IFC?s board, on Tuesday approved a package of crisis response initiatives to support emerging markets in the private sector, which are hit by the global financial crisis.
The crisis response facilities consist of a doubling of the IFC Global Trade Finance Program to $3 billion, a new $3 billion bank recapitalisation fund, and an infrastructure crisis facility, which is expected to mobilise at least $1.5 billion. These will be supported by advisory services addressing the needs of clients affected by the crisis. The goal of the sovereign funds initiative is to connect long-term commercial capital from state-owned investors with the substantial investment needs of private companies in developing countries.
On December 9, the board had approved a sovereign funds initiative to enable IFC, a member of the World Bank Group, to raise and manage commercial capital from sovereign funds for equity investments in some of the poor developing countries.
The initiatives will support the private sector, which is critical to employment, recovery, and growth. ?We are pleased that the board approved and endorsed these important initiatives,? said Lars Thunell, IFC?s executive vice-president and CEO. ?With the support of donors and partners, these IFC facilities will provide critical assistance to many businesses and entrepreneurs and reduce the impact of the crisis on the poor. In addition, our new sovereign funds initiative should mobilise new sources of commercial capital for long-term investments in frontier regions and countries.?
The four crisis response facilities are expected to bring in about $30 billion over the next three years. IFC will fund the facilities and it has also invited other donors, including governments and international financial institutions to contribute to the financing and expertise. The Japanese government has announced that it will become a founding partner and invest $2 billion in the Bank Recapitalisation Fund.