 316,536,832

7 Santander 300,725,702

8 WestLB/Portigon AG 290,716,408

9 Cordiant 278,624,455

10 BNP Paribas 271,630,886

Committed Portfolio

as of June 30, 2012 US$

IFC’s Asset Management Company (AMC)

• Focused on equity and subordinated debt investments in commercial banks in emerging markets

IFC Capitalization Fund (2009) US$3 billion

US$1.3bn equity & US$1.7bn sub-debt funds

• Focused on equity and equity-related investments in African banks

Africa Capitalization Fund (2010) US$182 million

• Focused on equity and equity-related investments across all sectors in Sub-Saharan Africa, Latin America and the Caribbean

IFC African, Latin American & Caribbean Fund (2010)

US$1 billion

• Focused on equity and equity-related investments in commercial banks, banks holding companies and other bank-related investment vehicles in Russia.

IFC Russian Bank Capitalization Fund (2012)

First Close: US$275 million

Selected AMC Investors

AMC is a wholly owned subsidiary of IFC, established in 2009, to manage third-party capital in a

private fund structure, which co-invest in a subset of IFC investments

AMC manages US$4.5 billion of assets in four private equity funds and has committed

approximately US$1.6 billion in 24 investee companies as of July 2012

33

Local Currency Financing

34

Long-term loans available in the

following Emerging Markets:

Asia:

Chinese renminbi

Hong Kong dollar

Indian rupee

Indonesian rupiah

Korean won

Philippine peso

Thai baht

Vietnamese dong

Europe:

Kazakh tenge

Polish zloty

Romanian leu

Russian ruble

Turkish lira

Africa:

Botswana pula

Ghanaian cedi

Kenyan shilling

Nigerian naira

Rwandan Franc

South African rand

Tanzanian shilling

Ugandan shillings

Zambian kwacha

Middle East:

Egyptian pound

Moroccan dirham

Pakistani Rupee

Saudi riyal

UAE dirham

As of July 31, 2012, IFC has committed over US$8 billion

equivalent of local currency loans in 33 currencies

Latin America:

Argentine peso

Brazilian real

Chilean peso

Colombian peso

Mexican peso

Peruvian soles

East Asia 23%

Europe and Central Asia

17%

Latin America 36%

Middle East and North

Africa 0%

South Asia 14%

Sub-Saharan Africa 10%

Senior Debt

&

Equivalents

Equity

Mezzanine /

Quasi Equity

Long-Term Financial Products:

A one-stop-shop from Equity to Debt

Corporate and JV

Typically 5-15% shareholding (not to exceed 20% of total equity)

Long-term investor, typically 6-8 year holding period

Not just financial investor, adding to shareholder value

Usually no seat on board

Infraventures (early equity investments)

35

Subordinated loans

Income participating loans

Convertibles

Other hybrid instruments

Senior Debt (corporate finance, project finance)

Fixed/floating rates, US$, Euro and local currencies available

Commercial rates, repayment tailored to project/company needs

Long maturities: 8-20 years, appropriate grace periods

Range of security packages suited to project/country

Mobilization of funds from other lenders and investors, through co-financings, syndications, underwritings and guarantees

IFC’s Performance Standards: A Tailor-Made Process

36

P1. Social and environmental assessment and management systems

P2. Labor and working conditions

P3. Pollution prevention and abatement

P4. Community health and safety

P5. Land acquisition & involuntary resettlement

P6. Conservation of biodiversity and sustainable natural resource management

P7. Indigenous peoples

P8. Cultural heritage

IFC’s Performance Standards

No need to meet all 8 standards upfront – only a few of them apply to most projects and

most clients meet many of them already

In areas in which clients do not already profit from international best practice, we agree on

a flexible action plan and guide them through the process

Implementation process is tailored to client’s particular situation

Business lines Service Description Clients

1 Clean Energy

Increase investment flows into clean energy by demonstrating the commercial

viability of and removing specific barriers to the scale-up of RE technologies

that reduce GHG emissions and increase access to energy services for the poor.

1) Renewable energy firms

2) Manufacturers and suppliers of clean

energy products and services

2

Environmental,

Social & Trade

Standards

Improve social and environmental performance of firms in specific key sectors

and commodities by helping them set, adopt and deploy internationally-

recognized environmental, social and trade standards, as well as increase

market access of firms.

1) IFC investment clients and potential

clients,

2) third party service organizations

(auditors),

3) Standards-setting bodies & sector

organizations

3 Farmer & SME

Training

Enhance the ability of SMEs and Farmers to increase revenues and expand

access to growth markets by strengthening their management capacity

(financial literacy, business acumen) and technical skills (farmer productivity)

IFC investee companies (corporates and

financial institutions) and intermediary

organizations that reach SMEs and farmers

4 Resource

Efficiency

Increase investment flows into resource efficiency (i.e., the efficient use of

energy, water, materials) by offering relevant business solutions to IFC

investee clients and others in related sectors, combining firm-level

interventions with broader engagement at the sector/market level

IFC investee companies, sectoral

organizations, vendors and service

providers, relevant regulatory bodies

5

Strategic

Community

Investment

Increase community investments which enhance social, environmental, and

economic benefits where IFC has investment interests

IFC investee companies, local service

providers/NGOs, industry (sector)

organizations, municipalities (with sizable

revenue flows).

6

Sustainable &

Inclusive

Investing

Mobilize institutional capital into sustainable and inclusive equity investment

funds and indices by helping: (1) companies articulate, (2) investors recognize,

and (3) markets reward sustainable and inclusive business practices

Pension funds, private equity firms, industry

associations

7 Corporate

Governance

Increase the ability of markets and firms to attract and retain investment by

promoting the adoption of corporate governance best practices and standards.

Companies/Financial Institutions,

Institutions (Institutes of Directors,

Corporate Governance Centers, DFIs,

Governments, Regulators)

IFC Sustainable Business Advisory - Products

37

Disclaimer: This summary has been prepared to facilitate the discussion of

certain basic terms and conditions of IFC’s proposal. All figures, terms, and

conditions are subject to change. Only the legal documents as finally

executed will contain binding terms and conditions. The summary of

indicative terms does not constitute a contract or an offer or a commitment

by IFC. IFC’s decision to invest in the project is contingent on approval by

IFC’s management and Board of Directors and execution of final

documentation in form and substance satisfactory to IFC.

38