ENDING POVERTYAND BUILDING AND BUILDING SHARED PROSPERITYSHARED PROSPERITY

WORLD BANK GROUP

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Bedrijvendag

Internationale Organisaties

12 september 2013

Frank HeemskerkExecutive Director World Bank Group

Bank in a complex world

http://www.youtube.com/watch?v=cuOxBExprRsRight click ‘open hyperlink’

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Topics:

I.World Bank Group Governance

II.Africa’s Changing Image

III.IFC & MIGA

IV.Lessons learned on procurement

V.Q&A

21% 19%

4% 19%19%

LENDING BY REGIONFY12 COMMITMENTS IBRD + IDA

18%

WORLD BANK = BANK OF THE WORLD

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IBRD TOP BORROWERS FY12

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IDA TOP BORROWERS FY12

Member Countries(188)

Board of Governors(188)

Board of Directors(25)

President

World Bank Management and

Staff

Shareholders

Voting power: Netherlands: 2.05%

Constituency total: 4.25% (6th)

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Shared Mission: To Promote Economic

Development and Reduce Poverty

Shared Mission: To Promote Economic

Development and Reduce Poverty

IBRDInternational Bank for

Reconstruction and

Development

IDAInternational

Development

Association

MIGAMultilateral

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

IFCInternational 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

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World Bank GroupWorld Bank Group

Role:Role:

Clients:Clients:

Products:Products:

Africa’s Changing Image From Hopeless to Hopeful in 13 Years…

May 13th, 2000 July 15th, 2000 July 2nd, 2005February 24th, 2001 March 15th, 2008

December 3rd, 2011September 26th, 2009 March 2nd, 2013

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Africa: Policy makers tackling key challenges

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Challenges Remain, Impeding Investment and Growth

Major Growth Opportunities, Despite RisksImproving Macro Fundamentals, Demographics, Urbanization, Credit Growth

• Consumer Goods and Services– This sector will benefit most from the strong credit growth and domestic demand growth, particularly in larger markets with

urbanization and rising middle class (financial services, health, education, telecom / Internet)

– Car manufactures (low-cost producers and distributors)

– Retail (still highly informal, but shifting to formalized platforms)

• Housing– Rapid demographic growth and urbanization will increase the demand for housing and infrastructure

– Focus on construction and cement

• Agribusiness / Food– Soft commodities and cash crops bedrock of most African economies

– Although challenges in distribution channels remain, urbanizing middle class is driving demand

– Export of processed and semi-processed foodstuffs (horticulture, cut flowers) need to raise standards

– Investment and major job creation opportunities in inputs, finance, and beverage and food producers

• Financial services– Several key players from large economies (e.g. South Africa, Kenya, Nigeria) well placed for further continental expansion.

Attractive since majority of Africans remains unbanked or has limited access to financial services, even in large countries

– Mobile banking

• Infrastructure and Telecom– Africa lags behind in power, transport and sanitation

– Annual financing gap of more than US$50bn represents investment and PPP potential

– Despite growth in recent years, large development impacts remain given low penetration levels

• Extractive industries– New players in Africa (Guinea, Mozambique) and globally (China, Brazil) add new dimension to sector

– South Africa mining sector will go through a near-term slowdowns as the EM slows, but medium-term demand remains solid.

However mine productivity declining due to age, rising costs.

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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 FY13 US$24.8 billion

- Own Account - US$18.4 billion

- Mobilized - US$ 6.4 billion

# of Active Projects 1,737

# of Countries 129

# of Equity Investments 800

* As of 6/30/2013

IFC Commitments by Region

Largest global development institution focused

exclusively on the private sector in developing

countries

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109 country and regional offices worldwide - AAA

4,015 staff (57% are based outside Washington DC) 15

IFC’s Global Reach100+ country and regional advisory services offices worldwide

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

Paris

Singapore

Investment clients provided:

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• 2.7 million jobs

• Health services to 17.2 million patients

• Education to 1 million students

• Improved opportunities for 3.1 million

farmers

• Electric power to 52.2 million

• Water distribution to 42 million people

The Reach of IFC’s Projects—2013

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Fiscal Year 2013 Highlights

Investments: 612 new projects in 113 countries

Advisory services: $232 million in program expenditures

$24.8 billion in financing: $18.3 billion for IFC’s own account, $6.5 billion mobilized

$49.6 billion committed portfolio

IDA countries account for almost half of IFC projects overall: $3.5 billion invested in Sub-Saharan Africa

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FY13 Investment Commitments: $24.8 Billion

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22% growth from FY12 to FY13

Investments by Industry, FY13

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Commitments for IFC’s Account: $18.3 Billion

Investments by Region, FY13

Commitments for IFC’s Account: $18.3 Billion

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The Netherlands

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A Strategically Important Partner

IFC commitments with Dutch sponsors are large compared to similar sized European countries:

•As of August 2013, active IFC investments with 15 Dutch companies amounted to US$765 m (25 projects in 16 countries). GER: $1.04 billion FRA: $2,35 billion SWI: $956 million SWE: $81 million UK: $2,32 billion BEL: $87 million

•IFC works actively with Dutch commercial banks and FMO on syndications and co-investments.

Case Study I

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Tanzanian Brewery

• Tanzania Breweries was one of the first companies to be privatized under the Tanzanian Government’s economic reform program.

• IFC provided a loan of $18.4 million, including a $7.4 million syndication with participation from FMO, and an equity investment for Tanzania Breweries Limited to build a new brewery and to rehabilitate and upgrade the company’s existing breweries.

• The financing provided by FMO and IFC helped the company increase its output capacity and meet international health, safety, and environmental standards.

Case Study II

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Zambian Bank

• To increase access to finance for smaller entrepreneurs and agribusiness companies in Zambia, IFC provided a loan to Zambia National Commercial Bank PLC (Zanaco), which was privatized in 2007 and in which Rabobank holds a 46% stake.

• Zanaco used the $25 million senior loan from IFC to increase products and services that target small and medium enterprises, especially in the agricultural sector, and to expand its lending in less developed and rural regions of Zambia.

• The investment builds on an existing partnership in which IFC and Rabobank support Zanaco to train and increase access to finance for some of Zambia’s farmers.

Case Study III

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The Efficient Lighting Initiative

• Philips was actively involved with IFC in the Efficient Lighting Initiative from 2000 to 2004. This multi-country program was to support efficient lighting markets and to reduce greenhouse gas emissions associated with fossil fuel-fired thermal plant electricity generation.

• These initiatives lead subsequently to joint investment projects in Poland, Egypt, Brazil and Turkey.

• Currently, Philips is exploring further possibilities to cooperate with IFC.

Case Study IV

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Russian Dairy

• IFC's provided a US$10 million loan to Campina in 2005. This cooperation supported and comforted Campina in its first investment in Russia. It helped rejuvenate the Russian dairy industry by improving animal husbandry, employing the latest technology and raising quality to international standards.

• Campina obtained its fresh milk supply from local farmers; hence the country's agricultural sector has benefitted from the development of the dairy farming industry. To ensure adequate supply of high quality fresh milk, the company has also provided technical support to farms and has improved milk collection.

Case Study V

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Local Service Provision in India

• IFC and Dutch New Venture Partners took equity shares in Suvidhaa Infoserve Private Limited, a retail service aggregator, in order to support its expansion of services in India.

• Suvidhaa provides access to local services such as purchase of railway tickets, airline tickets, or mobile top-up, through its manned retail outlets with Suvidhaa application and PC. Its outlets also serve as collection points for many services such as utility bills and insurance premia.

• Investments by IFC and New Venture Partners will help Suvidhaa to further target the large bottom of the pyramid and non-internet savvy consumers who will benefit from the one-stop shopping and payment mechanism.

MIGA’s Strategic Priorities are:

•Supporting investments in the world’s poorest

countries

•Opening up difficult or frontier markets, especially in

conflict-affected countries

•Supporting complex projects in infrastructure and

extractive industries

•Promoting cross-border investments between

developing countries (South-South investment)

MIGA’s Strategic

Priorities

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MIGA insures against:

•Currency Inconvertibility and Transfer Restriction

•Expropriation

•War and Civil Disturbance

•Breach of Contract

•Non-Honoring of Financial Obligations

MIGA’s Products

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MIGA’s Highlights

Guarantees Issued (US$ Billion)

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MIGA’s Exposure

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WBG procurement review

Modernisation of procurement – 2014Not solely for WB funding - worldwide impact

Position Paper initiated by NL cosigned by CAN-FRA-

GER-UK-SPA-SWI; US aligned.•Procurement key to development

•Emphasis quality & value for money (MEAT)

•Transparency & level playing field

•Integrity: integrate combating corruption

•Appropriate complaints mechanisms

•Not one-size-fits-all: risk based approach

•Capacity building: in country and staff WBG

•NL has knowledge to offer: e.g. innovative PPPs

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• Local involvement is essential local contracts

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Lessons learned on procurement

• Partnering with the World Bank Group

requires Long Term strategic engagement

• Dutch Embassy in WashingtonDC as well as the

Executive Directors office can assist in initial

and/or end phase

Frank Heemskerk

Bewindvoerder Wereldbank

fheemskerk@worldbank.org

(+ 1) 202 458 2052/2053

Bedrijvendag Internationale Organisaties

Den Haag, 12 september 2013

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