IFC Donor Funded Operations Presentation to Norwegian Dialogue May 13, 2004

1. International Finance Corporation IFC Donor Funded Operations Presentation to Norwegian Dialogue May 13, 2004

2. IFC’s Donor Funded Operations (DFOs) In addition to the Technical Assistance Trust Funds Program (TATF) IFC programs supported by Donors include: • Regional SME Facilities • Sustainable Business Assistance Program • Advisory Services including: • Foreign Investment Advisory Services (FIAS) • Private Sector Advisory Services (PSAS) • Private Enterprise Partnership (PEP) in FSU/Mongolia • Financing Facilities – Iraq SBFF and Balkans Infrastructure • Norway/Bank Group TF for Private Sector and Infrastructure

3. IFC-Managed SME Facilities • Program has more than doubled in last 3 years (new one in the Middle East – PEP-ME covering Yemen, Iraq, Afghanistan and West Bank/Gaza) • $31 million annual operating budget (IFC funds matched 4:1) • 90% of countries served are IDA eligible

4. SME Capacity Building Facility • Supports pilots and partnerships • Incubator role broadens WBG’s SME products • $7.1 m annually from IFC net income (Approx 70 active projects) • Tool for building relationships with outside partners, leveraging them to benefit WBG operations (ACCION, FUNDES, SWISSCONTACT, SEWA, etc)

5. IFC’s Sustainable Business Assistance Program • Objective – Expand IFC’s support for environmental and social sustainability • Address 3 core areas of IFC’s work: • Consistent with key Johannesburg commitments to improve the quality of people’s lives: • Cross-cutting issues: “actively promote corporate responsibility and accountability” • Pollution, water and sanitation, biodiversity, clean energy • Total funding needed of $55 m over 5 years of which IFC will contribute $10 m

6. Corporate Citizenship Facility (CCF) • Support IFC clients and wider private sector where there is a demand for assistance in three areas: • Engaging with stakeholders • Community development, consultation and engagement, distribution of benefits, local economic growth • Employees and employment • Employment practices, HIV / AIDS, employee ownership • Environmental stewardship • Footprint, externalities, global impacts

7. Improve the capacity of IFC’s financial intermediaries to operate in an environmentally and socially sustainable manner Strategically support and influence the sustainability agenda in the broader financial community Sustainable Financial Markets Facility (SFMF) Core Objectives Enhance the environmental and social development impact of IFC’s investments in and via financial intermediaries Help the financial sector to use sustainability as a tool to build better businesses and increase long-term competitiveness Increase the quality and amount of environmentally and socially responsible investment in developing countries

8. Environmental Opportunities Facility (EOF) • Focus on innovative projects that generate primarily local environmental benefits • Overcome uncertainty associated with new markets,new business models, and new technologies • Two types of support: • Project Preparation -- Grant funding for preparation of business plans, market assessments, etc. • Investment Funding – Flexible financing products: • Market-rate funding for risky, small ventures • Concessional financing tailored to innovative projects • Seed capital for post R&D technologies and project developers • Emphasis on partnerships with financial intermediaries, local institutions, multilaterals, bilaterals

9. IFC Advisory Services • Foreign Investment Advisory Service (FIAS) • Founded in 1985 • Works only at request of client government • IFC and World Bank contribute 35-40% of funding • Private Sector Advisory Services (PSAS) • Advisory and Transaction specialists • Lawyers, Technical, Environmental, Social, Marketing, Auditing

10. Private Enterprise Partnership (PEP) in the FSU • IFC TA in the FSU region began with the creation of the private sector through privatization and land reform in 1991 • In May 2000 IFC’s Board approved the creation of PEP to expand IFC’s TA in the FSU work on: • Promoting private sector investment with emphasis on foreign direct investment (FDI). • Supporting the growth of SMEs, particularly through building viable financial intermediaries. • Improving the business enabling environment, with emphasis on corporate governance • In October 2002 IFC’s Board reviewed the progress of PEP and extended it through 2006

11. Norwegian TF for Private Sector and Infrastructure • NTF-PSI covers Bank Group • Established August 2002 • Designed to: • Align Norwegian priorities with Bank Group Private Sector Development Strategy (PSD) • Improve dialogue between Norway and the Bank Group on PSD • Improve coordination between Bank and IFC on PSD initiatives • Efficiently and transparently allocate Norwegian support of PSD activities in the Bank Group including global/regional PSD programs

12. Norwegian TF for Private Sector and Infrastructure • Initial funding of $7.1 Million • Second year funding of $8.0 m • Third Year…. • Call for Proposals targeting: • Investment Climate and Governance • Infrastructure Service Delivery to the Poor • Existing global/regional programs • Screening Criteria: • 50% of the funds for Sub-Saharan Africa • Poor Countries – Bottom three categories of ODA DAC list • Fit with Norwegian priorities and PSD Strategy

13. Contact and Reference Links IFC TFs - Fred Wright, Principal Project Officer, CTATF Telephone: 202-473-6076 E-mail: fwright@ifc.org NTF-PSI Marianne Bergstrom, Operations Officer, INFCS Telephone: 202-473-O630 E-Mail: mbergstrom@worldbank.org External web sites: www.ifc.org and www.worldbank.org IFC Annual report on DFOs www.ifc.org/tatf SME Facilities www.ifc.org/sme Environmental and Social Facilities www.ifc.org/enviro Private Enterprise Partnership www.ifc.org/pep FIAS www.ifc.org/fias NTF-PSI – http://wbln0018.worldbank.org/infrastructure/ntfpsi.nsf