Driving towards Impact through Development Goals Washington, DC 04/13/2011

Question from Shareholders What development results can IFC achieve with a given resource?

The Path To Development Goals From ex-post evaluation at maturity To ongoing tracking throughout the project cycle To forward looking Development Goals 3 IEG - In-depth sample analysis - Once in a lifetime - Independent of management - Accountability focused DOTS & AS Monitoring System - All operations - Ongoing tracking - Within management - Learning focused Development Goals - For increased strategic focus - For management decision- making on new business

Time Line December 2009: IFC’s Management Team agreed to explore a set of corporate development goals March – April 2010: The IFC FY11-13 Road Map “Maximizing Impact, Unlocking Our Potential”, which included a brief description of plans for the IDGs, was discussed with CODE and subsequently the Board, which expressed support for the concept of development goals. May 2010: The Management Team agrees on six areas to pilot September 2010: The Development Impact Department (CDI) was created and mandated to manage IDG implementation February – April 2011: CDI conducted focus group discussions with staff to gather emerging lessons

IDG Objectives To shape our strategy by the development results we want to achieve. To create a framework for IFC’s three pillars – investments, advisory services and Asset Management Company – to work together towards shared goals. To provide clear and measurable indicators of our progress in terms that staff and stakeholders find credible and meaningful. 5

Philosophy Focus on areas of clear development needs where IFC can make a difference Consistent with IFC’s five Strategic Focus Areas Areas where IFC can meaningfully measure results – not all priorities are amenable to IDGs Complements other strategy tools (e.g. focus on IDA/Fragile States) Start with areas where we have sufficient track record for meaningful pilots

Practical Principles 1.Small number of Goals, to be useful as a strategic tool:  would not cover all aspects of IFC’s activities. 2.Goals should be useful as input to operational decision-making;  global numerical targets disaggregated to regional level. 3.Wherever feasible, IDGs should not increase time or cost burden on IFC or clients:  When possible, use indicators already tracked in results measurement systems. 4.Balance objective of large global numbers with need to meet priorities of all client countries, including smaller economies.

8 IDG Methodology Based on incremental reach, rather than reach of outstanding portfolio or clients’ reach at the time we engage. Based on expected reach at time of project signing, subject to ex-post validation. Attribution of results to IFC subject to clear rules based on our role: IS - only 100% count if IFC has significant stake, smaller contributions prorated. AS - depends on business line and project size. AMC investments and syndications treated like IS investments.

Implementation Rolling global numerical targets for three year periods, analogous to IFC’s global commitment targets. IDGs to be integrated into strategy process. Global targets to provide framework for targets set in individual projects  Counted at time of commitment / signing of client agreement. We track whether project level contributions to the IDG targets are achieved over time Goals are expected to be linked to IFC incentive system and resource allocation

FY11-12 Implementation Rollout Test Five questions: 1.Have we selected the right Goals? 2.Have we agreed appropriate numerical targets? 3.Have we established appropriate methodologies? 4.Are the underlying data capture, tracking and reporting systems adequate? 5.How can we best use the IDGs in operational decision-making?

Summary of IDG Targets Agriculture - Increase or improve sustainable farming opportunities for over 200,000 people Health and Education - Increase or improve access to health and education services to over 6.3 million people (broken down to targets for health and education customers) Financial Sector - Increase access to financial services to over 5.8 million microfinance clients and 3.1 million SMEs Infrastructure - Improve infrastructure services to over 110 million people (broken down to targets for utility, transportation and telecoms customers) MSMEs - Help MSMEs to increase their revenues by US$23.6 billion Climate Change (interim goal*) - IFC’s interim goal was to make 20-25% of its investments climate-positive by the end of FY13. *We are now piloting an expanded goal to avoid and reduce greenhouse gas emissions, while also steering our investments towards activities with a lower carbon footprint. 11

Upcoming developments and feedback Piloting ‘normalized’ measures to better reflect IFC’s contribution in smaller and poorer countries  % of population served  % of infrastructure capacity addition Exploring goals or complementary tools for  Jobs created  IFC’s contribution to economic growth  Investment Climate work Proposed revisions to IDGs  Agriculture: Include more of the agribusiness value chain, consider food security contribution  Financial Services: Include other financial products, such as deposits, insurance, etc.  Infrastructure: Increase the focus on situations where IFC has meaningfully contributed to increasing the quality of infrastructure services  MSMEs: Expand MSME goal beyond MSME revenues