1. International Finance Corporation May 2013 Istanbul
Giovanni Daniele
Manager, Manufacturing & Chemicals
Europe, Middle East and North Africa

2. Table of Contents IFC Overview
Financing Needs in Emerging Markets and ECA: Risks & Opportunities
IFC in ECA: results to date and strategy going forward
IFC Value Proposition: how IFC can facilitate investment
IFC Project Cycle
IFC Teams and Contacts

3. Who We Are, What We Do
IFC is the largest global development institution focused exclusively on the private sector – the global leader in private sector development finance
We invest, advise, mobilize capital, and manage assets – providing solutions for an inclusive and sustainable world
The World Bank Group consists of five closely related institutions:
IBRD: The International Bank for Reconstruction and Development, IDA: The International Development Association, IFC: International Finance Corporation, MIGA: The Multilateral Investment Guarantee Agency, ICSID: The International Center for the Settlement of Investment Disputes

4. IFC’s Structure Owned by 184 member countries
IFC is the main driver of private sector development in the World Bank Group
Collaborates with other members of the group, including the World Bank (IBRD and IDA, MIGA and the International Centre for Settlement of Investment Disputes)
Global: Headquartered in Washington, D.C.; Operating Center in Istanbul, Turkey
Local: More than 100 offices worldwide in 95 countries

5. IFC’s Three Businesses
IFC Asset Management Company
Investment
Services
Advisory
Services
Loans
Equity
Trade finance
Syndications
Securitized finance
Blended finance
Access to finance
Sustainable Business
Investment Climate
Public-Private Partnerships
Wholly owned subsidiary of IFC
Private equity fund manager
Invests third-party capital alongside IFC
Originally known mainly as a project finance specialist, today IFC has three distinct businesses: Investment Services, Advisory Services, and Asset Management.
These are rolled out on a global-local delivery platform, combining global knowledge of industry, markets, and risk management from our Washington HQ with the understanding of local markets that comes from our strong field presence.
All of these businesses fit together seamlessly and have synergies with each other. No matter which side we are drawing on at any one time, we measure ourselves just as much by our development impact as by our financials. And we are committed to rigorous results measurement.
We work with strong global network. For example ,we currently have more than 1,500 client companies in our portfolio, including more than 300 banks and other financial institutions, and more than 150 investment funds. They are major players in development, as are our donor partners: 32 bilateral governments as well as other significant funding sources such as the European Union, the Bill and Melinda Gates Foundation, and others.
This allows us to help governments with business-friendly policy advice, companies with corporate advice, in addition to our traditional investment role.
$4.5 bn under mgmt
$56.5 bn portfolio
$200 mn per year

6. The Reach of IFC’s Projects (FY12)
Despite the challenging economic context, IFC invested a record $20.3 billion for the year
Last year our clients provided:
2.5 million jobs
$200 billion in micro, small, and medium enterprise loans
12.2 million patients with health care treatment
34.3 million people with clean water
41.9 million people with power connections
900,000 million students with education

7. Investments by Region, FY12
19% of IFC’s total business is in ECA
Commitments for IFC’s Account: $15.4 Billion
Global >1%
Sub-Saharan Africa 18%
Middle East and North Africa 14%
East Asia and Pacific 16%
Latin America and the Caribbean 24%
South Asia 8%
Europe and Central Asia 19%

8. Growing Financial Needs for EM globally
Financing Needs: EM’s as a whole did not face financing needs in the period, but will be facing needs of around $600bn in 2013 – a 68% increase relative to Financing needs are projected at $1trillion for 2016.
Financing needs in non-IDA countries switched drastically from a surplus in to a deficit of $393bn in 2013 and a projected deficit of $824bn in 2016.
Capital Flows: Debt and equity flows to EM’s have already recovered to pre-crisis levels, and are projected to keep increasing towards $1.5 trillion by 2016, mainly driven by FDI flows, bond issuance and bank lending.
Reserve Accumulation is expected around $350bn per year in the period, well below its peak of over $1.3 trillion in 2007.

9. ECA and LAC face the largest financing needs
ECA and LAC face the largest financing needs among EM. In both regions, these needs are projected to increase significantly further in the coming years – financing requirements may reach $508bn in ECA in 2016 (vs. $377bn in 2013), and $330bn in LAC (vs. $273bn in 2012). In any case, projected capital flows are expected to close these gaps and allow further reserve accumulation each year in both regions . Global or regional shocks may affect investor’s confidence and impact the projected levels of capital flows.
• While the MENA region as a whole will keep running surpluses of over $100bn per year (despite large within-region differences) , the historic surpluses in EAP are declining fast and are projected to turn into deficits in – driven by China. The EAP region may face financing needs of $111bn in 2016 (vs. a surplus of $137bn in 2012).
• Needs in Africa are expected to jump from $43bn in 2012 to around $50-52bn in , and would remain relatively stable around $140bn in South Asia in

10. ECA Financing Needs: largest countries

11. Investing in ECA: risk & opportunities going forward
Coming out of a very difficult period, a number of markets seem to have a more favorable outlook; growth in ECA at around 4 percent is higher than world average
Financing needs remain large (and growing) and this poses a key risk for the region
Given low portfolio flows, attracting FDI and bank flows is critical, so is the role of IPAs
Exposure to EU markets remains a concern
Need to focus on competitiveness and increase productivity
Opportunities for sector consolidation and regional expansion by industry leaders

12. IFC in ECA
IFC has been contributing to the development of the private sector in ECA for over 45 years.
IFC’s five largest exposures are in Turkey, Russia, Ukraine, Romania and Serbia. Turkey is IFC’s fourth largest client in terms of committed portfolio.
We have offices in 21 countries in ECA
In the ECA region, since 2008 IFC invested $13.4 billion in 560 projects and mobilized $5.4 billion through other financial institutions.

13. In 2010, IFC Launched Istanbul Operation Center (IOC) IFC’s First Operations Center in Istanbul to Serve EMENA Region
The IOC, with 195 staff, is at the center of a network of regional, sub-regional and smaller country offices,
integrated with Washington DC
and working to serve the needs of the EMENA region…
… to deliver a program of over US$6.8 billion in total investment (own account and mobilization) in 171 projects and US$53 million in Advisory Services. (FY12 results)

14. IFC Annual Commitments in ECA, $mn
IFC Portfolio in ECA
IFC Annual Commitments in ECA, $mn
(as of February 28,2013)
ECA Committed Portfolio, $mn( as of March 31,2013)
670

15. IFC Sector Priorities in ECA
SMEs for jobs, economic diversification and higher equality
Agribusiness for food safety and
Infrastructure & Energy
Climate-smart investments
South-south investment
Health & Education
Supporting regional champions to foster regional integration and productivity growth

16. How IFC can facilitate investment
Provide political risk mitigation
Long-term tenors
Global expertise combined with local knowledge
Ability to mobilize LT capital (including equity through AMC)
Advisory services
Equity
Honest broker role
Encouraging adoption of environmental best practices
Long-term relationship across emerging markets workldwide

17. IFC’s Investment Guidelines
Committed and reputable sponsors with established track record in the industry
Ability to assume project completion risk
Sound market fundamentals: favorable supply/demand outlook also taking into consideration new capacity
Cost competitiveness
Absence of market distortions
Prudent capital structures
Adequate risk/return profiles
Sound corporate governance

18. We agree on a specific timeline to meet client’s needs
IFC’s Project Cycle
Early Review
Client needs determined
Assessment of project’s impacts and development contributions
Management committee approval
Mandate letter
Due Diligence
Assessment of business opportunities and risks
Analysis of environmental and social opportunities and risks
Appraisal
Credit committee approval
Disclosure
Disclosure of environmental and social information
Opportunity for public comment
Commitment and Disbursement
Negotiation and agreement of principal terms
Board approval
Signing of legal documents
Disbursement
Negotiation
Monitoring
Annual review of project performance
We agree on a specific timeline to meet client’s needs 18

19. How We Finance Projects
Project Type
IFC Investment
Greenfield, total cost less than $50 million
Greenfield, total cost more than $50 million
Expansion or rehabilitation
Up to 35% of project cost for IFC’s account
Up to 25% of project cost for IFC’s account
Up to 50% of project cost
Umbrella for participants in IFC’s syndication program: IFC lender of record, immunity from taxation and provisioning requirements.
IFC’s total financing (for its own account) must be less than 25% of total company capitalization

20. Financial Products - From Equity to Debt
Senior Debt
& Equivalents
Equity
Mezzanine / Quasi Equity
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: years, appropriate grace periods
Range of security packages suited to project/country
Mobilization of funds from other lenders and investors, through
cofinancings, syndications, underwritings and guarantees
Subordinated loans
Income participating loans
Convertibles
Other hybrid instruments
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)

21. IFC Borrower Participants
Mobilizing Financing - Syndication “B-Loan” Structure
Loan Agreement
IFC
Borrower
A + B Loans
Participation
Agreement
B Loan
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
Participants

22. IFC Management Team in the Region Istanbul is the new Hub office for the Region
Vice President of IFC
Dimitris Tsitsiragos
(Istanbul)
Regional Director
Tomasz Telma
(Moscow)
Regional Director
Mouayed Makhlouf
(Dubai)
Director of
Natural
Resources and
Infrastructure
Gulrez Hoda
(Istanbul)
Director of
Manufacturing,
Agribusiness &
Services
Guy Elena
(Istanbul)
Director of
Financial Markets
Aftab Ahmed
(Istanbul)

23. Thank you...