33820 IFC DONOR-SUPPORTED TECHNICAL ASSISTANCE PROGRAMS 2005 Report to the Donor Community About IFC The mission of IFC (www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and has arranged $24 billion in syndications and underwriting for 3,319 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. About the Cover This cover is the eighth in the series featuring flowers. We have used these images to symbolize our thanks to our development partners for their generous support. Previous years have featured cherry blossoms, dogwoods, tulips, edelweiss, roses, white lilies and lily of the valley. This year's cover features the Dendrobium orchid. Front cover: Courtesy of IE Singapore. © DiskArtTM 1988 © DiskArtTM 1988 © DiskArtTM 1988 © DiskArtTM 1988 Copyright © 2005 The material in this publication is copyrighted. INTERNATIONAL FINANCE CORPORATION Requests for permission to reproduce portions 2121 Pennsylvania Avenue, NW of it should be sent to the Director, Trust Funds Washington, DC 20433, USA Department, IFC, at the address shown in the www.ifc.org copyright notice above. The IFC encourages dissemination of its work and will normally give All rights reserved permission promptly and, when the reproduction Manufactured in the United States of America is for noncommercial purposes, without asking Environmentally friendly printing on recycled a fee. Permission to copy portions for classroom paper using vegetable-based ink use is granted through the Copyright Clearance September 2005 Center, Inc. Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923, USA TABLE OF CONTENTS Message from the CHAPTER 1: CHAPTER 2: CHAPTER 3: Annexes, Directory, Executive Vice Strengthening Regional Reports Global Programs and and Glossary President Partnerships with the Technical Assistance Donor Community Initiatives to Deliver Better Technical Assistance 5 Technical 12 Sub-Saharan 45 Technical 66 Technical Assistance and Africa Assistance Trust Assistance and Advisory Services 17 East Asia & Funds Program Advisory Services ­ An Integral Part the Pacific 50 Foreign Projects of IFC's Business 22 South Asia Investment 91 IFC Donor- 8 Donor Breakfast 26 Europe & Advisory Service Supported and World Bank Central Asia 53 Sustainable Technical Group Donor 35 Latin America & Business Assistance Forum the Caribbean Assistance Programs: 9 Foundations and 39 Middle East & Program Locations and Philanthropic North Africa 57 Capacity Building Purpose/Strategy Community Facility 94 Cumulative 60 Strengthening Financial Support Grassroots 98 Directory Business 100 Glossary Initiative 62 Other Initiatives and Programs 2 4 10 44 64 Message from the Executive Vice President It is with great pleasure that I present to you this Donor Report for fiscal year 2005. This report gives you a comprehensive description of the main achievements of the partnerships between IFC and the donors in reducing poverty and in helping our member countries to achieve the Millennium Development Goals. I offer my most sincere thanks to all of our donors. Their generous support and genuine partnerships are helping developing countries grow. With their support, we increased the level of disbursements for technical assistance and advisory services to about $108 million, of which donors funded approximately 80 percent. It is absolutely clear to all of us that accomplishing our shared mission of reducing poverty in developing countries requires us to provide significantly more technical assistance and advisory services to facilitate and complement our investment activities and those of other investors. I am also very pleased to report that during the year we completed a review of our strategy that resulted in developing a clearer approach for each of our geographic regions. We have now firmly positioned our technical assistance operations as a core IFC business. Broadening our donor network and strengthening our partnerships are a necessary part of this strategy. The review of our strategy reaffirmed the continuing relevance of IFC's five strategic priorities: · To strengthen our focus on small and medium enterprises in frontier markets, especially in Africa and the Middle East · To build long-term partnerships with emerging global players from developing countries · To provide global leadership in promoting sustainable development by supporting environmental and social responsibility and good corporate governance · To address constraints to private sector participation in infrastructure, health, and education · To promote the development of local financial markets I am fully aware that we cannot achieve our strategic goals without the support and collaboration of our donor partners who, through their generous support, make it possible for us to stabilize the long- term funding of existing and new initiatives. Our donor-funded operations have expanded in line with the growth of our technical assistance and advisory services and will increase at a faster pace with the projected quantum jump in our investment program. With this growth, we have recognized the need to streamline our donor coordination. Therefore, we have expanded the role of our Trust Funds Department, making it the focal point for coordinating our partnerships with the donors. 2 The review of our strategy led to other changes in organization and the work of our colleagues in other parts of the World Bank Group. operations that we implemented during the year. IFC's project development facilities and the private enterprise partnerships focused on implementing specific reforms and other · We refined our organizational structure and gave our regional practical measures to improve the investment climate in the areas departmentdirectorsresponsibilityfordefiningthetechnicalassis- of privatization, trade policy, business regulations burden and tancestrategyandapprovingalltechnicalassistanceoperationsfor administrative costs, infrastructure, and access to financing and, to theirregionsaswellasforoverseeingprojectdevelopmentfacilities a growing extent, on business linkages programs. and private enterprise partnerships. This increased oversight and accountability will help us ensure that we make the right choices · We made progress in the way we measure the results and impact in selecting interventions both, in terms of developmental impact of our technical assistance and advisory activities. and of integration with IFC regional strategies. From the beginning of this calendar year, all our technical assis- As you will read in the regional sections of this report, during FY05 tance and advisory projects have been subjected to the same each of our regional departments focused on high-priority technical rigorous approval process as our investment projects. We also assistance and advisory activities selectively identified to respond require each proposal to include very clear and measurable indica- to recognized demand. Each region increased the volume and tors of input, output, expected outcomes, and expected impact. improved the quality of such services delivered, and expanding We have invested heavily in converting our fragmented information the reach and raising the impact of its operations. technology systems to facilitate project information-sharing and data capture on the same platform used for investment projects. · We increased our field presence, reduced retail services and concentrated on fewer sector-wide interventions. In closing, let me thank you, our partners, for your continuing · We became more selective in our interventions to ensure that support during the year, especially those donors with whom we we respond to demand for services only in areas where we have entered into new partnership agreements to govern our relation- a clearly acknowledged comparative advantage. ships and collaboration. I hope we shall conclude similar arrange- · In order to broaden our impact, we gave higher priority to ments with our other donors to cement our partnerships in pursuit investment climate work and improving in the business enabling of our mission to help developing countries attract private sector environment. investment and build the strong enterprises that will drive growth, create jobs, and free their people from poverty. IFC's mission and that of its donor partners is to stimulate private sector development to facilitate poverty reduction through growth and employment. It requires that we give higher priority to helping our member countries establish competitive investment climates. Assaad J. Jabre Our work in this area, which continues to expand, complements Acting Executive Vice President 3 1 Strengthening Partnerships with the Donor Community to Deliver Better Technical Assistance Technical Assistance and Advisory Services ­ An Integral Part of IFC's Business TAAS programs help IFC deliver on its mandate to support sustainable private sector development. When coupled with investments, they improve development impact and distin- guish IFC from other financiers. Most of IFC's member countries now acknowledge the importance of private sector development in promoting growth and reducing poverty. The increased attention given to the investment climate and the reception given to the Doing Business report in many developing countries over the past few years underscore this growing consensus. During recent replenishment discussions for the World Bank's International Development Association (IDA), donors stressed that stronger growth requires a better climate for private investment in poor countries and urged a redoubling of efforts to support domestic private sector growth. But there is also recognition that the private sector cannot do everything on its own and that success in such areas as infrastructure and small and medium enterprises will entail the use of more effective public-private partnerships. In FY05, IFC had active TAAS programs in more than 70 countries, with most being delivered in frontier countries. Today, about a third of the Corporation's staff, or close to 700 people, are engaged in full-time delivery of TAAS operations. Annually, IFC manages over $108 million in TAAS program expenditures. Project development facilities and private enterprise partnership programs account for more than 50 percent of TAAS spending, the Technical Assistance Trust Fund program for about 17 percent, and the Foreign Investment Advisory ServiceandSustainableBusinessAdvisoryprogramsforanother14percent.Thebalanceofthespending occurredinotherglobalprograms.(See box for a snapshot of IFC's TAAS work, geographical distribution and beneficiary groups.) In FY05, TAAS programs focused on the areas and activities described below. Frontier Countries Basicissuesofinvestmentclimate,marketsize,andthelackofinstitutionalcapacityatboththeprivateand public levels continue to challenge frontier countries. In addition, vast regional disparities continue to exist within some of the larger developing and transition countries, from China and India to Brazil and Russia. 5 In frontier countries, where access to long-term financing remains Key developments include: scarce, IFC plays an important role in providing needed financing to · TheAfricaProjectDevelopmentFacilitywasrestructuredintoanew the private sector as well as in addressing countries' broader private model,thePrivateEnterprisePartnershipforAfrica.Itsmandatewill sector development issues, such as the investment climate and broaden the support for the three pillars of IFC's regional strategy sectoral constraints to private investment. For IFC, the challenge is in Africa; providing project development assistance, enhancing to scale up support for SMEs; promote viable partnerships between supporttoSMEs,providingprojectdevelopment,andimprovingthe governments and the private sector; and, in close cooperation with investmentclimate.IFCwillusePEP-Africatotacklebroaderissues the donors and the World Bank, help build the capacity of both the ofSMEdevelopmentandconstraintstoprivatesectordevelopment private and public sectors to ensure long-term success. and to add value to its investments. A SNAPSHOT OF IFC'S TECHNICAL ASSISTANCE MAJOR AREAS OF TAAS WORK AND ADVISORY SERVICES (percentage of approved funds for active projects, FY05) Assistance to firms. Includes support to strengthen Assistance to Business enabling micro, small, and medium enterprises and to help establish firms 23% environment 22% supplier or distributor links between these businesses and larger companies. Business enabling environment. Includes removing barriers to investment, improving government policies Public-private Financial markets for SME sector, strengthening business service providers, partnerships 19% development 26% studyingspecificsectors,advisingoncorporategovernance, and conducting gender initiatives. Environment and social Environment and social development.Includes benefits development 10% related to biodiversity, energy efficiency, HIV/AIDS, renewable energy resources, workforce health and safety, GEOGRAPHIC DISTRIBUTION OF OPERATIONS community development, and indigenous people. (percentage of approved funds for active projects, FY05) Financial Markets Development. Includes promotion Global 10% of leasing, factoring, housing finance, insurance, banking, Middle East and Europe and Central microfinance, and trade finance. North Africa 5% Asia 30% Sub-Saharan Public-private partnerships. Includes providing advisory Africa 14% assistance (primarily to governments) on privatization and restructuringofstate-ownedenterprises,andonprivatesector participation in infrastructure to expand access to public South Asia 8% services (such as transportation, health services, and power). Latin America and the Caribbean 3% Approved funding for TAAS projects active in FY05 totaled East Asia and $276 million. the Pacific 30% Thedatainthesegraphswerecollectedusingnewproceduresimple- mented across IFC during FY05: they have not been audited. GROUPS THAT BENEFIT (percentage of approved funds for active projects, FY05) Governments 22% SMEs 39% Financial intermediaries 16% Other intermediaries 12% Large companies 11% 6 · The Private Enterprise Partnership for the Middle East and North is a donor-funded program to provide training and best practice Africa was launched to address some of the main constraints guidance to financial institutions on sustainable banking and to greater private sector investment in the region, to support finance in partnership with local and regional organizations. SME development, and to assist in the recovery of post-conflict countries. Improved TAAS Management · Joint IFC and World Bank teams have completed design and begun implementation of the IDA-IFC Micro, Small, and Medium IFC is engaged in a major effort to strengthen the systems under- Enterprises programs in Nigeria, Kenya, Uganda, Burkina Faso, lying the design, delivery, and monitoring of its technical assistance and Mali. programs. Several initiatives have been undertaken to ensure consistently high-quality delivery of assistance: Sustainability · Focusing on key lines of business ­ IFC is reviewing its experi- IFC has advanced its sustainability agenda by improving policies ence with different technical assistance (TA) products to identify and processes, bringing sustainability competencies to clients, key lines of business that can be supported and replicated in and developing sustainability strategies in sectors where large other markets. environmental, social, and governance impacts are possible. · Strengthening staff capacity and improving flexibility ­ IFC is Donors supported many of the initiatives in this agenda. undertaking several human resources initiatives for its TA staff, including developing a corporate cadre to retain key TA staff Examples include: along with their extensive knowledge and experience, developing corporate competencies, and improving training. · Updating the Pollution Prevention and Abatement Handbook, · Monitoring and evaluating projects ­ IFC has recruited monitoring which provides guidelines on pollutant control technologies. and evaluation staff in all facilities and has implemented a new The handbook is used widely by companies, governments, project approval system for all TA projects--a system similar to financiers, and international financial institutions. Five donors the one used for investment projects. This system includes iden- are supporting this effort. tification of expected outcomes and impact and the development · Small and medium enterprise linkages programs connect SMEs of standard indicators for measuring development effectiveness. to major IFC investments and bring additional economic benefits to surrounding communities. Programs often focus on value-chain Funding Mechanism for Technical Assistance developmentorincome-generatingopportunitiesforlocalentrepre- and Advisory Services neurs. To date, about $20.4 million of technical assistance funding has been mobilized for 14 linkages programs in 10 countries. In FY05, following a Board resolution in June 2004 to establish · Sustainability competencies have been introduced to promote FMATAAS, IFC designated $225 million from its FY04 retained corporate governance, SME linkages, and AIDS programs. earnings for TA expenditures through the new funding mechanism. · Sectoral strategies have been developed to support extractive After careful analysis of past profitability trends, and to ensure industries, sustainable energy and industrial efficiency, and reasonable distribution of funds, IFC management decided to limit financial markets. annual expenditure allocations under FMTAAS to about $65 million for FY06 and beyond. For FY05, IFC allocated about $68 million, Financial Markets of which about 75 percent has been designated for existing IFC facilities and other donor-funded operations and the balance to In many IFC client countries, access to financial services is various projects for capacity building and other TA needs. inadequate, especially for SMEs. Therefore, IFC continued to strengthen local capital markets and institutions by providing Future Outlook institution-building assistance to banks, credit bureaus, and securities markets. IFC also continued to help expand local access Inthefuture,IFCwillpayadditionalattentiontoimprovingthesynergy to innovative products and services in specific priority areas. Donors between its investment and TA activities and to combining conces- have funded many projects to assist in this effort. sionalfinancingwithcommercialinvestmentstotacklethechallenges of infrastructure and SME development in frontier markets. Collabo- IFC is also engaging with the financial sector on sustainable lending ration between IDA and IFC will become much more significant, and investment issues. The Sustainable Financial Markets Facility especially with a view to catalyzing public-private partnerships. 7 IFC Donor Breakfast Meeting Donors encouraged IFC to continue its work on investment climate Washington, D.C. through broader dissemination of information and greater collabora- October 4, 2004 tion with the World Bank. They welcomed increased cooperation between donors and IFC in public-private partnerships and urged IFC held its annual Donor Breakfast Meeting in Washington, D.C, the Corporation to allocate some of its record net income to support in conjunction with the World Bank Group/IMF annual meetings. such initiatives. Donors also counseled IFC to help ensure that Mr. Peter Woicke, Executive Vice President of IFC and Managing signatories to the Equator Principles live up to their commitments, Director of the World Bank Group, chaired the meeting, and and they encouraged IFC to be sensitive to the concerns of attendees included donor representatives and IFC management nongovernmental organizations with respect to these principles. and staff. The primary objectives of the event were to showcase Donors noted that IFC's project development facilities appeared IFC's donor-supported technical assistance initiatives, to highlight to be broadening their focus from small and medium to larger recent developments in our technical assistance strategy, and to enterprises. IFC responded that its linkage programs are helping discuss ways to further develop our partnerships with donors. larger enterprises integrate local SMEs into their supply chains, with substantial benefit to these SMEs. Donors also urged IFC to Presentationsunderlinedtheimportantroleofdonor-fundedtechnical review trust fund arrangements in order to permit more flexibility assistance in launching the first commercial microfinance institution in funding innovative technical assistance projects. in Afghanistan and IFC's first public-private partnership project involving water distribution for agricultural use. IFC also explained World Bank Group-Donor Forum recent trends in its delivery of technical assistance in Africa. Washington, D.C. April 18-19, 2005 Mr. Woicke welcomed IFC's newest donor, the Wallonia Region of Belgium, and expressed his appreciation of donor support for the The first joint World Bank Group-Donor Forum on partnerships, Corporation's technical assistance activities. He summarized the programs, and trust funds was held this year at the Bank Group's recent changes in IFC's technical assistance strategy: headquartersinWashington,D.C.Itwasaresponsetoincreasingcalls from donors for greater collaboration among the World Bank, IFC, · Technicalassistancehasbeenintegratedwiththeinvestmentwork and the Multilateral Investment Guarantee Agency (MIGA). Senior oftheregionaldepartments.AsofJanuary2004,thesedepartments management and staff from all three institutions participated, along have taken full responsibility for integrated technical assistance withrepresentativesfrom27donorcountriesandagencies.Attending strategiesandforallrelatedactivitiesintheirregions.Thisapproach asobserversweretheAfricanDevelopmentBank,theEuropeanBank isconsistentwiththelargerroletheregionaldepartmentsareplaying for Reconstruction and Development, the Asian Development Bank, in business development. It also reflects the central contribution ofand the International Monetary Fund. Keynote speakers included technical assistance to IFC's traditional work. Mr. Patrus Ananias, Brazil's Minister for Social Action, and Dr. Ngozi · IFC's Board has approved a funding mechanism that enables IFC Okonjo-Iweala, Nigeria's Minister of Finance. Mr. Geoffrey Lamb, to designate a portion of its net income every year for technical World Bank Vice President for Concessional Finance and Global assistance and advisory services, provided that net income Partnerships, and Ms. Farida Khambata, IFC Vice President for is above $150 million. This funding is meant to complement Portfolio and Risk Management, cochaired the forum. donor support by allowing IFC to make stable and dependable contributions to its technical assistance activities and to improve Mr. Lamb chaired the first day's proceedings, which focused long-term collaboration with donors. on the World Bank and included discussions on global issues · IFC is expanding its work on investment climate issues critical and partnerships, fiduciary aspects of trust fund management, to the development of micro and small enterprises in developing and progress on trust fund reforms. Donors expressed general countries. Activities are being closely coordinated with the World satisfaction with the Bank's management of the funds entrusted Bank and benefit from the momentum created by the Doing to it and with management's efforts to align trust funds with Business report. strategic development objectives. There was broad consensus on · IFC is providing leadership in establishing global benchmarks on the importance of global programs, especially for achieving the environmental and social issues. Since June 2003, 32 financial Millennium Development Goals, and on the need to link these goals institutions representing about 80 percent of the world's project with development priorities at the country level. Donors agreed on finance market have adopted the Equator Principles, which are the catalytic role that multidonor trust funds can play in addressing based on IFC and the World Bank's policies and guidelines. issues at the global, regional, and country levels. They endorsed the · IFC is further promoting sustainability through value-added Bank's efforts to modernize and simplify its trust fund procedures services and funding to its clients in such areas such as corpo- to make them more country- and client-oriented. rate governance, supply-chain linkages, and HIV/AIDS. The principles underlying the Bank' new policy on expenditure eligibilityweregenerallyacceptabletodonors.TheBankwasurgedto 8 refine further its procedures for the proposed Externally Funded Staff dynamicallyandthatneeddonorsupport.Inaddition,Ms.Khambata Program, in order to increase diversity and create a level playing field also explained that IFC is giving greater attention to monitoring and fornationalsfromdifferentcountries.Finally,meetingparticipantswere evaluating its TA activities so as to more effectively measure develop- briefedontheBank'snewinvestmentstrategyfortrustfunds,whichis ment impact through enhanced systems and procedures. designed to accommodate donors' differences in tolerance for risk. In response to donors' questions, Ms. Khambata noted that while IFC Mr. Michael Klein, World Bank Group Vice President for Private would prefer untied funds, the Corporation would also be pleased to Sector Development and IFC Chief Economist, chaired the joint receive tied funds. On controls and IFC's fiduciary responsibility, she session of the World Bank, IFC, and MIGA on private sector develop- explained that new policies and procedures are being adopted inter- ment activities. He noted that joint Bank Group and donor support nally to strengthen the Corporation's capacity. She acknowledged the for capacity building and data collection in developing countries is importanceofincreasingcollaborationwiththeWorldBankandagreed essential for growth, job creation, and poverty reduction. Donors withdonorsontheneedforIFCtoimproveitsinternalcommunication welcomed the Bank Group's collaboration in improving investment anditsoutreachtothedonorcommunity.Ms.Khambataencouraged climates,developingsustainableextractiveindustries,andmobilizing donors to work with IFC in conceptualizing and implementing new foreign direct investment in frontier markets, including postconflict project designs. Ms. Khambata stressed that IFC remains committed countries.Theyencouragedthethreeinstitutionstocontinueseeking toitsfocusonpovertyreductionthroughprivatesectordevelopmentin synergies by working together and cooperating with the donor emergingeconomies.Sheconcludedbythankingdonorsfortheirkey community. Donors agreed on the importance of governance in support to the goals and work of the Corporation and invited them to the extractive industries, noting that the Bank needed to improve consider IFC to be their partner of choice with the assurance of IFC's communication about its successes and challenges in this sector. readiness to work more closely with the donor community. While acknowledging the need for intensified cooperation, Mr. Klein warned against too much harmonization and coordination and emphasized the need for practical and flexible approaches. STEPPING UP COOPERATION WITH THE PHILANTHROPIC COMMUNITY Ms. Khambata chaired the IFC session. Donors welcomed IFC's strategyofintegratingtechnicalassistancewithinvestmentoperations, Inthelastseveralyears,IFChasworkedwithfoundationsand charitableorganizationsonavarietyofprojectsandinitiatives. andrefiningitsorganizationalstructure,asthiswouldhelptheCorpora- But opportunities to deepen relationships have often been tionbetterleverageitscomparativeadvantageintechnicalassistance. overlooked. In FY05, IFC began to develop a more strategic They cautioned against crowding out, rather than promoting, other approach in this area, focusing on specific sectors. private sector interventions in emerging economies. Donors encour- aged IFC to deepen its role as a global standard setter in promoting IFC is now prioritizing partnerships for projects related to environmental sustainability, health and education, opportunitiesforenvironmental and social sustainability in the private rural development, and social entrepreneurship. We are sector. They urged the Corporation to provide training support to its particularly interested in developing opportunities for clients and partners and to disseminate its know-how and lessons foundations to use our extensive network of on the ground learned more broadly. Donors welcomed IFC's work in enhancing its technical assistance providers to help implement and monitor foundation projects. own capacity for monitoring and evaluating technical assistance, and they encouraged the Corporation to share with the donor community Examples of projects in which foundations provided either itsknowledgeandexperiencesinmeasuringthedevelopmentimpact grants or capital alongside IFC indicate the breadth of of technical assistance. Donors reaffirmed their support for IFC's opportunities for collaboration: technicalassistanceactivitiesinAfricaandwelcomedtheCorporation's · IFC, the Ford Foundation, the Skoll Foundation, the newstrategythere.NotingtheexpansionofIFC'sworkinmicrofinance, Gatsby Charitable Trust, and the Levi Strauss Foundation donors acknowledged that upfront subsidies for systems installation have each provided capital or technical assistance grants or staff training were crucial to long-term viability, and they pledged to ShoreCap International and ShoreCap Exchange, both to continue support for IFC's work in this area. Donors congratulated subsidiaries of ShoreBank Corporation. An investment IFC on its work in renewable energy and urged the Corporation to company, ShoreCap International, focuses on microfi- nanceandSME-orientedbankswhileShoreCapExchange collaborate on this more closely with the World Bank. provides technical assistance to these investee institutions. · The Omidyar Network has provided a grant to Hagar, Ms. Khambata explained that technical assistance is no longer an a grassroots business organization with which IFC has add-on but an integral part of IFC's work. There remains a need for had a long relationship. IFC to be more selective, focusing on areas where it has a compara- · Through IFC's Environmental Opportunities Facility, the Acumen Fund has worked alongside IFC to provide tive advantage and leveraging its experience in risk assessment in grantandequityfinancingtoWaterHealthInternational, emerging economies as well as its extensive network of field offices. a company that has developed a unique water purifica- Going forward, IFC's strategic focus will include investment climate, tion technology. IFC and Acumen have also collaborated infrastructure, and microfinance ­ areas that have developed in mobilizing additional resources for the company. 9 2 Regional Reports 10 SUB-SAHARAN EAST ASIA AND SOUTH ASIA EUROPE AND LATIN AMERICA MIDDLE EAST AFRICA THE PACIFIC CENTRAL ASIA AND THE AND NORTH CARIBBEAN AFRICA Angola, Benin, Cambodia, China, Bangladesh, Albania, Armenia, Antigua & Afghanistan, Botswana, Fiji, Indonesia, Bhutan, India, Azerbaijan, Barbuda, Algeria, Arab Burkina Faso, Kiribati, Republic Maldives, Nepal, Belarus, Bosnia Argentina, Republic of Burundi, of Korea, Sri Lanka and Herzegovina, The Bahamas, Egypt, Islamic Cameroon, Cape Lao People's Bulgaria, Croatia, Barbados, Republic of Iran, Verde, Central Democratic Czech Republic, Belize, Bolivia, Iraq, Jordan, African Republic, Republic, Estonia, Georgia, Brazil, Chile Kuwait, Lebanon, Chad, Comoros, Malaysia, Hungary, Colombia, Costa Libya, Morocco, Democratic Marshall Islands, Kazakhstan, Rica, Dominica, Oman, Pakistan, Republic of Federated States Kyrgyz Republic, Dominican Saudi Arabia, Congo, Republic of Micronesia, Latvia, Lithuania, Republic, Syrian Arab of Congo, Côte Mongolia, FYR Macedonia, Ecuador, Republic, Tunisia, d'Ivoire, Djibouti, Myanmar, Moldova, Poland, El Salvador, United Arab Equatorial Palau, Papua Romania, Grenada, Emirates, West Guinea, Eritrea, New Guinea, Russian Guatemala, Bank and Gaza, Ethiopia, Gabon, Philippines, Federation, Guyana, Haití, Republic The Gambia, Solomon Islands, Serbia and Honduras, of Yemen Ghana, Guinea, Thailand, Montenegro, Jamaica, Mexico, Guinea-Bissau, Timor-Leste, Slovak Republic, Nicaragua, Kenya, Lesotho, Tonga, Vanuatu, Slovenia, Panama, Liberia, Vietnam, Western Tajikistan, Turkey, Paraguay, Peru, Madagascar, Samoa Turkmenistan, St. Kitts and Malawi, Mali, Ukraine, Nevis, St. Lucia, Mauritania, Uzbekistan Trinidad and Mauritius, Tobago, Uruguay, Mozambique, Venezuela Namibia, Níger, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, Somalia, South Africa, Sudan, Swaziland, Tanzania, Togo, Uganda, Zambia, Zimbabwe 11 Sub-Saharan Africa IFC'snewstrategicinitiativeforAfrica,launchedin2004,callsfor anincreaseintechnicalassistanceandadvisoryactivitytoachieve three main objectives: expanding the Corporation's program for smaller businesses, which constitute much of the private sector intheregion;supportinglargerprojectsintheformativestagesof development; and improving the overall investment climate. The end of the Africa Project Development Facility's five-year cycle in June 2005 gave IFC the opportunity to design a successor program with a broader private sector development mandate, thus leading to increased technical assistance. This new program, the Private Enterprise Partnership for Africa (PEP-Africa), will accelerate implementation of IFC's strategy for Africa: it significantly broadens and deepens IFC's technical and advisory work and intensifies collaboration with donor partners on funding and programming. IFC has already begun reaping the rewards of this more comprehensive approach to Africa's develop- ment. Committed investments were $455 million for FY05, and for the first time IFC has invested over $400 million in the region for two consecutive years. Africa Project Development Facility APDF's mix of services has evolved as the facility expanded its reach and impact. Since 2000, APDF's deliverables have increased exponentially. The number of firms receiving capacity building or enterprise support services grew from 69 in FY01 to 233 in FY05. During the same period, APDF helped African firms raise more than $129 million in financing through business advisory services for a total investment of over $330 million, creating an estimated 18,000 jobs. Costs recovered from recipients of services also increased substantially, from $700,000 in FY01 to about $1.5 million in FY04. Over the past five years, more than 13,900 staff of smaller companies, over 1,600 consultants, and over 1,800 staff of financial institutions participated in various management training programs. Overall, APDF provided more than 335,000 person-hours of training during that period. The main donors that contributed to APDF over the past five years were theAfrican Development Bank, Denmark, Germany, the Netherlands, Norway, Portugal, Sweden, Switzerland, the United Kingdom, and the U. S. Agency for International Development. 12 Future Direction and IFC TA Fund). IFC has helped design a coordinating mecha- nism and other components for implementation. A PEP-Africa PEP-Africa was approved by the IFC Board in March 2005 and program will eventually support implementation by mobilizing launched in June 2005 at the APDF Paris donor meeting. It officially private sector financing for specific investment projects. started operations on July 1, 2005. For program implementation, PEP-Africa has already mobilized $9.5 million in donor funding and IFCAdvisoryServicesrecentlyassistedthegovernmentofMozambique initiated five new multiyear technical assistance programs. inselectingapotentialinvestorforthedevelopmentoftheMoatizeCoal Mineandassociatedrail,power,andportinfrastructure.Fundingwas PEP-Africa will continue to provide the type of SME development providedbytheInfrastructureDevelopmentCollaborationPartnership support delivered by APDF through the SME Entrepreneurship FundformedbythePrivateInfrastructureDonorGroup,whichincludes Development Initiative. This three-year program will be sponsored theUnitedKingdom'sDepartmentforInternationalDevelopment,the by IFC and donors contributing to PEP-Africa's pooled funding. Swedish International Development Agency, and the Netherlands' Many staff members previously employed by APDF have been reas- MinistryofForeignAffairs.Thewinningbidderisaconsortiumheaded signed to PEP-Africa, thereby ensuring continuity in the transition by Companhia Vale do Rio Doce of Brazil. In addition to developing from APDF to the PEP-Africa business model and in the manage- large-scale mining operations, the company will explore the potential ment of the SME Entrepreneurship Development Initiative. for adding value in a variety of local downstream industries. It will also consider an SME linkages program, Mozambican participation in Enhanced Support to SMEs shareholding of the mining company, and a wide-ranging community development program. Supported by the same donors, PEP-Africa is In FY05, IFC continued to implement its joint Micro, Small, and now planning to work with key stakeholders to design a program for Medium Enterprise Initiative with the World Bank's International the different aspects of the concession agreement and to help build DevelopmentAssociation.Teamscompleteddesignandimplementa- capacity within the Mozambican government. tion of the programs in Nigeria, Kenya, Uganda, Burkina Faso, and Mali. Programs in Tanzania, Ghana, Madagascar, and Mozambique In addition, funding from the Infrastructure Development Collabora- are now in the final design stage (Netherlands). In addition, an SME tion Partnership Fund helped IFC's Advisory Services Department needs assessment was conducted in the Democratic Republic of structure a bid to select a private operator for the container terminal Congo to improve the general business environment (Belgium). at the port of Toamasina in Madagascar. The winning bidder, International Container Terminal Services of the Philippines, will In Mozambique, IFC established the Mozambique SME Initiative in enter into a 20-year concession for the operation, management, FY05, following a government request to provide direct financing financing, rehabilitation, and development of the container terminal to smaller companies. Established as an IFC-administered pilot on a public-private partnership basis. program, the initiative provides an integrated package of risk capital and technical assistance to selected SMEs. Funding will be The increased focus on power and housing has led IFC to investi- provided by Switzerland and, in the first year, by a grant from IFC. gate the potential for small-scale power generation and distribution in Nigeria (Ireland and IFC TA Fund). IFC has also investigated IFC also funded the Woman Entrepreneur Program, which aims demandandsupplyinUganda'shousingsector(Israel,Luxembourg, to facilitate the growth of women-owned SMEs through business and IFC TA Fund). A similar study was completed in Ghana (Switzer- management training. As part of IFC's Gender Entrepreneurship land). Both housing projects will be followed by workshops as well as Marketsinitiative,theprogramtargetsSouthAfricanblackwomenwho discussions with the governments of the respective countries. areowner-managersofregisteredSMEsandhaveshownthepotential to grow their businesses despite disadvantaged backgrounds. It IFC Advisory Services is currently helping the governments of Kenya reaches out to potential participants through women's business and Uganda grant concessions for their railway networks to private associations (SAWEN) and media campaigns (IFC TA Fund). operators through competitive bidding. The privatization of these railways will entail considerable investment and expansion of railway Upstream Project Development traffic, creating opportunities for foreign investment in rail operations and for local business. PEP-Africa is developing a program encour- In Mozambique, IFC recently completed the preparation phase of aging the winning bidder to use local SME services and suppliers. In the South East African Tourism Investment Program, an 18-month partnershipwithIFCAgainstAIDS,PEP-Africaalsointendstohelpthe initiative to increase investments in tourism. The program will defineoperator implement an HIV/AIDS program and develop community requirements for developing the tourism sector in order to catalyze linkages for major informal settlements along the railway. donor, government, and private sector engagement (Netherlands 13 PRIVATE ENTERPRISE PARTNERSHIP FOR AFRICA PEP-Africa programs are designed to support the three pillars of IFC's strategy in Africa: small and medium enterprise development, proactive identification of investment projects, and investment climate. The initial pipeline of programs also seeks to complement the current donor emphasis on infrastructure and financial markets. PEP-Africa will selectively develop other programs that respond to market needs and donor priorities ensuring a balanced portfolio of technical assistance across English-, French-, and Portuguese-speaking countries and across industry sectors. IFC will fund PEP-Africa's core management and staff as well as the operating costs for program research, development, monitoring, and reporting. Over a period of five years, IFC will commit $7.5 million annually from its own resources. In addition, PEP-Africa plans to raise $22.5 million a year in donor funding or about $112 million over a five-year period. The aim is to leverage $3 for every $1 IFC provides. To this end, PEP-Africa intends to form long-term strategic partnerships with donors to accelerate private sector­driven economic growth. Donors will fund PEP-Africa's cost for program implementation. This flexible approach gives them the opportunity to select technical assistance programs aligned with their private sector development strategies and their sector and country priorities, while benefiting from IFC's experience in technical assistance and investments as well as from IFC's stakeholder networks. The PEP-Africa funding model will pool private sector development aid for technical assistance projects promoted by multiple donors with similar program objectives. Five program areas have been defined for pooled funding: · Business environment · Financial market development · Public-private infrastructure · Sector growth and investment programs · Entrepreneurship development PEP-Africa programming in these areas gives donors the option to leverage IFC and other donor funds in design and implementation of private sector development programs managed by PEP-Africa. 14 Investment Climate PEP-Africa will complement FIAS and other World Bank Group projects. In particular, it will assist governments in project imple- mentation, enhance the public-private sector dialogue, and support private sector advocacy. PEP-Africa will also address business environment and regulatory issues at the sectoral level. The Doing Business Better in Burkina Faso program is an example of a PEP-Africa investment climate program (Switzerland). It will be run jointly with FIASand will complement the analytical and other support initiated under an IDA credit. FIAS's Sub-Saharan Africa Strategy (FY05-07) The Foreign Investment Advisory Service aims to help governments in criticallyimpoverishedandpost-conflictcountriestacklekeyconstraints thataffecttheinvestmentclimate.Thestrategyhingesonimplementing reform through deeper engagement in key African countries. During FY05, FIAS completed 15 advisory projects in Sub-Saharan Africa. The main areas of activity included: KENYA: Radical Reform of the Licensing System · Diagnostics (Gabon, Rwanda) Kenya provides a successful case of multidonor collabora- tion to help generate a reform process and move from · Administrative barriers studies and implementation (Kenya, diagnosis through solution design to implementation. Democratic Republic of Congo, Sierra Leone, Seychelles) FIAS has advised the government on an institutional · Licensing system reform (Kenya) structure and action plan for private sector development · Reviews of investment laws and legal framework (Kenya, Zambia, reform, in close collaboration with the World Bank. In Seychelles) the implementation phase, PEP-Africa will be involved to build capacity of private sector organizations. In addition, · Taxation and incentives policy (Guinea-Bissau, Zambia) FIAS undertook a review of the investment bill jointly · Gender and growth assessment (Uganda) with MIGA. · Non-fiscal regional incentives (East Africa Community) Another major technical assistance project provided by FIAS, in collaboration with the World Bank's regional Client demand continued to be strong for advisory support on private sector development team, aimed at introducing a administrative barriers reform, foreign direct investment policies radical"guillotine"approachtoreformbusinesslicensing.It and regulation, and investment promotion. FIAS began systemati- advocatesatop-downstrategy,basedonstrongpoliticalwill cally integrating issues related to gender, land, business informality, at higher levels of government rather than on the readiness and sector analyses into its projects. Product innovations included a of each licensing authority. The approach sets new criteria andadeadlineforscreeningallexistinglicenses.Thosethat gender and growth study (Uganda), a sectoral study of the effective cannot pass the screening are eliminated. The "guillotine" tax burden (Zambia), and a mini-diagnostic (Rwanda). prepares the ground for a disciplined and systematically monitored licensing regime. FIAS has successfully implemented a programmatic approach involving multi-year, multi-project engagements with donor participa- Following FIAS's advice, Kenya's government established a working group to conduct an independent review of 600 tion.InSierraLeone,forexample,thefirsttwophasesofathree-phase business licenses and permits. In April 2005, the group program were completed in FY05. They focused on administrative had reviewed 86 required licenses and recommended barriers to investment, capacity building, solution design, and the eliminating 20, further investigating or simplifying 32, implementation of a private sector development reform agenda. and keeping 34 of them. By May 2005, the licensing "guillotine" caught public attention through the press, and high-level political consultations intensified. During FIAS projects in Sub-Saharan Africa continued to involve active a budget speech in June 2005, the government announced donor collaboration, as well as coordination with World Bank country its decision to eliminate 17 licenses and amend 30 licenses programs. FIAS also cooperated with IFC facilities and MIGA and as a first step. In the next phase, the remaining licenses will conducted consultations with the International Monetary Fund. In be reviewed, streamlined, or improved and compiled in a newly created e-registry system. Kenya, for example, FIAS studies have been used as inputs for the World Bank Economic Recovery Strategy Support Credit (see box). 15 The Private Enterprise Partnership for Africa significantly broadens and deepens IFC's technical and advisory work. THE COPPER BELT SME SUPPLIERS NIGERIAN BOND MARKET DEVELOPMENT PROGRAM In2004,IFClaunchedaprogramtoassistNigeriaindevel- In 2003, APDF launched an SME Suppliers Development oping its capital market. The intervention helped Nigerian Program with Zambia's Konkola Copper Mines and 23 authorities develop a domestic yield curve and attain a smaller companies selected by the mine. After one year, long-term cost of capital that would ensure domestic KonkolaCopperMines'procurementfromtheparticipants term investments by pension funds and other long-term exceeded $10 million. For 16 SMEs, turnover was up investors in strategic areas, such as infrastructure. The 50 percent due to a 45 percent increase in procurement program also incorporated a comprehensive market survey contracts from the mine and a 58 percent increase in new and involved collaboration with the World Bank. client contracts. The SMEs stepped up their investments by $2.5 million and created 528 new jobs. ThesuccessoftheseinterventionspromptedIFCtoinitiate further donor fundraising to implement the findings. An PEP-Africa is planning to expand the program to six major estimated $1.6 million would be required for a two-year mining companies in Zambia and 170 smaller companies. PEP-Africa program that would include training modules The program aims to spur SME development in the for bond traders, regulators, and other key stakeholders Copper Belt through sustainable procurement linkages as well as the establishment of a bond steering committee. and is expected to create opportunities for potential IFC The program would aim to create a functioning domestic investments in the mining sector. It will also support the term debt market. mines in addressing the HIV/AIDS problem, in partner- ship with IFC Against AIDS. 16 East Asia & the Pacific IFC's technical assistance programs place special emphasis on promoting sustainable business practices across East Asia and the Pacific. Theyhelplocalcompaniesachieveinternationalbestpracticesincorporategovernanceandenvironmental and social performance. Through these programs, IFC can develop model transactions in all sectors and is working with the region's vibrant private sector in addressing the social and environmental challenges posed by its economic growth. IFC reaches out to small and medium enterprises through four donor-funded facilities in the region: the China Project Development Facility (CPDF), the Mekong Private Sector Development Facility (MPDF), the Pacific Enterprise Development Facility (PEDF), and the Program for Eastern Indonesia SME Assistance (PENSA). These four facilities work to strengthen business-enabling environments and help smaller busi- nessesincorporatebestpractices,gainaccesstofinance,andbuildlinkageswithIFC'slargerinvestments. IFC will launch an additional facility in the Philippines in FY06. The regional department has increased its efforts to integrate the work of these facilities with other IFC activities. IFC's technical assistance supported the Corporation's investments, which totaled $740 million across East Asia and the Pacific and, as in previous years, focused on high-impact sectors, especially financial markets and infrastructure. China continued to represent nearly half the region's commitments, reflecting the country's robust economic growth. IFC also increased its investment commitments in Indonesia to $157 million, with an emphasis on developing local financial markets. Integration of Investment and Technical Assistance In FY 2005, IFC launched the SME Enhanced Lending Framework in Indonesia (see box). This innova- tive pilot aims to strengthen Indonesian banks' capacity to serve smaller companies. IFC will combine a credit line with a technical assistance package to improve the banks' skills for lending to SMEs. In addition, the banks will receive a performance bonus as an incentive to pursue SME lending (Japan, Netherlands, Switzerland, and IFC). Disbursement of the IFC loans for onlending to SME clients will be allowed only after the banks have successfully made required changes in their approach to the SME sector. This program was developed in close collaboration with PENSA and will become a model for integrating TA and investment in other countries. 17 A highlight in East Asia was the launch of the regional technical Strengthening the Investment Climate assistanceprogram,StrengtheningFinancialInstitutionsinEastAsia, which focused on corporate governance and institution building in IFC continues to support the Vietnam Business Forum (Canada and the financial sector (Netherlands, Japan, and IFC). The program Netherlands) and the Cambodia Private Sector Forum (Australia), targets18financialinstitutions in Indonesia, Vietnam, Cambodia, the and in FY05, MPDF and the government of Lao PDR launched Philippines, and China, including banks in which IFC has invested. the new Lao Business Forum in Lao PDR (Luxembourg). Modeled More active boards can strengthen corporate governance practices, on IFC's successful programs in Vietnam and Cambodia, the Lao ensuring companies' stable growth and enabling them to face global Business Forum is expected to improve the investment climate challenges. The institution building part of this program will fund and stimulate private sector development in Lao PDR by facilitating senior resident advisors to provide advice to the banks in such areas dialogue between the government and the private sector. as credit analysis and risk management. In Timor-Leste, which became an IFC member in 2005, the In Cambodia, IFC has provided technical assistance to Canadia Corporation is preparing a private sector development strategy with Bank on various occasions through MPDF. Following a $5 million the government and in coordination with the donor community. To loan commitment, IFC launched a comprehensive new TA program this end, IFC has launched a study to assess future investment aimed at strengthening Canadia's banking operations and devel- opportunities for IFC and other potential investors (Norway). The oping its housing finance services (Japan and IFC TA Fund). This World Bank Group expects the private sector to play an important technical assistance has a strong development impact because it role in the country's sustainable growth. improves the quality of housing finance services to a large number of previously underserved Cambodians. No other bank in the SME Development country offers housing loans on a scale comparable to that being initiated by Canadia Bank. In FY05, CPDF implemented the New Hope Dairy Linkages project to help local milk farmers in Sichuan and Yunnan provinces Sustainability improve the quality and productivity of the milk supply to the New Hope Dairy (Netherlands). This project includes a technology IFC is increasing its technical assistance resources to improve the transfer program, training and workshops, the development of environmental and social sustainability of local companies. For demonstration farms, and the establishment of a state-of-the-art example, in China, IFC invested $ 21 million in Fenglin Group, a dairy facility.The initiative is expected to have a major development leading wood product company based in Guangxi province. IFC impact on the local economy. It could also serve as a model for provided a technical assistance program to develop sustainable other future transactions in western China's agriculture sector. business practices that meet international standards (Sweden). Partnerships within the Donor Community In China, CPDF aims to introduce an environmental compliance program that will create incentives for SMEs to introduce sustain- Partnerships with donors are an important element of technical able environmental practices (Sweden). Additional support is assistance, and IFC is constantly seeking to broaden cooperation. being sought to train local enforcement officers at municipal This year, IFC undertook several activities to improve its collaboration environmental protection bureaus and support local environmental, with its donor partners. In Cambodia and Vietnam, MPDF commis- health, and safety consultants to implement the compliance sioned studies on gaps, overlaps, and conflicts in approaches in program in Sichuan province. The program also aims to develop donor assistance. The Japan International Cooperation Agency and implement a registration process for these consultants. seconded an official to IFC during FY05. The secondment provided IFC a better understanding of Japan's TA operations and will help in Public-Private Partnership the design of future partnership programs. IFC has been engaged by the Philippine government to advise the Providing Advisory Services for Positive Reform Build, Operate, and Transfer Center on preparation, design, and and Change implementation of a bankable program to attract private sector interest in the country's water sector. The initial mandate will involveFIAS provides advisory assistance at regional, national, and subna- selection of a concessionaire for a treated bulk water supply project tional levels in East Asia and the Pacific. Except for China and in metropolitan Cebu, through a competitive and transparent tender Mongolia, this assistance is delivered mainly through an office in process. The technical assistance will focus on providing a technical Sydney in order to provide efficient and speedy service to one of and economic review as well as legal expertise (France). FIAS's traditionally most active regions. 18 MPDF'S E-COMMERCE SUCCESS PEDF: Assistance to National Bank of Samoa A unique approach to e-commerce, pioneered by IFC's In 1999, four years after its establishment by local business MPDF,hasmadeWebmarketingbothaccessibleandafford- people, the National Bank of Samoa received a $100,000, ableforbudget-pricedhotelsandguesthouses.Overthepast five-year subordinated loan from IFC. Together with twoyears,MPDFhassetupandimprovedpilotWebportals the investment, IFC launched a capacity building TA in Cambodia, Lao PDR, and Vietnam that serve some 300 program managed by PEDF. During the five-year term, budget hotels and guest houses in 30 cities. several donor-funded TA projects were initiated (NZAID); these have provided staff training and helped develop In addition to enabling independent travelers to book a new products, policies, and procedures as well a new much wider range of accommodations, the sites create management information system. As the country's only localjobs,generatelocalcommissions,andpromotebudget indigenous bank, the institution is now firmly entrenched accommodation providers, whose profits remain in the as an integral part of Samoa's capital markets and provides county.Priortothisinitiative,onlyfour-andfive-starhotels a wide range of financial services. IFC's loan was repaid, could afford Web marketing, and the portals serving them on schedule, earlier this year. were located offshore. The opportunity to market over the Internet has also helped attract new members to the hotel associationsthatoperate the Webportals.Since theMPDF portals were launched beginning in late 2003, they have resultedinmore than 3,500 confirmed bookings andnearly $400,000 in revenue to hotel and guest house owners. In FY06, to ensure project sustainability, the Internet marketing project will spin off under the name, World- hotel-link.com Limited, thus increasing the number of Web portals in the Mekong region. WHL launched sites in the Czech Republic, Samoa, and Thailand, in FY05. With the support of IFC's facilities in the region, more sites are close to launching or under consideration in the South Pacific, China, and Indonesia. FIAS completed 17 advisory projects in the region during FY05 areviewofinvestmentprocedures.TheseprojectsfeedintotheWorld -- 10 in East Asia and 7 in the Pacific. Some of these provided Bank's economic development strategy for China's northeast. "just-in-time" advisory assistance, for which FIAS is particularly In Indonesia, the World Bank's Doing Business indicators high- well suited. FIAS contributed to the reviews of investment laws and lighted the regulatory obstacles that private investors face in estab- policies in Cambodia, Indonesia, Lao PDR, the Solomon Islands, lishing a business. FIAS has collaborated with the Doing Business Vanuatu, and Vietnam. In the Solomon Islands, FIAS provided the team and the World Bank Group to provide recommendations on foundation for new legislation that will establish a transparent and how to streamline the process for establishing a business. automated system for registering and regulating foreign investment. FIAS has developed an innovative, multiyear program approach to The new Foreign Investment Bill was brought before the country's addressing regulatory constraints to business through governmental parliament in July 2005. reform, notably in Fiji, Samoa, and Tonga. To support this process, FIAS and the World Bank have funded implementation specialists Investment promotion was provided in Cambodia, China, Fiji, to help set reform agendas and monitor progress. and at a regional level in the Pacific. Several projects were under- taken collaboratively with other agencies, including with MIGA in InCambodia,FIASintroducedanewproductwithastudyofcorporate Cambodia and China. FIAS also participated in a joint initiative social responsibility in the apparel sector and its impact on other with MIGA, the Commonwealth Secretariat, and the Pacific Islands industry sectors in the country. Cofinanced by Agence Française de Forum Secretariat to design and deliver a nine-month capacity Développement,theprojectwascarriedoutinclosecollaborationwith building program for investment promotion agencies from all 14 IFC, the World Bank, and the International Labor Organization. forum member countries. In partnership with CPDF, FIAS also initiated the first advisory FIAS'sstrategyinChinaistosupportthecentralandlocalauthoritiesin program on secure transaction in China. They advised the People's effortstoimprovetheinvestmentclimateoflaggingregions,particularly Bank of China and the Legislative Affairs Commission of the the western and northeastern parts of the country. In Liaoning prov- National People Congress on the policy and legal framework for ince, FIAS conducted a diagnostic study of the FDI environment and using movable assets as collateral. 19 CPDF In FY05, CPDF consolidated its operations in four main areas: access to finance, the business enabling environment, sustainable development, and access to business services. VariousWorldBank Group investment climate assessmentshaveidentifiedalackofaccesstofinancingasaleadingconstraint to private sector development in China. CPDF tackles this issue by enhancing the legal and regulatory framework and by providing direct technical assistance to lending institutions. Legal and regulatory initiatives include the development of a credit reporting system (Australia), the reform of a secured transactions framework (jointly with FIAS), and the preparation of a financial leasing law (Switzerland). CPDF has provided a range of TA to local financial institutions in such areas as diagnostic assessment, risk management, skillsdevelopment,andasset-liabilitymanagement(Norway).Thissupportisextendedtospecificfinancialpartnerinstitutions and to China's financial sector at large. Partner institutions have measurably increased their volume of SME business. For example, Chengdu Small Enterprises Credit Guarantee Company (Switzerland and United Kingdom) has grown more than 200 percent annually for the past three years. Creating some 7,000 new jobs, it has supported over 300 small enterprises as well as 600 self-employed workers that had been laid off from restructured state-owned enterprises. 20 PENSA: Access to Finance Program - More Loans for SMEs Obtaining finance to run and expand their businesses is a dream for many of Indonesia's micro, small, and medium enterprises. Only 20 percent of small and 50 percent of medium businesses have access to credit. Usually banks offer them only working capital loans and impose strict conditions for collateral. In addition, many SMEs do not know how to apply for credit and lack the necessary business documentation. Totacklethisproblem,PENSA'sAccesstoFinanceProgram and Swisscontact have jointly launched the Promoting Enterprise Access to Credit project, which will increase the financial skills of business development service providers through new commercial training facilities. The aim is to enablebusinessdevelopers to act as effective intermediaries between financial institutions and SMEs in need of credit. The first training facility, PEAC-Bromo, opened in Surabaya in December 2004, followed by PEAC-Monas in May 2005. Others are planned for central Java, south Sulawesi, east Kalimantan, and Bali. PEAC-Bromo's early results are encouraging. It has built good relations with the local banking community and has already facilitated Rp. 1.4 billion ($150,000) of loans to SMEs through business development service providers. Loans worth Rp. 15 billion are still being assessed. The project will also be a component of a planned SME EnhancedLendingFramework.Theframework'sothertwo PENSA: Agribusiness Linkages Program componentscomprise a credit line for up to five localbanks and a technical assistance package and incentive scheme for Following an analysis of over 30 commodities, IFC's commercialbanks.Theframeworkaimstohelplocalbanks PENSA has made seaweed, cocoa, maize and poultry the become effective financial intermediaries for smaller busi- core of its Agribusiness Linkages Program. The seaweed nesses by improving their credit skills, strengthening their project, which has been particularly successful, focuses SME lending capacity, and providing them with incentives initially on Sulawesi, with three main objectives: to lend to small businesses, especially in northern Sumatra, which has been devastated by natural disasters. · Promotingfarmercooperation,introducingbestpractice techniques to lift productivity and raise farmer incomes; · Providing market information and crop forecasting to improve communications between farmers and to increase industry transparency; and · Establishing mini-processing facilities near growing areas. Informalinterviewswithfarmerssuggestincomegrowthof 5 to 20 percent so far, which is significant in an area with widespread poverty. The program works with almost 600 farmers, a number set to increase as agribusiness linkages expand within Sulawesi and into other parts of Indonesia. 21 South Asia IFC's program in South Asia combines direct investments in projects that have high development impact with technical assistance to promote long-term, private sector­led growth. Through its technical assistance work, IFC helps sustain the increasing momentum of the region's economic development. In 2005, the region recorded growth rates among the highest in the world, mainly due to excellent private sectorperformance.AnnualIFCinvestmentcommitmentshavegrownsteadily,from$296millionin2001 to $443 million in 2005. IFC's portfolio in South Asia is diversified across investments in manufacturing, infrastructure, finance, agribusiness, information technology, oil and gas, and health care. Sustainability IFC continues to provide trust fund support to increase the development impact of its investment work by assistingclientswithsustainablebusinessapproaches,SMElinkages,andcommunitydevelopment.IFC's Corporate Citizenship Facility is working with two IFC clients in the Maldives, Villa Shipping and Trading Company and Taj Maldives, to ensure the health of coral reefs, which are vital to the country's tourism sector. The facility is funding research on coral reef conservation and rehabilitation as well as training modules that will help company personnel enhance the health, growth, and coverage of the reefs. The Corporate Citizenship Facility is also working with Powerlinks Transmission, an IFC client that is building a 1,200-kilometer electric line from Siliguri in West Bengal to the outskirts of New Delhi. The facility is helping the company implement an occupational safety and health program for utility crews servicing the transmission line. In addition, it is working with Cairn Energy, another IFC client, to develop a multistakeholder community development plan that will bring together the local govern- ment, nongovernmental organizations, and the company. This plan will complement the company's successful development of oil and gas in the southwestern Indian state of Rajasthan. In addition, the Corporate Citizenship Facility has recently completed a project supporting tribal women's self-help groups in Jharkhand, one of India's poorest states. The program linked the Self-Employed Women's Association, one of India's most successful models of informal sector enterprise development, with Krishi Gram Vikas Kendra, a community development organization. The project supported capacity building for financial literacy; introduced participants to local business 22 opportunities, including dairy cooperatives; and promoted access tourist sector. The program will focus on financial services, the busi- to integrated insurance packages for rural women. The Corporate ness enabling environment, and specific sectors such as tourism, Citizenship Facility has also approved a project to develop, test, and construction, and agribusiness. Subject to continued progress on implement a protocol for conducting environmental audits in lead the peace process, the program will expand to support the growth battery plants, with the pilot testing currently underway in India. of smaller companies in northeastern Sri Lanka. The Environmental Opportunities Facility approved three equity In India's West Bengal state, the government has asked IFC to set investments in India during FY05, encouraging the development of up an SME development program. IFC is preparing a strategy for local engineering skills. Investee companies include India's first elec- extending SEDF's current business lines to a new program for the tric car manufacturer, a start-up company producing low-cost solar state. The program will soon be submitted to IFC's development lamps, and a small-scale manufacturer of cogeneration turbines. partners for their consideration. In FY05, the IFC-Netherlands Carbon Facility concluded an emis- Strengthening the Investment Climate sions reduction purchase agreement with Balrampur Chini Mills Limited, one of India's largest sugar producers. With IFC support, SEDF'sinvestmentclimatework,whichisconductedjointlywithFIAS, the company has developed two cogeneration projects that use aims to improve the business environment for foreign and domestic bagasse, thereby reducing reliance on fossil fuels. investors. FIAS activities expanded significantly in South Asia during FY05 with the opening of a regional office in Dhaka. As a result, four InOctober2004,theSustainableFinancialMarketsFacilityandSEDF projects were completed in the region during this period. jointly launched a new Competitive Business Advantage Program in Bangladesh. Its curriculum targets financial institutions and makes In Bangladesh, SEDF and FIAS also helped identify key constraints the business case for environmentally and socially sustainable in the investment climate. In FY05, they jointly reviewed investment investment decisions. In Dhaka, 35 participants from local banks incentives and supported two roundtables on free zones and took part in a three-day program that illustrated the transformation of regulatory reform. The events attracted over 100 participants and environmental and social risks into commercial opportunities. highlighted best practice in regulatory improvements to promote investment and export growth. Organized jointly by FIAS and the During FY05, IFC Against AIDS launched a program with IFC's Bangladesh Enterprise Institute, these events received additional South Asian clients to help them address the impact of HIV/AIDS. support and technical advice from DFID, SEDF, the Canadian Support focuses on three key areas: the workplace, companies' International Development Agency, the Japan International Coop- clinical facilities, and the community. Project proposals from eration Agency, and the European Commission. The roundtable two Indian clients, Apollo Tyres and Ambuja Cement, have been led to formation of a government and private sector development approved and processed. These companies are continuing to task force under the prime minister's office. FIAS and SEDF are scale up their HIV/AIDS awareness and prevention programs in working with the task force and the Board of Investment to design the workplace and the community. They are also enhancing their a series of activities for a proposed multidonor project supporting clinics' capacity for treating sexually transmitted diseases and for private sector development. FIAS will ensure effective monitoring preventing and detecting HIV among long-distance truckers. and evaluation and has initiated a pilot project to this end. SME Development FIAS continued its assistance to Bhutan in FY05 by preparing drafting guidelines for new foreign direct investment rules and In parts of the region where political instability and difficult business regulations. The foreign direct investment framework that was environments limit investments, IFC has focused on assistance for subsequently developed is awaiting government approval. smaller companies. Through its SouthAsia Enterprise Development Facility(SEDF),IFCaimstoimprovethebusinessenablingenvironment, Public-Private Partnership strengthenprovidersofbusinessdevelopmentservices,andhelpfinan- cialinstitutionsdeveloptheirSMElendingcapacity.Thefacilitycurrently In line with our priority on infrastructure development in the region, operates in Bangladesh, Bhutan, Nepal, and northeast India. IFC Advisory Services has signed an advisory mandate with the Indian city of Bangalore to introduce private participation in its In FY05, IFC approved an SME development program for Sri Lanka water and wastewater systems. Consultants for this mandate have andtheMaldivesasanexpansionofSEDF.IFChasprovided$2million been funded by DFID and donors from the World Bank's South ofthe $10 million total funding requirement, with Netherlands and Asia Water and Sanitation project. Norway contributing additional funds for the five-year program. In response to the tsunami disaster, IFC launched a program to support the rehabilitation of smaller companies working in the 23 The SouthAsia Enterprise Development Facility aims to improve the business enabling environment, strengthen providers of business development services, and help financial institutions develop their SME lending capacity. BANGLADESH: A Consortium Helps Small Businesses Grow BIZMANTRA: An SME Toolkit for Nepal IFC's SEDF is helping service providers in Bangladesh In November 2004, SEDF collaborated with a Nepalese make comprehensive and sustainable assistance available private sector firm, Elite Networks, to launch BizMantra, to smaller businesses. In 2003, the facility supported local a toolkit for smaller companies, which account for over consultants in the launch of the Consortium for Business 80 percent of Nepal's businesses. To promote the toolkit, Development Services. SEDF has helped the consortium Elite Networks formed a consortium with a bank, a media coordinate and integrate its capabilities, enabling it to house, an insurance company, a financial firm, a legal firm, offer a wide range of fee-based management training and a marketing and business consultancy. and business consulting services to the country's smaller businesses. SEDF will continue to support the evolution The consortium is helping SMEs in Nepal improve their of the consortium into a one-stop shop that provides key management capabilities and competitiveness. BizMantra management development services to smaller enterprises provides country-specific online information on such throughout Bangladesh. issues as business forms, taxes, and export and import procedures. The consortium also benefits from this initiative in providing fee-based training, consultancy, software, financial, and other services to the SMEs. To date, managers from over 200 SMEs have been trained to use the toolkit. BizMantra has also advised the Export Council of Nepal in its negotiations with the government on VAT policy and has helped the Federation of Women EntrepreneursAssociationofNepalprepareabusinessplan using the SME toolkit. 24 HELPING THE PRIVATE SECTOR RESPOND TO THE INDIAN OCEAN TSUNAMI The devastating tsunami of December 2004 affected several countries in East and South Asia. IFC immediately set up a matching grant program, financed by FMTAAS, for selected partner companies in Indonesia, the Maldives, Sri Lanka, and Thailand. By matching the costs incurred by these companies in their response to the tsunami, IFC assisted them in stepping up their participation in the relief effort. The program helped remove infrastructure and distribution bottlenecks for relief operations and provided health services, power, communication, and clean water to affected areas. IFC committed $1.4 million to support 11 projects, ranging from water treatment plants and emergency school facilities in Indonesia to emergency telecommunications in Sri Lanka. IFC also established a special loan facility to support the recovery of tourism in the Maldives, Sri Lanka, and Thailand. In addition, IFC provided $150,000 from its corporate contingency funds to a program run by Sri Lanka's National Develop- ment Bank Group that repaired or replaced fishing boats and equipment damaged by the tsunami. The U.S. Trade and Development Agency, through IFC, helped Water Health International provide 50 water purification and disinfection systems for tsunami relief and reconstruction efforts in Sri Lanka. The agency's grant for this pilot project was cofunded by $250,000 in grants from other donors, including the Acumen Fund and Global Giving. 25 Europe and Central Asia IFC's technical assistance activity in Europe and Central Asia remains strong, led by the Private Enterprise Partnership in the former Soviet Union and a new facility launched during FY05 to serve Southeast Europe. Central and Eastern Europe In Central and Eastern Europe, IFC's technical assistance focuses on regions, sectors, and projects where our developmental role is crucial and private financing remains limited. These efforts emphasize socially and environmentally sensitive sectors. For the countries of the former Soviet Union, the transformation to market economies will likely remain a major challenge in the next few decades. IFC can make a significant contribution to accelerate this process, and ongoing work is helping to develop financial institutions, improve the business environment for small businesses, strengthen corporate governance practices, and target strategic industries by enhancing supply chains and access to markets. IFC is responding with rigor and speed to the recent stable economic performance in Russia and Ukraine, with a focus on developing efficient capital markets and infrastructure, supporting small businesses through investment and technical assistance, and increasing the financing of locally sponsored businesses. Our technical assistance program complements dynamically expanding investment activities. Commit- ments in Central and Eastern Europe reached almost $1.2 billion with an additional $245 million in syndications, the highest level ever, reflecting the region's continued growth and increasing investment opportunities. The majority of this investment went to Russia, but the largest increase was seen in Ukraine, where IFC's investment volume nearly quadrupled. Other investment activity was in Georgia, Belarus, and the Baltics. Southern Europe and Central Asia The region's cumulative technical assistance portfolio in FY05 was just over $27 million, and new spending during the year was $6.5 million. In line with the investment program, the region's technical assistance and advisory activities also focused on the financial sector, which accounted for 60 percent of project work during FY05. In particular, they help banks serve SMEs and to encourage the develop- ment of nonbank financial institutions, for example in housing finance. 26 IFC's new investment commitments in Southern Europe and Central Asia reached $811 million in FY05. We continued to emphasize SEED RESULTS support to private local banks, which in turn help improve access to finance for local private companies and small and medium Over the past five years, the Southeast Europe Enterprise enterprises. IFC also made investments in the manufacturing, Development facility (SEED) has delivered results on the infrastructure, and health and education sectors. ground through TA programs that support private sector development. Among its accomplishments, SEED has: The emphasis on technical assistance and advisory work in · Supported 73 regulatory changes affecting the business financial markets helps IFC provide growing companies with environment.Theseincludenewproductssuchasleasing, greater opportunities for access to capital that is often not readily mediation,environmentalrecycling,andbusinessassocia- available from traditional financial institutions. IFC also provided tion registration, as well as utility pricing mechanisms, inspection procedures, company registrations, and tax advice to local governments on legislation that will improve the code adjustments. business environment for new leasing companies and microfinance · Provided over 300 consulting interventions that helped lenders. The Central Asia Leasing Facility is the result of several SMEs create 1,800 jobs and raise about $28 million in years' work with local governments in Kazakhstan, the Kyrgyz financing. Evaluations indicated that, among the SMEs Republic, Tajikistan, and Uzbekistan, carried out by IFC and the that fully implemented SEED recommendations, 73 percent reported improvements and 87 percent would Private Enterprise Partnership (see below). Along with technical likely seek more consulting services in the future. assistance, the leasing facility will include investment capital to be · Trained3,700SMEs.Evaluationsindicatethat45percent provided to selected financial intermediaries. have seen improvements in their business performance. About 95 percent of SMEs indicated that they would likely seek more external training in the future. Local enterprises' access to capital can also be improved through · Trained 850 financial institution employees. Evaluations institutional strengthening and capacity building programs for showthat96percentofparticipantsgainednewskillsand regional banks that are inexperienced in lending to small busi- that 70 percent put those skills into use. SEED's work nesses. Over the past three years, IFC has completed several of has led directly to an increase in the SME portfolios of these programs, in which a resident advisor from an established several financial institutions in the region. · Trained 2,000 business service providers. Evaluations bank relocates to the region and oversees training in all areas of the show that 41 percent of these providers introduced client bank's operations, such as credit review, treasury operations, new services or products. Across the region, SEED is reporting requirements, and marketing. IFC is currently overseeing transforming the local market for the development and a new program for Podgoricka Bank in Montenegro. provision of training and consulting services. IFC also worked with clients in the real sector, where companies often require assistance as they expand or are privatized. To help, Technical Assistance Partnerships for Sustain- IFC supported financial feasibility studies to determine the most able Economic Growth viable growth options and business strategies for long-term financial sustainability. As many countries in Southern Europe face the chal- In Europe and Central Asia, IFC is providing technical assistance lenges of EU accession in the near future, a key concern for local through several programs including the Technical Assistance Trust companies is the ability to compete effectively in a much larger and Funds Program, the Foreign Investment Advisory Service, the morediverseenvironment.IFChashelpeddesignstrategiesforclients Capacity Building Facility, the Sustainable Business Assistance to ensure that they can successfully enter and remain viable in new Program, the Private Enterprise Partnership (the Partnership) in the markets. Technical assistance also supported clients who needed CIS countries and Mongolia, and the Southeast Europe Enterprise help with technical upgrades and management training on corporate Development Facility (SEED) in Albania, Bosnia and Herzegovina, governance and environmental issues to enhance their long-term FYR Macedonia, and Serbia and Montenegro. The Partnership and competitiveness. On the whole, this type of work comprised 15 to 25 SEED form cornerstones of IFC's technical assistance strategy in percent of the region's technical assistance portfolio. the region. Both facilities work with donors and other partners to promote the growth of local businesses, attract private investment, Facilitating the privatization of key industries is another goal of and improve the business enabling environment. IFC in the SECA region. In Bulgaria, teams are helping develop a restructuring and privatization strategy for the wholesale power The Southeast Europe Enterprise Development sector. In Serbia and Montenegro, IFC is working with the manage- Facility ment of one of the country's largest, state-owned electronics Effective July 1, 2005, SEED is transitioning into a larger and manufacturers to complete a full financial and operational review more strategically focused regional program, the Private Enterprise and to set up a long-term restructuring plan in preparation for Partnership for Southeast Europe (PEP-Southeast Europe), which eventual sale to a strategic investor. will cover Bulgaria, Croatia, Moldova, and Romania in addition to the countries served by SEED. This will enable IFC and donors to work 27 TAJIKISTAN: First Microfinance Bank AZERBAIJAN: The ACG/BTC Linkage Program Tajikistan is one of the poorest countries in the former IFC'stechnicalassistanceandadvisorystrategyinAzerbaijan Soviet Union, and support from IFC is vital to promoting is focused on creating more opportunities for smaller, local its private sector growth and helping raise living standards. businesses to participate in tenders in the international oil Because investment opportunities are limited, technical andgasindustry.TheACG/BTCSMELinkageProgramis assistance is the cornerstone of IFC's strategy to support a flourishing example of this. Pioneered in 2003 to comple- the private sector. In December 2004, IFC continued its ment IFC's investment in the ACG Oil fields and the BTC support of pioneering programs that help bring scarce pipeline, the program illustrates IFC's strategy of creating capital to growing small businesses by investing in the more opportunities for smaller suppliers by providing them First Microfinance Bank of Tajikistan, a joint invest- with access to financing and training programs. It is funded ment-advisory project with the Aga Khan Development withabout$2.6millionfromIFC'sCapacityBuildingFacility, Network and Germany's development bank, KfW. Over BritishPetroleum,Statoil,Unocal,andGTZ.Theprogram the past two years, IFC has played an instrumental role in delivers most of its support through the Baku Enterprise helping draft legislation allowing for establishment of the Centre, an entity that reaches growing small businesses new bank. First Microfinance Bank provides credit and though a variety of approaches and helps local companies savingsproducts to micro and small enterprises andalready in targeted sectors obtain supply contracts with BP and its has over 7,000 clients. To achieve financial sustainability subcontractors. As of April 2005, 346 local suppliers are within four years, it will benefit from a broad program receivingdirecttrainingandadvisoryservices,and540local of assistance from IFC to overcome such challenges as suppliershaveobtainedcontractswithBPanditssubcontrac- inadequate infrastructure, the need for technical training, tors. The program is also promoting the Energy Bus,which and the need to reach more women customers. is cofunded by BP and the Organization for Security and CooperationinEurope.TheEnergyBusisademonstration vehicle that disseminates information on energy-saving and alternative energy technologies to local businesses and the general public. Expected outputs of the program are increased use of energy-saving technologies (e.g., solar power and biogas), production of these technologies, and increased access to microfinance for companies unable to afford efficient and environmentally sound energy systems. As of April 2005, 950 people have attended related trainings and presentations. SERBIA: Leasing Development In Serbia, as in other countries throughout the region, limitedfinancingoptions,insufficientcollateral,andconser- vative lending practices at traditional banks are key reasons whyleasingisanimportantalternativefinancingsolutionfor businesses seeking to grow. Here SEED helped establish a leasingassociation,conductednationalawarenesscampaigns targeting 10,000 SMEs, and launched a national training program for SMEs and financial intermediaries. Since SEEDbeganitsworkinthesectorfiveyearsago,theleasing market has grown significantly--to approximately $420 million at the end of calendar 2004, with 12 new leasing companies established. SEED played a catalytic role in the passage of a landmark leasing law in 2003, by providing guidance on drafting the legislation and by coordinating input from the private sector. IFC plans to replicate this success across Southeast Europe, beginning with Albania, where the parliament adopted a leasing law in 2004. 28 together more closely to deliver technical assistance effectively while The Partnership operates in Armenia, Azerbaijan, Belarus, Georgia, integrating efforts better with investment activities. PEP-Southeast Kazakhstan, Kyrgyz Republic, Mongolia, Russia, Tajikistan, Ukraine, Europe will also include an infrastructure program (previously and Uzbekistan. All of its 270 staff are based in eight capital cities approved by IFC's Board as the Balkans Infrastructure Development and 23 regional offices throughout the region, and its management Facility). The infrastructure activities are expected to serve as a team is based in Moscow. catalyst for increased public-private partnerships in infrastructure throughout Southeast Europe. The Partnership delivers broad programs that promote private sector investment; support the creation and growth of the private sector, The Private Enterprise Partnership especially small businesses; and improve the business enabling Overview. Established in 2000 with a $4.6 million annual budget environment. Since 2000, the partnership's projects have: through FY06, the Partnership continues the technical assistance programs IFC has been carrying out in the region since 1992. In · Enabled $493 million in foreign and local investments, including July 2005, IFC's Board of Directors approved an extension of the $100 million by IFC partnership through FY11, with an annual budget of $6.07 million. · Reached 15,000 farmers and small and large companies with IFC's contribution covers the Partnership's fixed costs: program assistance and advice on a wide range of sustainable business management, accounting, human resources, impact assessment, practices information technology support, and overhead. Donors, who have · Provided in-depth consultations to 440 clients over a significant contributed $73 million since 2000, fund the technical assistance. period of time These donor partners are the governments of Austria, Bavaria, · Contributedtopassageof105newlawsoramendmentstoexisting Canada, Denmark, Finland, Iceland, Japan, the Netherlands, legislation that improved the business climate in the region Norway, Saxony, Sweden, Switzerland, the United Kingdom, the United States, and the EU. 29 The Partnership in FY05. In FY05, the Partnership implemented experience in preparing project proposals that would meet banks' 35 projects in ten countries with a total of $45 million in donor requirements. To stimulate investment in energy efficiency, IFC funding over the life of the projects. Nine of these projects were and the Global Environmental Facility will provide select Russian completed and 16 launched during this fiscal year. banks with credit lines and partial credit portfolio guarantees for energy-efficient projects. The Partnership will provide assistance in Most of the on-going projects represent the Partnership's core building energy-efficiency funding expertise in the financial sector programs in developing the financial sector, particularly leasing and among potential clients. It will also disseminate information services; strengthening corporate governance practices; developing on model deals and potential opportunities to improve the under- communities and supply chains around large companies and standing of market opportunities among the market participants projects; and improving the regulatory environment for small (Denmark, Finland, Global Environmental Facility, and Sustainable businesses. These core programs reflect the key aspects of IFC's Financial Markets Facility). strategy--to develop projects that are in demand by client countries where IFC has core competence and that have the potential to be Raising the standard of living of millions of Russians and helping replicated across countries and sectors. The Partnership develops them realize a fundamental aspiration to own a home will require innovative programs, tests and improves the implementation a developed mortgage market. Over the past several years, IFC has models during the pilot stage, builds staff expertise, and replicates become the largest financier of housing funding in Russia. Drawing the programs. This approach has allowed the Partnership to on IFC's investment expertise and knowledge of the market, the optimize the use of donor contributions and to improve results. Partnership launched a three-year technical assistance project to facilitate the creation of appropriate conditions for developing New Projects. Although the Partnership focused on delivering the primary mortgage market in Russia. The project will work its core programs, it has enjoyed a year of innovation as well. individually with up to five Russian banks to help them develop It developed and launched new projects in energy efficiency and implement world-class practices in mortgage origination, and mortgage finance in Russia and applied its vast corporate underwriting, and servicing. It will then follow up with credit lines. governance expertise and experience to design corporate gover- The Partnership will train staff of several banks and other providers nance programs for the banking sector in Russia and Ukraine. If ofmortgage-relatedservicesonmodernpracticesinhousingfinance. successful, these programs could become the core products to IFCwillalsoadvisetheRussiangovernmentagenciesontheadoption be replicated across the region. of best industry practices and standards to stimulate the growth of the mortgage market (Netherlands, Switzerland, and IFC). The demand for energy-efficient technologies in Russia is strong, however, little capital is available to adopt them. Financing such The corporate governance projects for the banking sector in Russia projects, a new area for Russian financial institutions, is perceived and Ukraine will have broad implications beyond the banking sector to be risky and complex. Moreover, potential clients have limited itself. In addition to working with local banks to help them improve ROMANIA: SUSTAINABILITY TRAINING FOR BCR BANK Romania suffers from some of Eastern Europe's worst envi- ronmental problems, and IFC is providing crucial advisory supportinthisareathroughitsSustainableFinancialMarkets Facility and Corporate Citizenship Facility. Currently IFC isimplementingatrainingprogramforthecountry's largest bank, Banca Comerciala Romana, to improve its corporate governance and to provide management and staff with the knowledgeandtoolsnecessarytoconductenvironmentaland socialriskassessmentsonBCRinvestments.Thetrainingand toolswerecustomizedtotheuniquedemandsofdoingbusi- ness in Romania and to the specific needs of BCR. To date, 400 credit officers have been trained and, as a consequence of the program, BCR received an upgraded credit rating from international credit agencies Standard & Poor's and Fitch. IFC intends to expand this model to other financial institutions throughout the region. 30 IFC HELPS A LEASING COMPANY OBTAIN FINANCING AND EXPAND MARKETS The leasing sector in Georgia has great potential. The first survey of the sector in the country, conducted by IFC, estimated a potential market for leasing between $15.3 million and $22.6 million. The survey results provided detailed information on potentialclientsbysector,companysize,andequipmentneeded.SuchinformationcouldhelpGeorgianleasingcompaniestake advantage of emerging business opportunities. GeorgianLeasingCompanysawgreatpotentialforexpandingitsoperationsacrossanumberofsectors.However,thecompany found it difficult to obtain the financing it needed to meet client demand. It turned to IFC for help to improve its operations and attract additional investment. Georgian Leasing, which mainly serves small businesses, was the first leasing company to be established in Georgia. It was founded in 2001 with the support of Tbiluniversal Bank. Although the bank enjoyed a good reputation and a stable position on the market, it could not afford to finance a capital increase in the leasing company. The GeorgiaBusinessDevelopmentProjecthelpedthecompanydevelopabusinessplantoattractotherinvestors.IFC'sleasingteam consultedwithandtrainedthecompany'sstaffinleaseaccountingandlegalissuestohelpimproveitsinternaloperationsandfinancial performance.IFCalsofacilitatedcommunicationbetweenthecompanyandtheU.S.OverseasPrivateInvestmentCorporation, which was considering investments in Georgia's leasing sector at that time. Based on the company's strong business plan and improved operations, OPIC provided a $1 million loan to the company. The project's leasing team is currently drafting changes to the leasing law to further encourage the growth of the country's leasing sector. The development of leasing will increase access to financing for local enterprises for capital investments that will bolster Georgia's economic development (Canada). A Broader View The Partnership is implementing leasing development projects in nine countries: Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Russia, Tajikistan, Ukraine, and Uzbekistan. Some of the results of the Partnership's leasing programs include the following: · In Kazakhstan, from 2002 (base year) to 2004, the number of active leasing market participants has more than tripled, the number of leasing deals has quadrupled, and the value of leasing financing has increased six-fold. · In Uzbekistan, from 2001 (base year) to 2004, the number of active leasing market participants has more than doubled, the number of leasing deals has increased by 27 percent, and the value of leasing financing has grown by 139 percent. · Legislative improvements advocated by the Partnership in Central Asia have led to the creation of an IFC-funded $30- million Central Asia leasing investment facility, for which the Partnership will provide further TA. 31 CORPORATE GOVERNANCE REFORMS HELP REGIONAL BANK ATTRACT CAPITAL Three years ago, Bank Center-Invest was searching for outside capital to finance its ambitious growth strategy. Today, after strongcorporategovernanceimprovementswiththehelpofIFC'sRussiaCorporateGovernanceProject,thebankhasattracted $22.3 million in new capital and can now provide affordable financing to small businesses across southwest Russia. Bank Center-Invest, the largest privately owned bank in Russia's southern city of Rostov-on-Don, was founded in 1992 and has played a leading role in the region's development by providing loans to small businesses and offering secure deposits to individuals. The bank's ambitions, however, went beyond local leadership in Rostov-on-Don. Its declared strategy was to become a principal source of affordable financing across Russia's southwest region. Bank Center-Invest realized that it needed to approach international banks to finance their expansion strategy. Staff from the bank attended 12 corporate training events, received 16 consultations, and underwent a full-scale corporate governance assessment and improvement plan, all conducted by IFC experts. This work was based on internationally recognized best practices, tailored to the local context, and led to concrete and demonstrable results. Bank Center-Invest has adopted its own corporate governance and ethics codes, amended its charter and internal documents to improve the bank's dividend policy and information disclosure practices, and strengthened mechanisms to protect shareholder rights. Perhaps most importantly, the bank has transformed its supervisory board into an effective and efficient source for managerial oversight and strategic decision making; it has streamlined board procedures, improved remuneration practices, and brought on board Ernst Welteke, a former president of the German Bundesbank, as an independent director. Thesechangesdidnotgounnoticed.In2004,BankCenter-Investattracted$10millioninIFCdebtfinancing.TheEuropean Bank for Reconstruction and Development also took a 25.2 percent stake, worth $7.3 million, and helped the bank open a $5 million credit facility for a five-year term. Both investments occurred in follow-up to IFC's corporate governance assessment and improvement program (Netherlands, Norway, and Switzerland). A Broader View The Partnership is implementing corporate governance projects in Azerbaijan, Georgia, Russia, and Ukraine. To promote better corporate governance practices in the region, it: · Provided advice to the governments on over 50 pieces of legislation or regulations affecting corporate governance on topics ranging from issuing additional shares to information disclosure and reporting · Provided over 10,000 consultations and 200 seminars on corporate governance to over 4,000 companies and banks in Armenia, Azerbaijan, Georgia, Russia, and Ukraine · Trained professors and introduced corporate governance topics to the curricula of over 75 universities in the region to ensure that future managers and lawyers have essential skills · Provided targeted, in-depth assistance on corporate governance to over 100 enterprises Currently IFC is negotiating over $300 million of investments in companies in Russia and Ukraine that received IFC's technical assistance on corporate governance. In Central and Eastern Europe, IFC's technical assistance focuses on regions, sectors, and projects where our developmental role is crucial and private financing remains limited. 32 their own corporate governance practices, the Partnership will help them develop and introduce policies on corporate governance in their credit assessment practices. Thus, practicing sound corporate governance will become increasingly important for companies seeking funding (Switzerland). Partnerships with New Donors. This year, the Partnership signed agreements with three new donors-- the EU, Iceland, and the Free State of Saxony. The European Commission funds the continuation of the Ukraine SME policy project, which works to improve the business enabling environment for small businesses in Ukraine with a focus on streamlining the system of permit issuance for business start-up. Iceland provided funding to carry out a survey of the fish industry in Russia. Drawing on Iceland's expertise as a world leader in this industry, IFC hopes to provide a comprehensive overview of the sector in Russia to help identify potential business and investment opportunities. The Free State of Saxony has partnered with IFC to enhance the traditional ties between this eastern German state and Russia. The first project with Saxony will complement IFC's energy efficiency investment and technical assistance program in Russia and will FIAS continued to work in partnership with donors, IFC's SEED and promote investments in energy-efficiency technologies in the Private Enterprise Partnership, and other World Bank Group units. Russian Volga region. In Tajikistan, FIAS and MIGA are starting a joint two-year program Improving the Environment for Foreign Direct to improve the investment environment as well as the design and Investment capacity of the relevant institutions. In Bosnia and Herzegovina, FIAS and SEED helped the municipality of Gradiska remove admin- istrative barriers; FIAS has initiated similar projects in several other Europe and Central Asia remain high on FIAS's agenda, particularly municipalities. In the Russian Federation, FIAS conducted an regarding the removal of administrative barriers to investment. administrative barriers project in the city of Magadan City in collabo- In FY05, 11 projects were completed in the region; six related to ration with the Partnership, with FIAS focusing on the regional and administrativebarriersinAlbania,Armenia,BosniaandHerzegovina, federal level and the Partnership facilitating a government-business Poland, Romania, and Russia. dialogue. In Armenia and Georgia, FIAS findings were integrated into country Poverty Reduction Support Credits. In FYI Macedonia, FIAS launched several pilots, including projects on corporate social FIAS is helping institutionalize business environment reform and is responsibility and the land market in Russia and on competition introducing regulatory review practices that are consistent with EU policy in Turkey. The project in Turkey involved joint work with the norms; this activity will feed into a similar World Bank project. FIAS government and the private sector in setting up an International is also collaborating with SEED and the U.S. Agency for International Investment Council. The council has recommended a number of Development to develop a robust public-private dialogue on the priorityreforms,allofwhichhavebeenimplemented.InRussia,FIAS business environment. isdesigningsolutionstoimprovelandprivatizationforbusinesses;this includes a monitoring system measuring the impact of reform. The project is cofinanced by the EU and involves close collaboration with World Bank projects. 33 UZBEK ENTREPRENEURS GAIN LEGAL AWARENESS AND FIGHT CORRUPTION Komiljon Khaydarov owns a small café in Uzbekistan's Ferghana Valley. For many years, his business suffered from unauthorized inspections by various government agencies. According to Mr. Khaydarov, such inspections paralyzed his business and affected his business partners and clients negatively. To avoid problems with the inspection authorities, Mr. Khaydarov, like thousands of other Uzbek entrepreneurs, chose to make unofficial payments. An IFC survey of such small businesses uncovered the issue of unauthorized inspections and low awareness of rights among entrepreneurs. We have been conducting annual surveys of this sector in Uzbekistan since 2001 with support from the Swiss State Secretariat for Economic Affairs. These surveys help IFC and the Uzbekistan government identify key issues of focus so as to remove constraints to SME growth and to monitor progress over time. Today, at the request of the government, the Partnership's Uzbekistan SME policy project focuses on the improvement of the inspections regime. The project works closely with the Ministry of Justice and its Department for Protection of Entre- preneurs' Rights on developing policies to curb unplanned inspections, fight abuse of power by the regulatory authorities, and raise overall legal awareness across the country. The recently published brochure, What One Needs to Know about Inspections, has proved to be an effective instrument to increase SMEs' understanding of their rights and responsibilities. The brochure, produced by the partnership's SME policy project in cooperation with the Uzbekistan Ministry of Justice, is an easy-to-read, step-by-step handbook that explains what entrepreneurs should know about inspections. To date, over 32,000 copies of the brochure, including reprints in local newspapers, have been distributed in Uzbekistan and Russia through local business associations and government agencies. To satisfy the growing demand in the business community for the vital information the brochure contains, IFC's SME policy project gave local administrations permission to reprint the brochure. Having read the brochure, Mr. Khaydarov now has more confidence in facing future inspections. He says that from now on every inspector will face a serious test on proper inspection procedures before entering his café. IFC's recent poll showed that 84 percent of Uzbek entrepreneurs value the content of the brochure and 49 percent actually referred to it in the course of inspections (Switzerland). The Partnership is implementing similar policy projects in Belarus, Tajikistan, and Ukraine. COMMERCIAL LOANS FOR RENEWABLE ENERGY IFC has an environmental finance program that acts as a catalyst for new private lending for energy efficiency and renewable energy projects. In Central and Eastern Europe, for example, IFC helps local banks learn to finance energy efficiency upgrades profitably through a combination of technical assistance and risk-sharing facilities. In Hungary alone, this program has mobilized $120 million in new loans to date through our guarantees (Austria). This model is now being replicated in the Baltics, the Czech Republic, and Slovakia, where we have already acted as a catalyst for $40 million in local lending. 34 Latin America and the Caribbean In FY05, IFC continued to integrate its noninvestment work into investment activities across the region. Through our investments, technical assistance, and advisory services, we promoted social and economic inclusion and were able to reach underserved segments of the economy, especially the low- and middle-income housing sectors; micro, small and medium enterprises; and indigenous groups. To help clients cope with the challenges of globalization, IFC also provided assistance with deepening local capital markets, improving corporate governance, strengthening global competitive- ness, and addressing environmental issues. With a view to helping promote broad-based growth, IFC put special emphasis on high-growth industries. Technical assistance continued to develop into a key component of IFC's activity in the region. The increase in demand for such assistance is being met largely through donor support. Resources contributed by the donor community have been used to intervene effectively in such diverse areas as the investment climate, the financial sector, small business capacity building, and renewable energy. With this support, IFC has reinforced its delivery capability by establishing the LAC Technical Assistance Facility, a multidonor-funded regional facility, approved by the Board in 2003. The facility began programs in Bolivia, Honduras, Nicaragua, and Peru in FY04, and it has become a central vehicle for providing IFC's technical assistance. IFC's technical assistance and investment strategies reflect macroeconomic developments. In FY05, the economy of Latin America and the Caribbean rebounded from years of crisis. Growth was 5.5 percent during 2004--up from 2 percent the previous year--and remained strong into 2005. This growth reflected an upswing in exports of commodities to China, a growing U.S. economy, and effective fiscal and debt management that has lowered country risks. But the region continues to compare unfavorably with other emerging markets in investment climate, domestic financial sectors, and infra- structure. Social tensions from growing inequality have hampered the development of a broad-based private sector and the benefits of growth have yet to reach poorer segments of the population. 35 LAC TA Facility implementation to a more wholesale approach, the facility has also launched a municipal toolkit for simplifying business regulations. In the past year, the efforts of the LAC TA Facility centered on This toolkit will allow self-implementation for simplification projects improving the business enabling environment, enhancing local in small and medium municipalities. The toolkit was disseminated benefits from IFC investments, and strengthening the competitive- to approximately 30 Bolivian municipalities in FY05. ness of small businesses. In the finance sector, the facility has focused on improving the Improving the Business Enabling Environment business environment through leasing development. Based on a To improve the business enabling environment, the facility's pilot initiative in Bolivia, projects have been developed in Central program focused on two issues: municipal business simplification America. Primary operations have included sectoral diagnostics and leasing development. Local governments are often the first in Bolivia, Honduras, and Nicaragua; formation of the first public- point of interaction for businesses. According to many studies, private sector joint leasing working group in Bolivia; and the first they impose particularly high administrative burden on the private comprehensive leasing seminar in Bolivia, which drew over 80 key sector. Consequently, the facility has focused on projects that stakeholders. As a result of the work in Bolivia, a political agreement simplify regulatory procedures, especially business registration at was reached to introduce a new leasing law, which was sent to the municipal level. Working at the local level enables the facilityCongress in June 2005. to tailor its assistance to the specific needs of the client. Enhancing Local Benefits Based on the success of a municipal business simplification pilot The second key focus for the facility during FY05 was enhancing project in Bolivia (see box), the program has been scaled up there local benefits. Consistent with IFC's sustainability agenda, the work and elsewhere in the region, using shared methodology, resources, in this area helps private investment add value to local stakeholders, and expertise. Municipal business simplification projects were such as neighboring communities. In addition, it strengthens the replicated in seven cities in Honduras, Nicaragua, and Peru during investment by making it more sustainable. The facility carried FY05; national simplification plans based on the Bolivian model out pilot projects in Bolivia, Colombia, and Peru. In Peru, Minera also have been prepared for Nicaragua and Peru. In Colombia, a Yanacocha,oneoftheworld'slargestandmostproductivegoldmines, national online guide based on the Bolivian model is under develop- benefitedfromthisapproach.Agrowthenginefortheregion,themine ment. With the aim of moving from individual project development is expected to generate public resources of up to $100 million within the next few years. However, there is criticism that local benefits from the mine have not been proportional to its success. To address this issue and reduce conflicts between nearby residents and the BOLIVIA: Simplifying Business Regulations mine, IFC has undertaken several technical assistance initiatives to improve the project's sustainability (see box). Orient Express Hotels In FY04, the LAC TA Facility embarked on its first (and its subsidiary PeruRail), an IFC client in the tourism industry, municipal business simplification pilot project in La Paz, Bolivia. The project has yielded several important results is another example where the facility enhanced the benefits of IFC's and laid the groundwork for the facility's municipal busi- investment for the local community. The facility helped include local ness simplification program. Among the most important enterprises in the hotel's supply chains through food production and outputs were streamlined procedures for registering a new entertainment contracts, and it evaluated the hotel's demand and business and an innovative public administration informa- tion technology platform (www.ci-lapaz.gov.bo) that allows farmers' supply capacity for specific agricultural products. In Bolivia, citizens to track their registration online. In addition to a the facility has been exploring a linkages project with Transierra, significant reduction in the number of steps and the time a gas pipeline. Here, in FY05, IFC invested funds and mobilized required to register a business, the pilot has led to an financing from others to support participatory economic and social increase in registered businesses and associated municipal development at the local level. revenues. It has also increased transparency, improved public relations for the municipality (as evidenced in part by the mayor's reelection), and brought micro, small, and In addition, the facility has been working to promote corporate social medium businesses into the formal economy. responsibilityactivitiesamongtheprivatesectorfirmsinColombiaand Peruasawaytoincreaselocalbenefitsfromprivatesectorinvestments. Theeffortproducedanationaladministrativesimplification InFY05,acorporatesocialresponsibilitymappingstudywascompleted planthatcanbereplicatedthroughoutthecountry,withlead municipalitiesineachoftheprovincescompletingsimplifica- toidentifybestpractices,andstrategicallianceswereformedwithkey tion programs by the end of calendar year 2005. Another private and public organizations to increase awareness of corporate remarkableoutputisanationalonlineguidetoadministrative social responsibility and support strategy implementation. procedures which has catalogued over 150 procedures from 30 government ministries (www.tramitesbolivia.gov.bo). 36 PERU: Broader Benefits from Mining IFC is helping companies in the mining sector upgrade their social and environmental performance so that more local people benefit from their operations. In addition to financing, it is providing training and technical assistance that build stronger ties among these companies, the surrounding communities, and the smaller businesses that can serve as suppliers of goods and services. These actions are aimed at promoting sustainable economic development around the mining projects. In Peru, for example, IFC is undertaking a pilot program to help local municipalities in the Cajamarca region strengthen their capacity to managefundsavailablefromtheminingcompaniestoincreasetransparencyandaccountability.Theeffortisbeingundertaken incoordinationwiththeWorldBank.Ithasalsoassistedlocalsmallbusinessesinimprovingtheirbusinessskillsandincreasing theirsalesthroughlocalNGOsandserviceproviders.TheSMElinkageprogramsupportssmallsuppliersinconstructionand agricultureandfacilitatesaccesstofinancingandbusinesstraining.MineraYanacochahassetupafoundationthatisundertaking programs in community development in health care, education, agriculture, agroforestry, and microfinance. Strengthening the Competitiveness of Smaller Other support to improve competitiveness included producing Businesses and disseminating the Spanish version of IFC's SME Toolkit (www. The third key focus of the LAC TA Facility is strengthening the smetoolkit.org)1 and conducting a workshop for over 60 small competitiveness of small businesses to promote value-added textile companies in Arequipa, Peru, to improve their operational exports from these businesses. Designing projects based on the management and production capacity. specific SME needs in a given country, the facility built on prior initiatives. It made significant progress on important programs in Other Technical Assistance indigenous enterprise development and on strengthening small businesses in the wood sector. In FY05, IFC continued promoting the availability of housing financing in the region, an effort that combines investments and The indigenous enterprise development program in Bolivia success- technical assistance. In addition to investing in the housing sectors fully expanded its pilot project, which aimed to open market of El Savlador, Colombia, Mexico, and Peru, IFC is expanding its opportunities for indigenous handicraft producers by linking them technical assistance. Building on previous analyses, the Corpora- to international retailers (see box). tion is conducting a feasibility study, with trust fund support, to analyze the potential for improving access to housing and In Bolivia and Nicaragua, the facility emphasized the wood sector social services. The results of the feasibility study will support because of its high potential for growth. In Bolivia, the facility used implementation of the Global Home Township project, which is results from a diagnostic study it had undertaken to assist three expected to facilitate capital expenditures in excess of $27 million. enterprises with internal reorganization and systems upgrades The project will help improve access to housing and social services and business plans to raise working capital, including from a local through an integrated community approach in El Salvador, where venture capital fund. One participant raised over $300,000 upon people continue to face increased urbanization and high rates of program completion. For an SME alliance with the World Wildlife unemployment (IFC TA Fund). Fund, the facility also initiated an international forestry certification process to strengthen linkages between suppliers of wood and small businesses that produce wood products. In Nicaragua, the facility's assistance included upgrades to financial management BOLIVIA: Linking Indigenous Producers to International and accounting systems and development of marketing tools Retailers (including an online catalog) for a group of smaller businesses The LAC TA Facility assisted eight small businesses in called Exchange. The facility also provided audit preparation placing their products in the catalogs and online store of support to facilitate four small businesses' exports; helped launch an international retailer. Two of them doubled their annual a Web portal for a national wood sector platform (www.maderas- exportsalesasaresultoftheseorders.Thefacilityalsohelped nicaragua.com); and supported a trade fair that promoted small onebusinessplaceitsproductsinafeaturearticleofBenetton's businesses at local and international markets. A partnership has Colors magazine, organized a design workshop to improve design quality and innovation for indigenous producers, and been established with World Wildlife Fund Central America to delivered capacity building projects to boost the exports of develop further sector-strengthening projects. the businesses that participated in the project. 1A web-based business source for information, software applications, and online training IFC has developed and customized in different languages over the last few years. In LAC, IFC developed a Caribbean-customized SME Toolkit with trust fund support in FY03 (Japan and Switzerland). 37 In line with IFC's sustainability agenda, IFC also supported environ- To promote sustainability, IFC is assisting Vinncler Oil and Gas, mentally and socially responsible projects in Brazil and Venezuela. a Venezuelan company engaged in oil and gas exploration and In Brazil, IFC is studying the power sector, where supply depends production, with environmental and social management and heavily on hydropower. This effort includes a preliminary feasibility providing $36 million in financing (see box). study of privately held wind-power projects under the Proinfa program, an incentive program for developing alternative energy Improving the Investment Climate sources, including wind, biomass, and small hydro projects that is sponsored by the country's Ministry of Energy and Mines. IFC is FIAS completed eight advisory projects in the LAC region during also reviewing power purchase agreements and assessing risks and FY05, with a strong focus on the Caribbean and Central America. regulatory issues related to the Proinfa program. The Corporation is Technical assistance covered a wide range of areas that constrain supporting development of renewable energy projects in Brazil and private investment. This included the diagnosis of the investment has financed wind-power projects in other countries. Studying the climate and support for governments to prepare new investment power sector will help IFC understand the overall structure under laws and set up business forums. In Antigua and Barbuda, FIAS development and identify next steps. During the first phase, it is assisted in establishing an investment promotion agency and anticipated that the Proinfa program, which should be operational amending the investment code. FIAS also helped the government of by December 2006, will generate 1,100 MW of power from wind, Nicaragua design and implement a reform of administrative barriers biomass, and small hydro sources and attract approximately following a joint assessment with the World Bank. In addition, FIAS $2.5 billion in investments (IFC TA Fund). also helped Nicaragua introduce a legal and institutional framework for competition policy and helped both Nicaragua and Honduras reform their labor-skills training programs. In the past year, the efforts of the LAC TA Facility centered on improving the business enabling environment, enhancing local benefits from IFC investments, and strengthening the competitiveness of small businesses. VENEZUELA: Upgrading Social and Environmental Management IFC helped Venezuela's Vinncler Oil and Gas develop a suitable environmental and social management framework to support the company's anticipated expansion (Spain). The technical assistance project assessed the procedures, practices, and policies the company used to manage envi- ronmentalpolicies,healthandsafetyissues,workerrelations, and internal and external communications. Based on this analysis, IFC assisted Vinncler in developing an environ- mental and social management system. It will improve procedures in a number of important areas, including acci- dent prevention, transportation and disposal of hazardous products,contractswithpart-timelaborandsubcontractors, project-related compensations or resettlements, and social development work with local communities. 38 Middle East and North Africa In addition to long-term capital, IFC now widely uses its technical assistance to introduce best practices across the Middle East and North Africa. The integration of such assistance with investments forms a key part of IFC's regional strategy, which focuses on ways to move countries toward greater development and more open economies through support to the private sector. The MENA region spans a diverse set of countries, from Morocco in the west to Pakistan in the east. These countries vary in wealth, stages of development, and openness to private sector development. But most of them have a greater public-sector orientation and a less-developed private sector than developing countries in other regions. Pressing problems of unemployment, especially for the growing young population, pose serious challenges throughout the region. To address that challenge, countries in the region need to open their economies to competition and expand the private sector. An improved investment climate and privatization of state-owned enterprises should help attract more FDI and further mobilize the real sector of the economy. Other needs that can benefit from technical assistance include financial sector development, improvements in infrastructure, services and financing for smaller businesses, and greater access to health and education. Technical assistance is especially urgent in frontier economies such as Afghanistan, Iraq, the West Bank and Gaza, and Yemen. Training and capacity building in the private sector, updating and upgrading of the regulatory environment for business, and public-private partnerships to facilitate privatization of state- owned enterprises are among the areas where donor-funded initiatives can make a real difference. IFC's technical assistance complements a committed investment portfolio of roughly $1.2 billion in 15 countries in the region, with the largest concentration of investments in Pakistan and Egypt. IFC has recently added three new countries to this regional portfolio: Afghanistan, Iran, and Iraq. Private Enterprise Partnership - Middle East and North Africa In October 2004, IFC launched a new technical assistance facility, the Private Enterprise Partnership for the Middle East and North Africa, which consolidated two existing facilities, the North Africa Enterprise 39 Development (NAED) and the Private Enterprise Partnership Middle sector's ability to create jobs, increase investment in the region, and East, and expanded its services to all countries in the region. accelerate economic growth, through its focus on the financial sector, small businesses, the business environment, and privatization. Since its establishment, PEP-MENA has designed innovative programs aimed at four focus areas: Financial Sector Strengthening PEP-MENA helps strengthen existing financial institutions in · Financial sector strengthening corporate governance, risk management, credit assessment, and · SME development marketing. It also supports the creation of new specialized financial · Business enabling and regulatory environment institutions and instruments, mainly to deepen the financial sector · Privatizing of state-owned enterprises and public-private partner- and increase access to financing for smaller businesses. Specific ships financial instruments will vary according to the market sophistica- tion of individual countries but will include housing finance, leasing, PEP-MENA has extended or launched seven technical assistance microfinance, venture capital, and credit bureaus. programs with signed initiatives in 13 countries in line with its focus areas. Through both technical assistance and investments, PEP-MENA is working to improve the business enabling environments and to Regional Scope and Funding build the capacity of local financial institutions. In the SME Bank Through PEP-MENA, IFC is increasing delivery capabilities and Advisory Program, both the Commercial International Bank (Egypt) broadening the range of services to support an expanded group of and the BIAT bank (Tunisia) advisory projects are linked to IFC's 19 countries in the region. The facility, with its planned three-year investments. In Jordan, IFC is carrying out business development duration, has a target budget of $100 million. In addition to IFC's activities in the leasing sector, while PEP-MENA's leasing program contribution of $20 million, PEP-MENA has obtained commitments is working with the Jordanian government on improving the legal of a further $44.5 million (see box), of which a total of $22 million and regulatory framework. are firm commitments from Japan ($10 million), the Netherlands ($2 million) and the United States ($10 million). PEP-MENA is To avoid duplication of efforts and waste resources, coordination currently finalizing grant commitments with the other donors, and strong collaboration within the World Bank Group and with including with the United States for an additional $5 million. other donors are essential in technical assistance. PEP-MENA has been working in collaboration with IFC's Global Financial The facility has headquarters in the IFC regional hub office in Cairo Markets Department to launch housing finance and credit bureau and staff on the ground in Algiers, Algeria; Rabat, Morocco; Sana'a, technical assistance programs. PEP-MENA is also working with the Republic of Yemen; Amman, Jordan; Islamabad, Pakistan; and World Bank's Consultative Group to Assist the Poorest to develop a Dubai, United Arab Emirates.1 microfinance or downscaling program in the MENA region. Program The PEP-MENA SME Bank Advisory Program builds on NAED's PEP- MENA's program is tailored to the specific needs of the private success in helping banks that serve the corporate market in Egypt sector.Itfindscreativeandpracticalsolutionstostrengthenthebusiness and Morocco scale down to the small business market. PEP-MENA PEP-MENA DONOR COMMITMENTS June 2005 (US$Millions) Canada 2.5 France 2.6 Islamic Development Bank 5.0 Japan 10.0 Kuwait 2.0 Netherlands 2.0 United Kingdom 5.4 United States 15.0 IFC 20.0 Total 64.5 40 1For more information on these offices, please contact the regional hub office in Cairo (see Directory for contact details). is currently implementing its Bank Advisory Program in the region, with new mandates in Algeria, Egypt, Saudi Arabia, and Tunisia. EGYPT: Developing Small Business Finance Mandates range from advice in risk management and developing a small business lending strategy to adapting corporate lending to Most commercial banks in Egypt are eager to develop small business and micro lending. theirretailandsmallbusinessoperationsbecausecorporate banking is extremely competitive. To support this effort, PEP-MENA has been working with the Commercial The MENA Leasing Development Program recently concluded an International Bank to help it define its small business agreement to build the capacity of Afghanistan Finance Company, strategy and improve its underwriting procedures. Six a USAID-sponsored leasing company in Afghanistan. Specifically, training sessions on risk management, Basel II compliance, the facility will help standardize underwriting procedures and and credit rating tools were delivered to 120 credit officers. practices and strengthen internal controls. The company's staff will A comprehensive review of the retail and small business lending and collections processes was carried out, and the subsequently receive training in Pakistan, at Orix Leasing Pakistan, PEP-MENA team is now monitoring implementation of a long-time IFC technical partner in the region. In Yemen, PEP- the operational recommendations. MENA and the Central Bank of Yemen jointly organized a national conference on leasing. In Jordan, IFC is currently in discussions with the government on providing advisory services to improve the existing Jordanian temporary leasing law. PEP-MENA is also approaching businesses through sector-specific business membership organizations. It is negotiating a partnership The recently launched Corporate Governance Program aims to with the Pakistan Association of Auto Parts and Accessories strengthen corporate governance in the region through a series of Manufacturers and is exploring potential support for an information country-based projects. This aim is supported by four objectives: technology organization to enhance its members' managerial skills, upgrade their technology, and to improve their competitiveness. · To improve the governance practices of banks and corporations A large business membership organization program is also being · To help develop an effective corporate governance framework implemented in Algeria and Morocco. Preliminary output and · To increase the training capacity of educational and corporate impact measurement for this initiative mainly reveals that real governance institutions leverage can be obtained by working with these organizations on · To conduct a campaign to educate the businesses community issues affecting the business enabling environment. about the importance of corporate governance In Afghanistan, PEP-MENA is designing a pilot project to support SME Development processing operations for dried fruits and nuts, a key sector for the country. This work involved consultation with a wide range of stake- In the MENA region, small and medium enterprises represent over holders, including the government, private sectors and donors. 90 percent of private sector business and are the main generators of employment. Thus, promoting small business development in the PEP-MENA, in line with IFC's focus on women's economic develop- region has a strong impact on job creation and poverty reduction. ment as a fundamental pillar of its activities, has established its Activities in this area support these businesses mainly through Gender Entrepreneurship Market program for the MENA region. intermediaries, such as business development service providers and business membership organizations, and by increasing the Business Enabling and Regulatory Environment availability of management training. IFC seeks to improve the business climate for the private sector IFC's SME management development program, Business Edge, is by identifying and removing key constraints that private foreign rollingouttraininginJordan,theWestBankandGaza,Yemen,Saudi direct investors face. Activities include removing administrative Arabia, and Oman. The program will support local training organiza- barriers to entry; reducing regulatory burdens; and improving laws, tions in meeting management training needs by providing IFC's regulations, investment codes, and commercial codes. PEP-MENA Business Edge products and tools. The suite of products consists of has been working in collaboration with various World Bank Group 36 management workbooks, workshops, and trainer manuals in five units to avoid duplication of effort. topic areas: marketing, human resources, finance and accounting, productivityskills,and operations and quality management. As of the · PEP-MENA has been cooperating with FIAS and World Bank staff end of the fiscal year, IFC had signed 20 agreements with training to conduct a study on administrative barriers to investment at the firms in the region and had trained over 100 trainers on Business request of the Egyptian minister of investment. The World Bank Edge methodology. In turn, the training partners had trained 1,500 nominatedtheprojectasagoodpracticemodel.Thestudywillserve small business owners and managers. as the basis for additional technical assistance initiatives in Egypt. · In Pakistan, a scoping mission on alternative dispute resolution through mediation has been conducted, a project strongly 41 example is the privatization of a government-owned Lebanese bank EGYPT: Expanding Microfinance where PEP-MENA is providing valuation advice to the Lebanese Central Bank. PEP-MENA also supports public-private partnerships IFC helped Banque Misr, Egypt's second-largest state-run in infrastructure to allow the efficient flow of resources, with a bank with 400 branches, successfully enter a market esti- particular focus on power, telecommunications, transportation, and mated to have 1.8 million microenterprises. IFC designed a pilot project to ease the bank's entrance into this market water. In this activity, PEP-MENA cooperates closely with the World in a safe and commercially viable manner. At the end of the Bank and IFC's Advisory Services Department. pilot phase, Banque Misr had disbursed more than 6,400 micro and small loans in seven months for a total of about Improving the Investment Climate and FDI $3 million with near-perfect repayment rates. The average Environment loan size was $470. Thebankisnow committed to expanding these operations. In the Middle East, FIAS stepped up its activities in the region and With women clients already representing 24 percent of the completed three projects in FY05. During the year, FIAS projects microfinance portfolio, this project is helping Egypt reach in the region included a study to streamline administrative barriers anotheroftheMillenniumDevelopmentGoals:promoting to investment in Egypt. The study, a component of the investment gender equality and empowering women. climate assessment led by the MENA region of the World Bank, was conducted jointly with PEP-MENA and brought together FIAS's global experience with investment climate reforms and supported by the government, judiciary, law professionals, and PEP-MENA's local presence. FIAS is also conducting a diagnostic private sector. PEP-MENA plans to launch a pilot project in of the foreign direct investment environment in Syria to identify Pakistan to implement this type of mediation for commercial reform priorities and promote economic diversification. In addition, dispute resolution. The main components include training for it is also participating in the OECD-led initiative on mobilizing judges and lawyers on mediation, certification of mediators, investment for growth in MENA. establishment of a pilot mediation center to resolve cases, and a public awareness campaign. It is expected that the pilot will FIAS reengaged in Pakistan after a five-year gap and completed eventually be replicated. three projects during FY05. It provided assistance in reviewing · Programs originated by NAED are still being implemented to administrative barriers to investment, based on findings drawn from promote foreign direct investment in the Tangier region of Moroccofocus group interviews, a survey of 700 firms, and the first ever and to support the nonoil export environment in Algeria. Doing Business-FIAS collaborative Business Intermediary Survey. Privatizing of State-owned Enterprises and For the first time, FIAS initiated a value-chain analysis of six key Public-Private Partnerships sectors, a project jointly managed by FIAS and the World Bank's South Asia Private Sector Development group. The project also benefited from involvement of other units in the World Bank Group: Many countries in the MENA region have an economy dominated the Investment Climate unit, Poverty Reduction and Economic by state-owned enterprises. Large parts of the public sector are Management, Rural Development unit, and PEP-MENA. Finally, a plagued by inefficiencies, red tape, and monopolies. service sector scoping project was conducted that highlighted the key issues and suggested preliminary areas for reform in tourism, PEP-MENA's aim is to help governments privatize state-owned retail, and housing construction. enterprises to increase efficiency and effectiveness. One recent CORPORATE GOVERNANCE PROGRAM IN THE MENA REGION The Corporate Governance Program currently features two projects in Lebanon. The first is a survey on corporate gover- nance practices of Lebanese banks, as well as a legal review of Lebanon's corporate governance framework in the banking sector. Building on the concrete results from the first project, the second IFC project comprises a full corporate governance assessment of a leading Lebanese bank, including a set of recommendations and an implementation plan. The Corporate Governance Program is also in the process of launching two large-scale projects in Pakistan and Egypt and a series of targeted interventions in other MENA countries, for example, a workshop in the West Bank and Gaza; drafting a voluntary corporate governance charter for banks in Jordan; organizing a high-level corporate conference for the financial sector in the UAE, together with a corporate governance survey and handbook; and supporting the OECD's efforts to raise awareness of corporate governance and provide policy advice to the public sector across the entire MENA region. 42 YEMEN: Providing Management Training to Entrepreneurs For the first time in Yemen, PEP-MENA delivered a three-day training workshop in Arabic, "How to Market and Promote Training to SMEs." Fourteen representatives of training firms attended the workshop. Mini three-hour lectures on the same topic were then delivered at the Chamber of Commerce in Taiz and at the Social Fund for Development in Sana'a to over 50 participants. This new product is supporting training firms by building their capacity to market programs to small businesses. ALGERIA: Improving the Environment for Small Businesses IFC has been working closely with the 100-member National Association of Exporters in Algeria to promote the development of nonoil exports. Activities include two nationalexportstrategyworkshops,aninformation-sharing conference that reached 300 participants, three specific export manuals, and written recommendations to authori- ties to improve the enabling environment. IFC has been building the capacity of the Club of the Contractors and Industrialists of Mitidja, a 500-member smallbusinessassociationlocatedsoutheastofAlgiers.This effort included establishing an information and commu- nication unit and conducting five regional management training sessions based on the SME toolkit that attracted 73 attendees. With the support of IFC, the club introduced fees for training for the first time. With CARE, a leading think-tank, IFC held the first conference on family business issues and challenges in Algeria, which raised awareness on the need for a more qualification-oriented employment system. IFCisbuildingthecapacityofConseilNationalConsultatif pour la promotion de la Petite et Moyenne Entreprise, the highest council for small business development in Algeria. Thecapacitybuildingincludestheestablishmentofaproject management unit within the organization to coordinate all donor-funded small business programs in Algeria. 43 3 Global Programs and Technical Assistance Initiatives 44 Technical Assistance Trust Funds Program The TATF program provides funding mainly for one-time technical assistance projects that help promote private sector development in IFC client countries. Primarily designed to facilitate and complement IFC investments, these projects allow us to offer integrated solutions combining commercial engagements and technical assistance. TATF projects also serve as catalysts for long-term TA activities such as IFC's Sustainable Business Assistance Program. A key element of IFC's TA since 1988, TATF projects range from company-specific interventions, including feasibility studies and capacity building training programs, to advisory services for the governments of client countries. Requests for funding are normally initiated by IFC's operational staff in regional, industry, and specialist departments as well as in field-based facilities. Wide demand from IFC's various operational departments is reflected in the program's broad sector coverage. Most TATF funding pays for international and local consultants that provide services in client countries for up to 12 months. While some of the trust funds are tied to hiring experts only from donor countries, the majority allow the limited engagement of local specialists. In FY05, the TATF program funded 104 technical assistance projects in 62 countries with a total value of $15.6million. During the same year, donors, including IFC, contributed $15.5 million. Currently, the program has 41 active funding agreements from 24 donor countries or agencies. With the expected dynamic growth of IFC's investment over the next three years, the TATF program is likely to expand given the Corporation's advanced integration of TA and operational business. Against this background, it is important for IFC to have sufficient and diverse sources of funding, giving us access to a broad range of experienced consultants. To ensure the high quality of the TATF Program, IFC is in discussion with new donor countries while replenishing contributions from existing partners. Trust Funds Department The TATF program is managed by IFC's Trust Funds Department, which also coordinates IFC's relation- ships with donors and collaboration with foundations and the philanthropic community. The department is also in charge of the Corporation's Funding Mechanism for Technical Assistance and Advisory Services and provides operational support to donor-funded operations at headquarters and in the field. 45 Trends Strong Focus on Lower Income and High-risk Countries Approvals for technical assistance projects have decreased this year due to a shift to other longer term TA arrangements and the Under the TATF program, projects were carried out in 62 coun- creation of stand-alone projects managed by other donor-funded tries. Of the 104 TA projects, 86 (85 percent) targeted low and operations. The increase in donor contributions in FY05 followed lower middle-income-countries, and 62 (59 percent) countries two consecutive years of less extensive replenishments and high with very high-risk ratings. values of TA approvals. Country Income TATF IFC Investment Fiscal Year 01 02 03 04 05 Activity Activity TA projects approved 128 137 132 135 104 Low Income 32 (31%) 56 (23%) Value of approvals 15.6 14.9 17.6 23.3 15.6 Lower Middle Income 56 (54%) 129 (53%) Average TA Upper Middle Income 2 (2%) 34 (14%) project value ($ m) 0.122 0.109 0.133 0.173 0.150 High Income 0 (0%) 1 (0%) Number of large approvals* 23 17 26 17 23 N/A (Global/Regional) 14 (13%) 24 (10%) Annual contributions ($ m) 14 22.9 11.3 9.7 15.5 Annual disbursements ($ m) 11.8 12.2 11.9 13.6 13.4 Number of main TATF vs IFC Investment (Based on Number of Activities) trust funds 37 40 46 44 41 IFC TATF Activity IFC Investment Activity 60% * Large approvals are those in excess of US$200,000 50% 40% TATF TA Approved FY01 - FY05 30% 140 20% 120 10% 100 0% Low Lower Upper High N/A 80 Middle Middle (Global/ 60 Regional 40 Country Risk Rating TATF IFC Investment 20 Activity Activity 0 FY2001 FY2002 FY2003 FY2004 FY2005 <30-Not Rated 42 (40%) 64 (26%) 30-45 20 (19%) 41 (17%) >45-60 13 (13%) 76 (31%) TATF Annual Contributions FY01 - FY05 (US $ millions) >60 15 (14%) 39 (16%) N/A (Global/Regional) 14 (13%) 24 (10%) 25 20 TATF vs IFC Investment (Based on Number of Activities) 15 10 IFC TATF Activity IFC Investment Activity 50% 5 40% 0 30% FY2001 FY2002 FY2003 FY2004 FY2005 20% 10% 0% <30-nr 30-45 >45-60 >60 N/A (Global/ Regional 46 Asia Leads the Regions Together,EastAsiaandthePacificandSouthAsiareceivednearlyhalfofthefundingandrankedfirstinthenumberofTAprojectsfunded through the TATF program. Demand was particularly strong in China, the Philippines, Vietnam, and Cambodia. Europe and Central Asia ranked second, because of extensive work in Serbia and Montenegro, Ukraine, Kazakhstan, and Russia. TATF FY05 Technical Assistance Approvals ($'000s), by Donor Country and Region Donor Sub-Saharan East Asia & South Europe & Latin America Middle East Global Total Africa The Pacific Asia Central Asia & The Carribean & North Africa Australia - 66 - - - - - 66 Austria - - - 196 - - - 196 Belgium 128 - - - - - - 128 Denmark - 45 - 150 - - - 195 Finland - 309 - 150 - - - 459 France - 430 - - - - - 430 Greece - - - 100 - - - 100 Germany - 235 - 90 230 - - 555 IFC TA Fund 1,152 663 174 580 310 - 100 2,979 Ireland 54 - - - - - - 54 Israel 30 100 - - - - - 130 Italy - - - 544 - - - 544 Japan - 1,500 - 500 - - 454 2,454 Luxembourg 50 100 - - - - - 150 Netherlands 531 1,540 136 585 136 - - 2,928 New Zealand - 76 - - - - - 76 Norway - 321 - - - - - 321 Spain - 602 - 91 344 276 - 1,313 Sweden - 566 59 326 - - 129 1,080 Switzerland 192 570 - 70 50 - 100 982 United Kingdom - - - 200 - - - 200 USA - - 250 - - - - 250 TOTAL ($ thousands) 2,137 7,123 619 3,582 1,070 276 783 15,590 Percent 14% 45% 4% 23% 7% 2% 5% 100% Number of Approvals 17 40 7 24 10 1 5 104 Percent 16% 38% 7% 23% 10% 1% 5% 100% TATF FY05 Approvals, by Value and by Number (in percentage terms) TATF FY05 Recipients of Most TA, by Country Country Approval Amount No. of Sub-Saharan Africa By Value By Number (US$.): Approvals East Asia & The Pacific China 2,016,384 14 Philippines 1,441,000 7 South Asia Serbia and Montenegro 1,057,390 10 Vietnam 660,000 3 Europe & Central Asia Congo Republic 628,000 2 Cambodia 611,000 3 Latin America & Ukraine 515,000 4 The Caribbean Kazakhstan 500,000 1 Russian Federation 400,000 3 Middle East & India 316,000 5 North Africa Global 0% 10% 20% 30% 40% 50% 47 Financial Sector Continues to be Important Today, fewer than 25 percent of the people living in developing countrieshaveaccesstoformalfinancialservices,comparedtoup to90percentindevelopedmarkets.Financialsectordevelopment isaprimarymotorofeconomicgrowthandbenefitsespeciallythe poor. IFC has therefore continued to emphasize strengthening of domestic capital markets in developing countries, resulting in a large number of TA projects in financial services. The extension of financial services to previously underserved segments of the economy, including micro, small, and medium businesses remains a major objective of IFC's global financial markets technical assistance work. To date, approximately 100 projects worth $76 million are under way globally. IFC and our donor partners support this work, which provides local financial institutions with specialized expertise to build their capacity in key areas, including microfinance, banking and SME financing, housing financing, leasing, environmental financing, insurance, credit bureaus, and securities markets. Today, fewer than 25 percent of the TATF FY05 Number of Assignments and Approval Amounts, By Sector people living in developing countries Sector Name Number Amount ($) have access to formal financial services, Multisector TA 54 7,475,080 Financial Services 23 4,083,006 compared to up to 90 percent in Infrastructure 11 1,531,975 Manufacturing & Industry 10 1,850,991 developed markets. Food & Agribusiness 4 385,950 Health Care & Education 2 263,000 Total 104 15,590,002 TATF FY05 Number of Assignments, By Sector Multisector TA Financial Services Infrastructure Manufacturing and Industry Food and Agribusiness Health Care and Education 0 15 30 45 60 48 Many TA Projects are Related to IFC Investments IFC's regional departments are increasingly recognizing TA business as an integral part of their operations and placing more emphasis on linking technical assistance with investments. More than half the 104 technical assistance projects approved this year supported IFC's investments through such activities as project identification, feasibilitystudies,and training programs. IFC also provided extensive technical assistance to regulatory agencies directly through projects on investment climate and business enabling environment. Number of Assignments, by TA Type Number of Assignments IFC Project-Related 56 Business Enabling Environment 21 Sector Reviews/Project Identification 19 Training and Capacity Strengthening 19 SME Support 13 Others 10 Privatization/Corporate Advisory Services 3 * These categories are not mutually exclusive TATF FY05 Number of Assignments, By TA Type IFC Project-Related Enabling Environment Sector Reviews/Project Identification Training and Capacity Strengthening SME Support Others Privatization/Corporate Advisory 0 15 30 45 60 49 Foreign Investment Advisory Service FIAS is a joint operation of IFC and the World Bank that advises developing country governments on how to attract and retain foreign direct investment (FDI) and maximize its impact on poverty reduction. Since its founding in 1985, FIAS has advised more than 130 countries on more than 600 projects. FIAS focusesitsworkinsixcoreareas:investmentclimatediagnostics,FDIpoliciesandregulations,administra- tive barriers reform, investment promotion, sector-focused solutions, and corporate social responsibility. In FY05, FIAS completed 74 projects, including 16 knowledge management projects. The largest number were carried out in East Asia and Pacific (17), followed by Sub-Saharan Africa (15), Europe and Central Asia (11), Latin America and the Caribbean (8), South Asia (4) and the Middle East and North Africa (3). FIAS completed 43 advisory projects (74 percent) in high-risk or low-income countries. New pilot products included access to finance, corporate social responsibility, contract enforcement, industry sector-focused solutions, and land markets. Promising Patterns in FDI and Implications for Developing Countries Low-income countries experienced a 50 percent increase in FDI inflows between 2000 and 2004, with India's service sector and the oil and gas sectors in Africa accounting for most of the rise. In 2004, inflows increased for all regions except the Middle East and North Africa. The sources of such investment are increasingly varied, and "south-to-south" flows have expanded, from 17 percent of total FDI to developing countries in 1995 to 30 percent in 2001. New providers of FDI tend to be better equipped to invest in difficult and remote markets and to tailor products and services to developing country consumers. FDI has also expanded into such economic sectors as banking, retail, construction, tourism, and offshore services. This means that more countries can develop comparative advantages in more sectors. To win FDI in this increasingly competitive market, developing countries need to lift the remaining restrictions to investment and resolve microeconomic problems. 50 FIAS's Strategy FIAS's technical assistance program was the first to be included in IFC's client surveys. In the 2004 survey, 73 percent of clients rated FIAS's three-year strategy, covering FY05 to FY07, emphasizes a the performance of FIAS projects as "very good" or "excellent" in multiyear and multiproduct approach to working with committed terms of long-term development impact in the client country. To client countries, so that initial diagnostic studies are followed gather client feedback on FIAS performance as soon as projects by solution design and eventually the implementation of priority havebeencompleted,FIAShasalsodevelopedaprojectassessment recommendations. This approach ensures a greater emphasis on survey, which has been piloted in Albania, Cambodia, and Fiji. To outcomes and sustainability of the reform process; it moves FIAS obtaindonors'feedback,FIASisalsodevelopingadonorassessment from a focus on diagnostics to providing more support for solution survey, which is being piloted by its Asia-Pacific regional office. design and implementation of reforms. It pays special attention to broader stakeholder engagement, the sequencing of specific FIAS monitors the implementation status of key project recom- recommendations for implementation, the choice of institutions, mendations over a period of three years after the completion of a and the skills and incentives that determine the behavior of the project. In FY05, FIAS started to upgrade its monitoring system by authorities involved. This approach is being used successfully in establishing consistent classification and identification of project countries as varied as Fiji, Kenya, Sierra Leone, and Turkey. outcome and impact indicators for all its products. FIAS also started pilot benchmarking projects in Sierra Leone and Bangladesh. In During the first year of implementing the strategy, FIAS received addition, a case study on the impact of projects in Latvia and two strong backing from donors. In March 2005, IFC's Board endorsed videos on the impact of FIAS work in Russia and Latvia have been a proposaltoincrease contributions from IFC and other donors by 50 prepared. A video project documenting a program in Sierra Leone percent in order to support the growth envisaged for the program. has been initiated. FIAS was the subject of three independent evaluations over the last two years: an evaluation of the Asia-Pacific Strengthening Partnerships for Better Outcomes regional program, a review of the Administrative Barriers product, and an evaluation by IFC's Operations Evaluation Group of its Leveraging its activities with other parts of the World Bank Group, investment climate activities. Results were positive in all of these as well as with multilateral and bilateral donors, is key to FIAS's evaluations. FIAS has decided to undertake independent external success. To enhance the implementation of its projects, FIAS is evaluation of its work on a regular basis. collaborating in about 20 projects with IFC's regional facilities. There are also about 12 joint projects with MIGA, in countries including Armenia, Azerbaijan, Bhutan, Cambodia, China, Kenya, Tajikistan, and Vietnam. Leveraging from and feeding into the World Bank's private sector programs is also critical to FIAS's efforts to support the design and implementation stages of reform. With a few exceptions, FIAS's projects have some connection with at least one World Bank program in a given region. FIAS also developed and cosponsored the global Private Sector Development Learning Program, a series of comprehensive knowl- edge development workshops on key investment climate issues that aim to help practitioners sharpen skills in diagnosing, designing, and implementing reforms. To allow maximum participation of Bank Group regional offices, workshops were carried out in South Africa, Thailand, and Turkey, as well as in Washington. The learning materials were also used in training workshops with the govern- ments of Bangladesh and Senegal. Monitoring and Evaluation FIAS evaluates its performance, the extent to which interventions achievetheirobjectives,andwaysfutureimpactcanbeimproved.To a great extent, the success of any project depends on its design. To improvedesign,theprojectbrief,whichformsthebasisofeachproject proposal,hasbeenupgradedtoincorporatestakeholderanalysis,risk assessment, and monitoring and evaluation mechanisms. 51 FIAS OPERATING FRAMEWORK Project Inputs, Activities, & Outputs Outcomes Impact Identification of Policy/ Improvement Increased Growth recommendations regulatory in investment domestic and poverty for policy/ changes climate and foreign reduction regulatory changes implemented and direct pro-poor investment investment flows climate 52 Sustainable Business Assistance Program SBAP is part of IFC's guidance and leadership in shaping sustainable private sector activities in emerging markets. Launched in July 2002, it responds to a steady increase in demand among clients for our assistance in managing the risks and opportunities presented by the social and environmental performance of their products and operations. The program comprises three donor-funded facilities: the Corporate Citizenship Facility (CCF), the SustainableFinancialMarketsFacility(SFMF),andtheEnvironmentalOpportunitiesFacility(EOF).These facilities enable IFC to promote corporate social responsibility in IFC client companies, enhance the environmental and social impact of financial intermediaries, and finance innovative projects that promote local environmental benefits. All three emphasize innovation, engagement, replication, and leadership as key themes in choosing initiatives that will help reduce poverty and improve governance. The SBAP facilities are multiyear, donor-funded operations managed by IFC's Environment and Social DevelopmentDepartment.DeliveringonPromises,areportpublishedbyIFCinOctober2004,highlightsthe positive impact the program is having on the Corporation's investment projects in developing countries. Corporate Citizenship Facility CCF helps IFC clients respond to rapidly changing expectations about the environmental and social performance of their businesses. These expectations now affect all sectors and scales of business activity in emerging markets and are having direct and immediate effects on business competitive- ness, markets and market access, and brand identity. CCF support is available to clients who wish to implement social and environmental best practices and see them as business opportunities. CCF provides technical assistance that acts as a catalyst and that leverages cost-sharing with sponsors. The facility's support focuses on labor practices, communities and other stakeholders, and environmental stewardship. CCF is now phasing in an evaluation program of this work. The results of which will be disseminated to the private sector in emerging markets. Examples of projects approved in FY05 include · Socioeconomic study for the Marlin mine, Guatemala: CCF is funding this study so that the impacts of the mine and related technical assistance programs can be monitored. CCF also worked with the company's foundation to establish community-run tree nurseries. IFC's LAC TA Facility is pursuing other community development projects. 53 partners it was delivered in 10 locations around the world. SFMF also began building a network of regional service providers to provide financial intermediary training at a local level and share best practices and lessons learned. · Sustainability index for the Sao Paolo stock exchange: The index, being developed with SFMF's help, will list Brazilian companies that meet high standards of corporate governance, environmental, and social performance. · Banca Comerciala Romana's sustainable investment program: Support for Romania's largest commercial bank, an IFC client, included reviewing environmental management procedures and the investment pipeline and portfolio to prioritize environmental risk management measures. An institution-wide training plan was designed to provide staff with tools to conduct environmental and social risk assessments. · Socially responsible investment in Asia: Market research was conducted to examine the social, environmental, and ethical risks for the main sectors in seven Asian countries. By raising international and domestic awareness of Asian opportunities for SRI, the project contributes to an improved investment climate. · Small farmer bamboo agroforestry, Vietnam: CCF is helping IFC's MPDFandtheglobalmanufacturer,IKEA,implementaprogramto Environmental Opportunities Facility build a sustainable supply chain for the country's bamboo-based wood products industry. Bamboo will be made into wooden The EOF acts as a catalyst by providing project preparation grants flooring for sale by IKEA. and flexible investment financing for innovative private sector proj- · Pro-poor tourism, South Africa: CCF is supporting a pro-poor ects, primarily to address local environmental issues. Target sectors tourism consortium in developing guidelines for building partner- include environmental infrastructure services, pollution abatement, ships with communities, including boosting local input in the and improvements in the sustainable use of resources. The facility tourism supply chain, stimulating local tourism products and aims to overcome the barriers to investment in these sectors and to SMEs, and addressing pro-poor issues within a company. move projects toward commercial viability. EOF helps IFC push the · Human Rights Impact Assessment Guide: CCF is supporting market toward adopting new business models and technologies that the Prince of Wales International Business Leaders Forum in address the most immediate environmental problems of developing developing a human rights impact assessment guide for the countries. Eligible projects can either produce goods or services with private sector in developing markets. significant environmental benefits or increase the sustainability of resource use through improvements in eco-efficiency. Sustainable Financial Markets Facility FY05 highlights include IFC's investments in the financial sector now represent about 35 percent of its portfolio, and financial intermediary projects present· New projects: EOF has approved an equity investment of up to a unique opportunity for broader development impact. SFMF $1 million in REVA, a U.S.-Indian joint venture in Bangalore, to works with the financial sector in developing countries to enhance help increase its manufacture of electric cars. EOF is making a the environmental and social impact of IFC's intermediaries and the $1.2 million equity investment in MBA Polymers, U.S. start-up, broadermarket.IFChelpsthesectorusesustainabilityto build better to allow it to construct the first commercial recycling plant for and more competitive businesses and to increase environmentally high grade plastics in China. and socially responsible investment in developing countries. · Cleaner Production Initiative: Drawing on lessons learned from grants made to promote cleaner production initiatives among Highlights of FY05 include IFC's clients, EOF embarked on a larger initiative to identify cleaner production opportunities in IFC's portfolio. One goal · Competitive Business Advantage Program: This program trains of the grants program is to assess whether it will be viable for emerging market financial institutions to manage environmental commercial banks to support cleaner production finance as a and social opportunities and risks. In cooperation with regional new product line. 54 DOING MORE WITH YOUR MONEY - Leveraging Private Sector Investment for Sustainable Development By leveraging a combination of donor funds and commercial investment, IFC is helping local banks in Central and Eastern Europe, Russia, and China establish profitable businesses lending for sustainable energy projects, including energy efficiency and renewable energy. These are sectors that, to date, have achieved only a small fraction of their potential in the global market. As IFC's recent successes have shown, working through local financial intermediaries can yield substantial impacts in establishing self-sustaining markets for sustainable energy finance. Meeting the demand for smaller-scale investment in sustainable energy Recognizing the need for innovation in environmental finance, IFC created the Environmental Finance Group in 1995, bringing together market specialists with expertise in carbon finance, energy efficiency, renewable energy, and biodiversity to craft new models for commercial finance of environmentally beneficial investment projects. Using support from the Global Environment Facility to overcome market barriers, IFC has been able to test new investment models that otherwise would not be viable. Working closely with the Corporation's investment departments and employing donor funds, this group has established a business model to support substantial levels of commercial lending by partner banks for sustainable energy projects. Going beyond grants-- enabling lending for sustainable business IFC provides client banks and leasing companies with credit lines and credit enhancement packages, including loan guarantees. In parallel, clients receive technical assistance to help them structure and market financial products that match the commercial opportunity. Examples range from loans for gas or biomass cogeneration, to housing renovations and small run-of-the-river hydro and wind generation projects. The lending banks focus on building a lending pipeline of strong credits and selling their financial products to the client group they are targeting. IFC's support enables them to see these projects as regular business that fits their strategic focus, rather than as specialized sustainable energy deals. The model was first piloted in Hungary using Global Environment Facility funding for technical assistance and guarantees. IFC subsequently invested in the guarantee facility, leveraging donor support from the Netherlands and Austria to establish a substantial lending market for sustainable energy in Hungary. IFC followed this pilot with a region-wide program across Central Europe, and further innovations and adaptations of the model are underway in China, Egypt, and Russia. Enabling lending for sustainable business has become a key feature of IFC's current business plan, and it is expected to contribute significantly to the Corporation's bottom line. It also demonstrates IFC's policy of stimulating private sector development to achieve sustainable economic development. A recent reorganization within IFC has created an institutional focal point for replicating this approach on a large scale, while continuing to innovate with new products and approaches. This will enable ever-larger levels of commercial investment across a range of sectors, with a high potential for sustainability and development impact. The EOF acts as a catalyst by providing project preparation grants and flexible investment financing for innovative private sector projects, primarily to address local environmental issues. 55 · Emerging impacts: - An earlier grant to Water Health International to conduct SFMF PROMOTES SUSTAINABLE ENERGY FINANCING TO feasibility studies for entering the potable water market in EAST ASIAN BANKS targeted emerging market countries led to a $1.2 million equity investment to fund expansions in Ghana, India, and the InMay2005,SFMFintroducedbankingsectorrepresenta- Philippines.Itwasmatchedbyfundingfromsociallyresponsible tives from Cambodia, Lao PDR, Indonesia, Mongolia, the Philippines, and Vietnam to the financial and envi- venture firms. Through this expansion and an emergency ronmental opportunities offered by financing sustainable, tsunami response in Sri Lanka, the company is estimated to small-scale, decentralized energy solutions. reach 150,000 people through EOF's financing and support. - In Mexico, a grant to a lime producer, Grupo Calidra, to apply Run jointly with the East Asia Energy Unit of the World an innovative water vapor recovery technology has resulted Bank, a workshop demonstrated the profitability and viability of well-structured and well-executed investments in an 89 percent water recovery rate in the pilot plant. The in sustainable energy. It formed part of a regional confer- company plans to replicate this technology at 10 other plants ence on energy poverty, and participants included high- in arid areas. level government officials, bankers, entrepreneurs, and - In Pakistan, a grant to Gul Ahmed Textiles helped the firm NGOs from the six countries. move towards green labeling standards in its wastewater Theeventfocusedontheimportanceofenergyinachieving treatment. Costs of the firm's expansion project have been the Millennium Development Goals in education, health, cut significantly as a result of IFC's technical assistance. and poverty reduction. It also highlighted the role of East - In Brazil, a grant to a sustainable forestry company, Precious Asian countries in contributing to the objectives of the Woods, to explore incremental nontimber revenue streams has Global Village Energy Partnership, which aims to provide 58,000 communities and 400 million individuals with propelled its entry into the market for carbon credit sales. access to modern energy services. - In Tanzania,anEOFgranthasbeeninstrumentalinintroducing a local bank to a small irrigation foot-pump manufacturer. 56 Capacity Building Facility Through its Capacity Building Facility, IFC provides grants for innovative projects and pilots that support the development of small and medium enterprises. Since its launch in 2000, the CBF has approved $26.7 million in grant funding for 137 projects. In FY05, CBF approved nine new projects, finishing the year with an active portfolio of 57 projects. In addition to supporting smaller enterprises directly, CBF-funded projects allow IFC to test various models for SME development and to share lessons learned. The facility also helps IFC form partnerships with other organizations to help ensure best practice in the Corporation's SME-focused technical assistance. To be eligible for CBF funding, a project must · Allow for replication or expansion by IFC or external organizations · Offer sustainable products or services, with a focus on improving revenue generation for direct service providers · Receive cofunding, with the CBF typically covering up to 40 percent of the budget · Provide a strategic fit with an IFC or World Bank initiative Focus Areas for CBF Projects Increasing Access to Finance CBF-funded technical assistance projects involve work with banks, leasing companies, and microfinance institutions to complement IFC's investments in the financial sector. The facility focuses on strengthening financial institutions by improving processes and systems that encourage SME lending. The CBF assists microfinance institutions in reaching commercial sustainability. It helps improve credit scoring and develop new products for micro, small, and medium enterprises. These activities enable financial institutions to serve small business clients more effectively. Nearly a third of CBF projects aim to improve SMEs' access to finance. 57 IMPROVING ACCESS TO FINANCE The CBF recently completed a project aimed at improving SME access to finance with Bank South Pacific in Papua New Guinea. Bank South Pacific is the only nationally incorporated and locallyownedcommercialbankinthecountry.Byacquiring the government-owned PNG Banking Corporation in 2002, Bank South Pacific became the country's largest bank, with more than half the market. The acquisition allowed the bank to extend its services throughout Papua New Guinea. The bank's small loans business was hampered by diffi- culties in analyzing and processing loan applications. In addition, processing systems were not cost-effective, and Linking Local Firms to IFC Investments they limited the growth of small business financing. At the IFC's linkage programs give small businesses unique opportunities same time, licensed and unlicensed lenders were achieving significantgrowthintheirloanportfolios.Inresponse,IFC's to benefit from large investment projects, particularly those with IFC Pacific Enterprise Development Facility conducted a full participation. Linkage projects accomplish this goal by strengthening credit-processing assessment funded entirely by the bank. local suppliers, facilitating access to finance, strengthening supply and distribution chains, and supporting community development Based on the findings, the bank introduced a credit scoring projects. This work expands the impact of FDI. In addition to giving system to improve small loan processing across its 40 branches. The project was implemented by PEDF with localcommunitiesandbusinessesastakeintheinvestmentprojects, nearly $100,000 in CBF funding. the programs help project sponsors reduce their dependence on imported products and services. Linkage projects comprise nearly The project significantly increased the bank's small loan 22 percent of the facility's portfolio. portfolio and broadened its geographic coverage. · The new system changed the bank's image dramatically Strengthening Local Business and Management Skills and has made loans more accessible to prospective rural The CBF promotes development of an efficient business services borrowers. In August 2004, the bank had approved 234 infrastructure that can provide management training, small business loans amounting to 13.2 million kina ($4.3 million). In consulting, market information, and entrepreneurship development February2005,numbershadrisento2,475loansand40.4 million kina ($13.1 million). During the same period the programs to local firms. These programs often partner with nonprofit bank also increased its lending staff from 8 to 22. organizationsthathelplocalbusinessesaccessinternationalmarkets. · Capacity to reach more rural borrowers was enhanced CBF programs also train local consultants and design service prod- substantially. Under the new system, loan origination ucts for local business service providers. These capacity building from provincial centers increased from 26 to 70 percent. programs account for 35 percent of the facility's portfolio. · Reduced processing costs enabled the bank to extend its client base by cutting its minimum loan size from 1,000 kina ($324) to 500 kina ($162). Information Technology · Nonperforming loans originating under the new system The CBF has funded innovative projects that harness the Internet remained under $30,000, indicating a potential for or use other new technologies to further the development of smaller further risk taking. companies. For example, the facility has supported Web-based portals that connect small-scale producers to information and markets. Funding has also been provided for the rollout of the SME Toolkit, a global Web-based tool that helps smaller businesses improve management practices, build capacity, and access capital and buyers worldwide. Improving the Business Environment The CBF aims to strengthen business associations, enabling them to improve the quality of services to their members and their ability to advocate reform. 58 In addition to supporting smaller enterprises directly, CBF-funded projects allow IFC to test various models for SME development and to share lessons learned. 59 Strengthening Grassroots Business Initiative SGBI seeks to strengthen and scale up enterprises that create opportunities for the poorest people, empowering and engaging them as entrepreneurs, consumers, employees, and suppliers. These enterprises, referred to as grassroots business organizations, do business with a social mission, creating sustainable income and extending essential products and services such as water and medicines to those who need it most. While these often small scale enterprises fulfill important roles in their local economies, their potential tends to be constrained by a lack of business expertise, inadequate access to affordable and appropriate financing,andlimitedmarketaccessandinformation.Incollaborationwithitspartners,theSGBIprovides theseenterpriseswithacomprehensivepackageofservices,includingtechnicalassistanceandfinancing through patient capital and grants. The initiative's emphasis will shift increasingly from providing support on the retail level toward building sustainable local institutional capacity to provide financing and toward scaling up services to a much largernumberofenterprises.LessonsfromSGBI'sworkontheretaillevelwillthenbefedintothecreation and strengthening of wholesale activities. Crucial to this transition is a rigorous, cost-effective, and participatory monitoring and evaluation system that the initiative has set up to track business performance and socioeconomic impact on a continuous basis. This system is used as a learning tool for the grassroots business organizations, and to guide the SGBI's program activities and communicate results to donors. Launched in May 2004, SGBI currently works in Africa, East and South Asia, and Latin America. 60 Funding SGBI LESSONS LEARNED In FY04 and FY05, IFC and the World Bank jointly funded the SGBI's core budget. For the next three years, IFC will provide core funding, · Most grassroots business organizations lack strategic with cofinancing from Canada and the Netherlands. The initiative is focus and management capacity. They require a combi- discussing a further increase and diversification of its funding with nation of financial and technical assistance that IFC is in a good position to provide. several donor agencies, foundations, and corporations. · More innovative, patient, yet commercially-minded funding sources are needed to support the long-term Role within the World Bank Group development of grassroots business organizations. The structure of such investments and expectations of return In the past, most grassroots business organizations were too need to be suited to the nature of these enterprises. · Itiscrucialtohaveahands-on,business-savvy,in-country small and unconventional in their structure and business model presence to assist grassroots business organizations, and to be eligible for direct funding from the World Bank Group. This this presence needs to be sustained over a relatively long situation began to change several years ago with small grants from period to build local capacity successfully. the World Bank's Development Marketplace and IFC's Capacity · Grassroots business organizations transitioning from Building Facility. Indeed, these interactions led to the creation NGOstocommercialenterprisesmayfinditchallenging to move away from a subsidy approach. It is key that of the SGBI, and several of the initiative's ongoing projects are theseorganizations'leadershavealong-termperspective former Development Marketplace winners or projects funded by and willingness to build a more effective and sustainable the CBF. The initiative is now helping these enterprises scale up business. and institutionalize the projects. · Local ownership by grassroots business organizations and partner organizations is critical to success. Thus, SGBI yields practical and direct benefits and fills a valuable niche in the World Bank Group by providing a service that comple- ments existing development programs for smaller companies, microfinance, and the private sector. In many ways, SGBI's role is analogous to the World Bank Group's support for the microfinance sector through investments and institutions such as the Consultative Group to Assist the Poor. SGBI's experience with and evaluation of retail and wholesale projects helps generate an institutional infrastructure to support the creation, scaling up, and replication of grassroots business organizations in the longer term. For more information on SGBI, please see: http://www.ifc.org/gbo. The initiative's emphasis will shift increasingly from providing support on the retail level toward building sustainable local institutional capacity to provide financing and toward scaling up services to a much larger number of enterprises. 61 Other Technical Assistance Initiatives and Programs IFC supports private sector development in areas such as sustainability and infrastructure through a number of other technical assistance activities. Infrastructure Development Collaboration Partnership Fund Created in 2003, DevCo aims to increase private sector involvement in the infrastructure services of developing countries. It supports the work of IFC's Advisory Services Department on infrastructure transactions, and is a multidonor facility supported by the Netherlands, the Swedish International Development Cooperation Agency, the UK Department for International Development, and IFC. DevCo provided technical assistance funding for 12 IFC advisory mandates in FY05, including port, airport, and power projects in Madagascar; coal mining in Mozambique; water projects in India and Pakistan; railways in Kenya and Uganda; power, water, and urban transport projects in the Philippines; airports in Nigeria; and an airline in Samoa. In addition, nine potential mandates were identified. With Moatize Coal Mine (Mozambique) and Tamatave Port (Madagascar), two advisory mandates were successfully completed in FY05. IFC Against AIDS The IFC Against AIDS program was created because many companies in developing countries felt the need to address the effects of the AIDS crisis on their workers and their communities. In many parts of the world, HIV/AIDS is as much a business issue as it is a health and humanitarian concern. IFC Against AIDS works with client companies to develop tools and advice tailored to address workforce and community-related concerns stemming from the disease. In addition to Africa, where IFC Against AIDS has extensive experience, the program has worked in the Caribbean. It is now collaborating with clients in South Asia and Russia to develop proactive strategies against AIDS. 62 Gender Entrepreneurship Markets Global Business School Network Women's participation in the formal labor force is now close IFC's Global Business School Network is creating a public-private to 40 percent, and almost a third of all registered businesses partnership to strengthen the skills of managers in emerging markets around the world are owned by women. Yet, despite women's by expanding and enhancing opportunities for management educa- potential contribution to economic growth and poverty reduction, tion and training. In partnering with business schools around the in the emerging markets women remain more likely than men to world, the network enhances the institutional capacity of business be trapped in the informal sector. To better leverage the untapped schools in emerging markets, enabling them to provide a stronger potential of women as well as men throughout its operations, IFC pool of management talent to local, regional, and multinational has established Gender Entrpreneurship Markets, a cross-cutting firms and organizations. Supporting the development of business gender initiative. Launched in December 2004, the program seeks education helps rejuvenate the private sector; supports develop- to unleashhiddenvalue in business opportunities and add important ment of self-sustaining, innovative economies; and enhances the capacity to IFC's development mission. Women are an underserved international competitiveness of local firms. market and a big opportunity for business cooperation, and their empowerment is a development imperative. Africa--where women By improving future leaders' access to high-quality management run a large percentage of smaller companies but own less than five education,thenetworkcontributestopovertyreductionindeveloping percent of property in their own right--will be the primary focus of countries. Several projects began in FY05 in Africa and Asia with the program for the first two years. This initiative is providing these support from a variety of donor trust funds. women with advice on markets and best practice and is assisting financial institutions and business development firms in delivering profitable services and support to them. Supporting the development of business education helps rejuvenate the private sector; supports development of self- sustaining, innovative economies; and enhances the international competitiveness of local firms. 63 4 Annexes, Directory, and Glossary 64 ANNEXES Technical IFC Donor-Supported Cumulative Directory Glossary Assistance and Technical Assistance Financial Advisory Services Programs: Commitments Projects Locations and Purpose/Strategy 66 91 94 98 100 65 Technical Assistance and Advisory Services Projects CBF Capacity Building Facility PEDF Pacific Enterprise Development Facility CCF Corporate Citizenship Facility PENSA Program for Eastern Indonesia SME Assistance CPDF China Project Development Facility PEP Private Enterprise Partnership EOF Environmental Opportunities Facility PEP-Africa Private Enterprise Partnership for Africa FIAS Foreign Investment Advisory Service PEP-MENA Private Enterprise Partnership for Middle East and North Africa FMTAAS Funding Mechanism for Technical Assistance and Advisory Services PEP-SE Private Enterprise Partnership ­ Southeast Europe GBSN Global Business School Network SEDF SouthAsia Enterprise Development Facility LACP Latin America and the Caribbean Technical Assistance Facility SFMF Sustainable Financial Markets Facility Linkages IFC's program to link its larger investments with local small businesses SGBI Strengthening Grassroots Business Initiative MPDF Mekong Private Sector Development Facility TATF Technical Assistance Trust Funds Program PROJECT PROJECT DESCRIPTION DONOR PROGRAM Sub-Saharan Africa Regional Business Development Services To design services to increase small firms' productivity in Netherlands TATF specific industries in Kenya and Madagascar. Chad-Cameroon To provide local entrepreneurs with training and IFC FMTAAS Capacity Building contracting opportunities, to build capacity of the Petroleum Revenues Oversight and Control Committee, and to provide institutional support to Chad's Ministry of Petroleum. Cleaner Production Technical To implement technical changes and reduce local air Netherlands EOF Assistance for chromium smelter pollution. East Africa Credit Scoring Tool To develop an SME credit scoring tool in partnership with IFC CBF the Tanzania, Kenya, and Uganda Bankers' Institute. FDI Solutions To review non-fiscal incentives for investment, in parallel Core Funds FIAS with an IMF review of fiscal incentives, in the EAC countries, in order to provide recommendations on how and to what extent harmonization of investment incentives should be implemented. Honey Care To use an innovative payment system to increase the IFC SGBI income of small-scale honey farmers in Kenya and Tanzania. Lusophone Business School To identify and propose a program of institutional Switzerland GBSN Networks capacity building for management training institutions in Angola, Cape Verde, Guinea-Bissau, Mozambique, and Sao Tome and Principe. Promoting Sustainable Agribusiness To develop and test timber certification protocols and Norway CCF Commodities provide training in sustainable forest management PEP-Africa practices. Railway Privatization and SMEs To incorporate outsourcing and spin-off opportunities IFC Linkages for SMEs in the privatization of a railway in Kenya and Uganda Roundabout Playpumps To operate over 500 playpumps (children's merry-go- IFC SGBI rounds that serve as pumps for clean drinking water) in South Africa, Mozambique, Swaziland, and Uganda. SME Entrepreneurship Development To provide business development services for SMEs IFC PEP-Africa Initiative and to support creation of a more enabling business Netherlands environment. 66 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Support and Training Entrepreneur- To help micro and small enterprises in Chad, Mali, Netherlands TATF ship Program (STEP) and Nigeria grow and integrate into the mainstream economy. Cameroon Indigenous Peoples Community To support the Foundation for Environment and Develop- Norway CCF Development ment in formulating a long-term development plan for pygmy communities affected by the Chad-Cameroon oil pipeline. Chad Chad SME Program To accelerate growth by providing local entrepreneurs IFC Linkages CBF with training, access to finance, and contract opportuni- Netherlands FMTAAS ties with oil companies and their subcontractors. FINADEV Tchad Access to Finance To help FINADEV Tchad develop management informa- IFC FMTAAS tion, IT, and accounting systems. Democratic Republic of Congo To facilitate the founding of ProCredit Bank and IFC TATF ProCredit Bank Technical Assis- contribute to its long-term vitality. tance Democratic Republic of Congo To contribute to improving the general business Belgium TATF SME Needs Assessment environment and access to finance, information, and consultancy services for the country's SMEs. Democratic Republic of Congo Administrative Barrier Solutions To conduct a two-phase administrative barriers study. Core Funds FIAS ProCredit Bank Technical To facilitate the founding of ProCredit Bank and IFC TATF Assistance contribute to its long-term vitality. SME Needs Assessment To contribute to improving the general business Belgium TATF environment and access to finance, information, and consultancy services for the country's SMEs. Gabon FDI Solutions To conduct a diagnostic study to identify main obstacles Core Funds FIAS that prevent foreign investment in the nonoil sectors of the economy in Gabon. Ghana Africap - Kumasi Iron Workers To study environmental health and safety risks to workers Netherlands SFMF and find ways to optimize production processes. Agribusiness Value Chain Analysis To analyze inefficiencies along the value chain and Netherlands TATF recommend interventions to improve competitiveness. Cooperative Credit Unions To help credit unions improve their financial manage- Core Funds PEP-Africa Association Project ment and improve staff skills. Housing Market Study To foster mortgage origination and construction financing Switzerland TATF for high-quality, affordable housing. Promoting Private Sector To improve the capacity of microfinance institutions United PEP-Africa Microfinance through training and exposure to best practices. States/UNDP Schools Financing Facility To strengthen the environment in which private schools Core Funds PEP-Africa operate. Subcontracting and To promote sourcing and exchange of contracts for FMO/UNDP PEP-Africa Partnership Exchange goods and services, as well as transfer best practices. 67 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Guinea Bissau FDI Solutions To help the Government of Guinea Bissau develop an Core Funds FIAS action plan for Tax/Incentive Reform. Kenya Administrative Barrier Solutions To assist the Kenyan Government in implementing a Core Funds FIAS radical licensing system reform aimed at substantially reducing the sector/activity license requirements and improving the quality of the remaining requirements. Aureos Safepak To study the technical and economic feasibility Netherlands SFMF of Safepak's proposal to create a plastics recycling facility. Cinearts Afrika To provide grant funding to CineArts Afrika's production IFC TATF of a feature film on gender issues. Coca-Cola SABCO Linkages To assess the distribution system for Coca-Cola products Core Funds PEP-Africa in Nairobi and recommend improvements. FDI Solutions To review the Kenya Investment Promotion Act of Core Funds FIAS 2004. Reform Process Solutions To assist the Kenyan Government in establishing a PSD Core Funds FIAS reform implementation institutional framework and in preparing an action plan. Madagascar Factoring Industry Study To evaluate the environment for the factoring industry Ireland TATF and its feasibility to increase access to finance for MSMEs. Mali Business Development Services To support business development services for smaller IFC CBF enterprises. Trickle Up To strengthen a program using community-based IFC CBF revolving funds and training to help extremely poor SGBI people in northern Mali start and expand microenter- prises. Mauritania Consumer and Small To help Banque pour le Commerce et L'Industrie develop Netherlands TATF Business Banking a viable small business finance operation. Mozambique Mozal Linkages To improve the competitiveness of local SMEs by diver- IFC Linkages sifying markets, increasing opportunities to participate Core Funds PEP-Africa in the smelter's supply chain, improving access to working capital; and to assist the company's community development initiatives. South East Africa Tourism To implement a new policy and strategy for sustainable IFC TATF Investment Program tourism and conservation. Nigeria Cluster Development Program To help clusters of smaller businesses in the garment, UNIDO PEP-Africa leather, and light engineering sectors develop skills and World Bank improve links to larger corporate buyers. MTN Village Phones To help MTN Nigeria develop a sustainable village phone Netherlands Linkages business model. 68 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Small-Scale Power Generation To complete replicable development of two small-scale IFC TATF and Distribution power plants. Rwanda Reform Process Solutions To perform a mini-diagnostic of Rwanda's investment Core Funds FIAS climate. Seychelles Administrative Barrier Solutions To perform an administrative barriers study for the Core Funds FIAS Seychelles. FDI Solutions To create a draft Investment code advisory and organized Core Funds FIAS a workshop for a diagnostics action plan. Sierra Leone Administrative Barrier Solutions To perform a traditional (phase 1) and an institutional Core Funds FIAS analysis on administrative barriers (phase 2). Somalia Private Sector Survey To identify interventions that would assist the growth of Ireland TATF the country's private sector. South Africa Competitive Business Advantage To conduct a Competitive Business Advantage workshop Norway SFMF in Johannesburg. Sustainable Mining for To provide an executive development course on Norway CCF the Extractive Sector Corporate Social Responsibility and competitiveness for Italy extractive sector clients and to support a consortium in developing local tourism. Women Entrepreneurship Program To improve access to finance, business networks, IFC TATF and markets for women-owned small and medium Core Funds PEP-Africa enterprises. Swaziland Gone Rural To help women who manufacture goods from lutindzi IFC SGBI grass in supply chain development, sales, marketing strategy, gender issues, and HIV/AIDS prevention. Tanzania Kilombero Business Linkages To improve the capacity of small-scale sugar cane Core Funds PEP-Africa outgrowers and farmers associations and identify SMEs that could provide goods and services to a sugar mill. Leasing Program To develop leasing as an alternative source of finance Switzerland PEP-Africa to SMEs. Micro, Small, and To evaluate MSMEs'demandforfinanceandthecapacity Netherlands TATF Medium Enterprises Study of financial institutions to meet this demand. Uganda Housing Sector Study To analyze the housing sector, including the rental Luxembourg TATF market, and to collect housing indicators and compare Israel them to international benchmarks. IFC Reform Process Solutions To perform a gender and growth assessment for Core Funds FIAS Uganda. 69 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Zambia Industry Solutions To performed a study of the effective tax burden in the Core Funds FIAS five sectors designated by the recently adopted private sector development plan as the priority areas for growth and to determine whether the current tax/incentive scheme is conducive to growth goals. Konkola Copper Mine SME To help local smaller business build capacity to provide Core Funds PEP-Africa Supplier Development goods and services to the mining sector. Reform Process Solutions To review the legal framework surrounding the invest- Core Funds FIAS ment climate. East Asia and the Pacific Regional Administrative Barrier Solutions To manage the website content development consul- Core Funds FIAS tant contracted by the Commonwealth Secretariat and advise investment promotion agencies (IPAs) on content development issues and provided content development training. Corporate Governance / To strengthen the corporate governance and capacity of IFC FMTAAS Strengthening Financial Institutions financial institutions serving the SME sector. Netherlands TATF Digital Divide Data To provide a patient capital investment to a company IFC SGBI seeking to expand operations and improve its corporate governance in Cambodia and Laos. Enterprise and Investment To help improve private sector legislation in partnership Australia MPDF Legislation with the governments of Cambodia, Lao PDR, and Core Funds Vietnam. Pacific Islands Financial To help Pacific island countries develop a training center Australia TATF Institutions Training for the region's financial institutions. Research Studies ToconductbusinessenvironmentresearchforCambodia, Core Funds MPDF Lao PDR, and Vietnam, and publish summaries of donors' initiatives on MPDF's Web site. Socially Responsible To provide information to the investment community Netherlands SFMF Investment Sector Study about sustainable and responsible investment. Tsunami Matching Grant To provide immediate financial support to corporates that IFC FMTAAS are positioned to respond rapidly to emergencies. Cambodia Canadia Bank Capacity Building To help the bank operate in a market environment Japan TATF through improvements in management, marketing, and delivery of services. Corporate Citizenship Awards To promote good corporate citizenship in collaboration IFC CCF with the country's ministry of commerce, by highlighting TATF good practices and IFC's global leadership role in this area. FDI Solutions To assist the Royal Government of Cambodia in the Core Funds FIAS amendments to the Sub-Decrees on the new Law on Investment with a particular emphasis on establishing a predictable and transparent investment registration process. 70 PROJECT PROJECT DESCRIPTION DONOR PROGRAM FDI Solutions To support the Cambodia Investment Board in the Core Funds FIAS development of their investment promotion strategy including details on the overall direction, budget and implementation plan. Hagar ToprovideHagarDesign,HagarSoya,andHagarCatering IFC SGBI with support to strengthen management capabilities, improve management controls and information systems, and improve product design and marketing. Industry Solutions To assist the Ministry of Commerce and the garment Core Funds FIAS industry to move away from current dependence on a quota-focused market strategy towards a more market-led strategy, with improved corporate social responsibility. WTO Business Guide To provide a resource guide for the country's business Core Funds MPDF owners on issues related to WTO membership. China Administrative Barrier Solutions To conduct a review of the administrative barriers Core Funds FIAS to investment for Liaoning Province, with the aim of identifying problems in the regulatory procedures that deter investment and searching for ways to remove these barriers Administrative Barrier Solutions To provide advice and recommendations for the develop- Core Funds FIAS ment of a modern regime for secured transactions (collateral) that will allow for efficient taking and enforcing security over movable assets. Auchan SME Suppliers To help small business suppliers to the Auchan hyper- Core Funds CPDF market chain improve hygiene and food safety. Business Edge To increase the skills and competitiveness of smaller Core Funds CPDF Management Training enterprises through business management training. Cement Sector Analysis To improve the availability of market data supporting Norway TATF development and modernization of the cement sector. Chengdu City Commercial To build the bank's capacity in asset-liability manage- Norway CPDF Bank Capacity Building ment and conduct a full financial statement audit based Core Funds on international standards. Chengdu Rural Credit To improve the credit analysis skills of the cooperatives' Core Funds CPDF Cooperatives Training staff. Chengdu Small Enterprises To enhance skills of the company's staff and strengthen Switzerland CPDF Credit Guarantee Company the relationship with partner lending institutions. Consulting Development To develop the local consulting industry to accelerate Core Funds CPDF development of the private sector. Corporate Governance To provide corporate governance training and reviews Core Funds CPDF to raise awareness and improve standards; to develop a Canada related toolkit for local business associations, regulators, and consulting firms. Credit Analysis To formalize a workbook for credit analysis on corporate Core Funds CPDF borrowers. Credit Cooperative Unions To undertake a diagnostic review of the Zhejiang and Netherlands TATF Hangzhou Credit Cooperative Unions. 71 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Creditor Rights Protection To raise awareness and recommend reforms related to Core Funds CPDF secured transactions. Environment and Corporate To help China Green, an independent power producer, Spain TATF Governance Support improve management and corporate governance and strengthen systems for the environmental, social, and employee safety aspects of its business. FDI Solutions To diagnose the policy, legal, & institutional frameworks Core Funds FIAS needed to attract more FDI to China's Liaoning prov- ince. FDI Solutions To perform a joint FIAS-MIGA review of the draft national Core Funds FIAS investment promotion policy prepared by the Ministry of Commerce, including discussion in a workshop held in Beijing in July 2004. Fenglin International Limited To help Fenglin develop sustainable business practices Sweden TATF that meet international standards. Information and Communications To develop an assessment of the country's digital divide Spain TATF Technology Analysis and related investment needs. Leasing Law To help the national legislature prepare and pass a Core Funds CPDF leasing law in line with international best practice. Switzerland Leshan City Commercial Bank To help the bank develop staff skills and implement Core Funds CPDF Institutional Strengthening systems for credit management and human resources. Minshan Natural Reserve To help minority communities in natural reserve areas Core Funds CPDF Community Development supply products to a large retailer on a sustainable basis. New Hope Dairy Linkages To help local dairies enhance farm management prac- Core Funds CPDF tices and upgrade the raw milk supply. Netherlands TATF North Andre Supply To develop food traceability for apple growers and IFC Linkages Chain Linkages improve farm management. TATF Plastics Recycling To finance a recycling start-up company in Guang- IFC EOF zhou. Denmark Italy Privatization of State-Owned To publish a study of the country's privatization IFC TATF Enterprises process. Pulp and Paper Industry To prepare a master plan for development of the pulp Finland TATF Development and paper industry, including training on new technolo- gies and management approaches. Secured Transaction Work To help Chinese authorities and market players develop Core Funds CPDF a credit reporting system. Sichuan Environmental To help establish a program of incentives for smaller Sweden/IFC CPDF Compliance Project businesses to implement sustainable environmental practices. Sichuan Hog Sector Study To examine the hog sector and create related assistance Core Funds CPDF for smaller businesses and financial institutions. Sichuan Investment To raise the investment promotion skills of the bureau's Core Funds CPDF Promotion Bureau staff and conduct investment climate benchmarking. MIGA SME Mapping To identify constraints to growth of smaller businesses, Core Funds CPDF particularly in interior provinces. Canada 72 PROJECT PROJECT DESCRIPTION DONOR PROGRAM SME Partnering Project To help local small businesses form trading and invest- Core Funds CPDF ment partnerships with foreign firms. Xi'an City Commercial Bank To help Xi'an City Commercial Bank strengthen its credit Switzerland TATF Credit Risk Management risk management. Yunnan Hydropower To study the market for hydropower in Yunnan province Spain TATF and southern China and to assess hydrology risks related Switzerland to three proposed plants. Fiji FDI Solutions To help implementkeychangestotheinvestmentpromo- Core Funds FIAS tion activities and the foreign investment registration process of the Fiji Trade and Investment Board following amendments to the foreign investment legislation. Fiji Development Bank To help the bank implement changes in management Australia PEDF and reorganize its operations. TATF Nature's Way Cooperative To increase the volume and quality of the country's New Zealand PEDF exports of fresh breadfruit. TATF Tourism Investment Workshop To conduct a workshop for investors, banks, developers, Core Funds PEDF resort managers, international development and govern- ment agencies, and industry specialists seeking to promote investment in the country's tourism industry. Indonesia Administrative Barrier Solutions To prepare and present, in collaboration with the Doing Core Funds FIAS Business team, a paper examining ways of reducing Indonesia's lengthy business start-up procedures. Business Association Development To build capacity for associations serving SMEs in the Core Funds PENSA cocoa and handicraft sectors. Cocoa Industry Investment To help the cocoa sector attract investment from large Core Funds PENSA commercial players and international financial institu- tions and to improve productivity and marketing in the supply chain. Furniture Industry To help producers across the furniture supply chain Core Funds PENSA access finance and improve competitiveness. Handicraft Market Linkages and To help handicraft producers link with foreign markets Core Funds PENSA Capacity Building and trade promotion programs. Health Care Sector Study To provide an overview of the country's private health Israel TATF care sector and identify investment opportunities for IFC. Maize Farming To improve the profitability of maize production by Core Funds PENSA helping farmer groups organize, improve yields, and integrate into the supply chain. Microfinance and To help microfinance institutions improve access to Core Funds PENSA Alternative Channels finance for micro, small, and medium enterprises. Oil, Gas, and Mining Linkages Tolinkoil,gas,andminingcompanieswithlocalsuppliers Core Funds PENSA and Stakeholder Relations and contractors and to provide a clearinghouse for best practices in stakeholder relations. Poultry Industry To encourage investment by large and experienced Core Funds PENSA poultry companies in grain drying, feed milling, poultry production, and processing and to improve the produc- tivity of SME poultry farmers and poultry processing plants. 73 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Provision of Enterprise To enhance business development service providers' Core Funds PENSA Access to Credit capacity, so that they can help SMEs improve access Switzerland to credit. Regional Banks Sector Study To study the country's regional and provincial banks, Netherlands TATF including challenges from sector reorganization and potential to serve SMEs. Seaweed Farmer Cooperation To identify best practices in seaweed farming and Core Funds PENSA promote their use. Seaweed Processing and To increase the value of seaweed sales by bringing Core Funds PENSA Market Access processing closer to farmers and to link farmers and buyers online. SME Business Directory To help SMEs access overseas markets and find less Australia PENSA costly alternatives for promoting products. Astra Foundation SME Credit Line To strengthen banks' capacity to serve the SME market IFC FMTAAS by improving their credit skills and assisting in their institutional development. Subnational Deregulation To help governments streamline business registration. The Asia PENSA Foundation Sustainable Forestry To provide guidelines on improving the enabling environ- Nature PENSA ment to increase the supply of certified and community Conservancy timber. Sustainable Wood To develop a demonstration model of a single trade chain World Wildlife PENSA from source to store that uses sustainable wood. Fund Voices of the Private Sector To provide input to stakeholders on the concerns of IFC PENSA SMEs and large-scale companies. Women Entrepreneurs' Credit Risk To study the creditworthiness of women entrepreneurs Core Funds PENSA as compared to their male counterparts. Lao People's Democratic Republic FDI Solutions To conduct workshop with government officials to Core Funds FIAS discuss and increase awareness of key policy issues to be addressed in the new Foreign Investment Law. Lao Business Forum To initiate a mechanism for ongoing dialogue between Luxembourg TATF government, the private sector, and potential investors. IFC Mongolia Mongolia Meat Quality To train local slaughterhouses in best international Denmark Linkages Assurance Program practices. Mobicom Capacity Building To strengthen Mobicom's capacity in financial manage- Norway TATF ment, marketing, and sales. Palau National Development To help the bank assess the feasibility of establishing a Core Funds PEDF Bank of Palau microfinance unit. Papua New Guinea Bank South Pacific To help implement an efficient credit scoring system to Core Funds PEDF improve the handling of credit applications. CBF 74 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Commercial Orchid Growers' To help members attend a floriculture train-the-trainer Core Funds PEDF Association course in Fiji. Lihona Butterfly Farm To examine the commercial viability of reopening a Core Funds PEDF butterfly farm for the benefit of surrounding villages. National Fisheries College To join the college in conducting training for women in New Zealand PEDF skills necessary to turn subsistence fishing activities into CCF viable commercial enterprises. PNG Divers Association (PNGDA) To assess the association's potential for generating Core Funds PEDF income through e-commerce. Porgera Joint Venture To advise local authorities on the commercial viability Core Funds PEDF Linkages Partnership and operation of a small hydroelectric scheme that would replace supplies from a mining project. Microfinance Institution Building To conduct a diagnostic study and develop a business Netherlands TATF plan for a new microfinance institution. Philippines Banco de Oro Capacity Building To strengthen the bank's corporate governance and Japan TATF institutional capacity. Boracay Island Private To assess tourism infrastructure and other private sector Bavaria TATF Sector Investment investment opportunities on the island of Boracay. IFC Health Care Industry To study the country's private health care industry and Sweden TATF Assessment identify investment opportunities for IFC. Industry Solutions To examine linkages between multinational and domestic Core Funds FIAS firms in the electronics, agri-business and IT-enabled services sectors and assessed the subsequent flow-on impacts, as well as policy constraints, to such link- ages. New Port City Sustainability To assess sustainability issues related to Megaworld Spain TATF Assessment Corporation's New Port City development. Water Sector and Private Sector To advise on ways to attract private sector interest in the France TATF Participation country's water sector. IFC Samoa National Bank of Samoa To help implement training to update the bank's credit New Zealand PEDF procedures and policies. TATF Samoa Hotel Association To help implement an e-booking system by training Core Funds PEDF personnel, installing hardware and software, and devel- oping Web content. Samoa Venture Capital Fund To establish a venture capital investment vehicle for local Core Funds PEDF businesses that cannot access financing from existing financial institutions. Solomon Islands Central Bank of Solomon Islands To analyze credit unions, savings clubs, and the Solomon Australia PEDF Islands Credit Union League and recommend changes Core Funds TATF to ensure sustainability of the sector. FDI Solutions To advise on and prepared drafting guidelines for the Core Funds FIAS new Foreign Investment Bill. Also helped prepare a new investment policy statement and facilitated public consultation on the proposed policy and legislative changes. 75 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Thailand Bond Market Development To organize the marketplace for trading bonds, improving IFC TATF price transparency and market surveillance. Timor-Leste Private Sector Investment To identify private sector investment opportunities in agri- Norway TATF business, fisheries, forestry, oil and gas, infrastructure, tourism, and the financial sector. Vanuatu FDI Solutions To assist Vanuatu Investment Promotion Authority in Core Funds FIAS developing a national investment policy statement, which clarified government policy regarding investment as well as its intended policy changes on investment. FDI Solutions To developed a capacity building workshop to help Core Funds FIAS Vanuatu's six provincial authorities comply with the new national investment policy statement (NIPS) and guide them in their preparation of good practice provincial investment policies. Melanesian Cooperative To help the institution develop a strategic business plan Australia PEDF Savings and Loan Society while maintaining its emphasis on indigenous access TATF to finance. Vietnam Administrative Barrier Solutions To develop a methodology to undertake a comprehensive Core Funds FIAS study of the impact of the Land Law 2003 on private sector development in response to a request from the Ministry of Natural Resources and Environment. Asia Commerical Bank To strengthen the bank's retail, SME finance operations, IFC TATF Management Information System corporate governance, and institutional capacity through Japan an upgrade of its management information system. BTC Vietnam To improve the level of environmental and social Luxembourg SFMF commitment through capacity building for financial institutions. FDI Solutions To provide policy advice to the government on moving Core Funds FIAS to a transparent, predictable and simplified system of performance-based corporate income tax and import duty incentives. Sacombank To strengthen the corporate governance and institutional Japan TATF capacity of Sacombank. Thanh Hoa Bamboo To increase the income of farmers in Thanh Hoa province Luxembourg CCF Growers Support through bamboo cultivation and improvement in the Netherlands supply chain. South Asia Regional Administrative Barrier Solutions To host a high level roundtable to discuss how interna- Core Funds FIAS tional best practice in regulatory reform can be most appropriately tailored to local conditions, needs and priorities in countries of the South Asia Region. Banker Training To train bankers in Bhutan and northeast India; topics Core Funds SEDF include introducing new financial products and tools and techniques for human resources. 76 PROJECT PROJECT DESCRIPTION DONOR PROGRAM FDI Roundtable on To examine how regulatory reform can improve the Core Funds SEDF Regulatory Reform environment for foreign direct investment. Gender Entrepreneurship To develop a program based on a diagnostic study of Core Funds SEDF Markets women in SMEs and a regional forum. Knowledge Centers and To localize the SME Toolkit and work with chambers Core Funds SEDF SME Toolkit of commerce in Dhaka, Chittagong, and Bhutan to disseminate business information and provide training. Promoting Trade between To promote advocacy, dialogue, and research to remove Core Funds SEDF Bangladesh and Northeast India nontariff barriersand promote trade betweenBangladesh and northeast India. SME Bank Diagnostic Tool To develop a diagnostic tool for evaluating SEDF's partner IFC CBF banks. SEDF Solar Lighting To develop low-cost solar lamps to market to poor people Netherlands EOF in rural areas. Tsunami Matching Grant To provide immediate financial support to corporations IFC FMTAAS that are positioned to respond rapidly to emergency needs. Bangladesh Administrative Barriers Review To review administrative barriers to inform design of a Core Funds SEDF multidonor private sector development project. FIAS Bangladesh Women Chamber of To develop the capacity and improve the financial Core Funds SEDF Commerce and Industry sustainability of the Bangladesh Women Chamber of Commerce and Industry. Bank Competency Group Training To train inspectors in auditing risk-based systems in Core Funds SEDF various areas of banking. Bank Corporate Governance and To train the central bank and commercial bankers on Core Funds SEDF Credit Risk Management corporate governance and on credit risk management related to SME finance. CBA Dhaka To provide training on environmental management for Netherlands SFMF financial intermediaries and SMEs. Chittagong Woman Enterpreneurs To develop the capacity and improve the financial Core Funds SEDF sustainability of the Chittagong Woman Entrepreneurs, a business association. Credit Scoring Modules To develop training modules on credit scoring. Core Funds SEDF Dhaka Chamber of Commerce and To conduct an in-depth diagnostic review of DCCI and Core Funds SEDF Industries Diagnostic Review develop a strategic framework for the organization. FDI Solutions To provide advice regarding the context of investment Core Funds FIAS strategy and assessing effective tax rates at the request of the BOI Executive Chairman. Global Bank Diagnostic Instrument To prepare a global diagnostic instrument that verifies IFC/Core CBF readiness of a financial institution to serve SMEs, in Funds SEDF collaboration with several other IFC regional facilities. Improving Registration Procedures To disseminate information on business registration Core Funds SEDF procedures. Institutionalizing Reforms for To build capacity of the civil service and strengthen the Core Funds SEDF Private Sector Development government's ability to support private sector growth. 77 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Investment Incentive Review To review existing fiscal measures for investment in Core Funds SEDF Bangladesh and develop appropriate recommenda- tions. Knitwear Sector To improve the competitiveness of the knitwear sector Core Funds SEDF though export promotion and clustering. Reform Process Solutions To create roundtables on Free Zones and Regulatory Core Funds FIAS Reform in Bangladesh in order to assess key special economic zones and regulatory reform needs in Bangla- desh. Registrar of Businesses To automate the functions of the Registrar of Joint Core Funds SEDF Stock Companies and Firms to improve the country's Australia environment for business entry registration. Roundtable on Free Zones for To disseminate principles, international best practices, Core Funds SEDF Investment Promotion and Export and experiences in improving the business environment Competitiveness to key stakeholders. SME Market Financial Survey To conduct a survey of the SME market from a banker's Core Funds SEDF perspective. SME Panel Survey and Report To track performance of SMEs through a series of panel Core Funds SEDF surveys and identify key constraints. SME Units at Banks To help set up separate units within banks to focus on Core Funds SEDF serving SMEs. Trade Policy and Apparel Exports To examine the potential economic impact of SAARC Core Funds SEDF Cumulation and General System of Preferences on the country's apparel export sectors. Bhutan FDI Solutions To amend the FDI Rules and Regulations of Bhutan. Core Funds FIAS Information Technology Park To study the feasibility of establishing a combined infor- Core Funds SEDF Feasibility Study mation technology park and distance learning center. Women's Entrepreneurship and To improve entrepreneurial capacity of rural women in Core Funds SEDF Poverty Alleviation producing and marketing medicinal herb products. India Bharatiya Yuva Shakti Trust To develop an innovative, sustainable financing solution Netherlands TATF Developing Young Enterpreneurs for local entrepreneurs to fill a gap in the Indian financial IFC market. BILT Farm Forestry Program To support an outreach program that helps poor farmers IFC Linkages in tribal villages grow trees on marginal lands for pulp CBF and paper production. Cairn Community and To help an IFC oil and gas client establish a community IFC Linkages Economic Development development program in remote rural areas of Rajastan Netherlands CCF and support development of local supply-chain and income-generating activities for communities nearby. Cogeneration Turbine To introduce cogeneration to local industries by beta- Netherlands EOF Manufacturing testing gas turbines and producing steam turbines. Electric Car Manufacturing To support the country's first electric car manufacturer. IFC EOF Netherlands Environmental and Social Issues To work with a potential IFC investee and its outgrowers Italy CCF in Sugar Supply Chains to address environmental, social, and labor issues in production practices. 78 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Food Safety Management System To help an IFC client manage food production safety and Sweden TATF quality and become eligible for HACCP certification. HIV/AIDS Capacity Building To build the capacity of corporations to address HIV/AIDS Netherlands CCF for IFC Clients in the workplace, in-house clinics, and surrounding communities. Information Technology To provide rural farming communities in Tamil Nadu with IFC CCF for Rural Farmers access to IT services through communications kiosks. Lead Battery Certification To develop a certification program for lead battery Netherlands CCF manufacturing. Northeast India Brand Summit To promote the area's industrial products and build Core Funds SEDF brands for better market access. Powerlinks Occupational Health To increase awareness among contractors and Netherlands CCF and Safety Training employees of workplace health and safety issues and good practice. Private Health Care To help expand the health care sector in northeast Core Funds SEDF Sector Development India. Self-Employed Women's Association To administer existing portfolio projects: SEWA Trade Japan SGBI Facilitation Centre and SEWA Barefoot Managers' Netherlands School. IFC SME Training: Applying Global Best To develop best practice SME training methods appro- Netherland TATF Practice priate to meet the country's needs. IFC Maldives Coral Reef Rehabilitation and To work with resort hotels that are IFC clients and Netherlands CCF Protection with local NGOs and tour operators to test methods of rehabilitating coral reefs affected by human activity. Nepal SME Toolkit Bizmantra To localize the SME Toolkit and increase access to Core Funds SEDF business information and management training. Sri Lanka Road Safety Training Institute To determine the viability of establishing a road safety Sweden TATF Feasibility Study training institute. Water Disinfection and Purification To build a permanent water purification and disinfection United States TATF system as part of the post-tsunami reconstruction. Europe and Central Asia Regional ACG/BTC Pipeline To increase opportunities for local SMEs to become part IFC Linkages of the supply chain for the ACG/BTC Pipeline. CBF Alternative Dispute Resolution To help introduce mediation into the formal court system Core Funds PEP-SE and increase awareness of its potential. Balkans Infrastructure To help the public sector in Southeast Europe increase Netherlands TATF Development private participation and investment in infrastructure, especially the energy, transport, and water and sanitation sectors. 79 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Central Asia Housing Finance To identify the legal and regulatory gaps in the housing Switzerland PEP Gaps Analysis finance systems in Azerbaijan, Kazakhstan, the Kyrgyz TATF Republic, Tajikistan, and Uzbekistan. Competitive Business Advantage To hold Competitive Business Advantage workshops in Netherlands SFMF Sarajevo, Belgrade, Skopje, and Tirana. IFC PEP-SE Herbal Development Initiative To strengthen private development of the herbal sector by Core Funds PEP-SE building the capacity of business associations in Bosnia and Herzegovina and in Serbia and Montenegro. Leasing To build localcapacityandknowledgethroughtrainingon Core Funds PEP leasing legislation and conduct an awareness campaign to highlight financial benefits of leasing. Albania Administrative Barrier Solutions To assist the government in updating the 1999 Admin Core Funds FIAS Barriers Study based on the self-assessment method, includingaregulationsandadministrativebarrierssurvey, and help develop an action plan for implementation. Albania National Commercial Bank To train bank staff, conduct sector studies, and offer Core Funds PEP-SE consulting services to individual companies to help them access finance. Albanian Construction Association To strengthen the construction association's sustainability Core Funds PEP-SE and capacity to serve its members. Export Promotion Agency To help the agency with critical organizational and Core Funds PEP-SE technical issues to improve its services to exporters and Albania's competitiveness in regional and EU markets. Telecommunication Regulatory To prepare a capacity building program for the authority's Spain TATF Authority HR Needs Assessment management and staff. Azerbaijan FDI Solutions To help, jointly with MIGA/IMS, develop the strategy and Core Funds FIAS structure of the IPA and translate the recommendations included in the diagnostic study into action with the best institutional framework strategy to carry them. FDI Solutions To provide technical assistance to government officials Core Funds FIAS and Parliament on the development of the Draft Invest- ment Law in line with the best practices in FDI laws, clarified the commentary and guidelines. Belarus Business Enabling Environment To reduce the regulatory burden on SMEs by conducting Sweden PEP surveys, identifying barriers to growth, discussing prob- lems with decision-makers and the business community, and providing the government with policy advice. Strengthening Belgazprombank's To help the bank develop a viable consumer and small Sweden TATF Capacity business finance operation. Bosnia and Herzegovina Administrative Barrier Solutions To provide assistance in the design and implementation Core Funds FIAS of local review of the administrative processes that affect the operation of companies for the Municipality of Gradiska in Bosnia & Herzegovina. 80 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Auto Cluster To align the performance of car parts suppliers with Core Funds PEP-SE international manufacturing standards, raising their attractiveness to foreign investors. Construction Sector Development To increase competitiveness and readiness of local Core Funds PEP-SE companies for large infrastructure projects through training and links to sources of financing. Corporate Governance To improve corporate governance and operational perfor- Core Funds PEP-SE mance of newly privatized SMEs through consulting to firms and training of managers and board members. KLAS Company To develop a business model for the company's retail Core Funds PEP-SE division and support involvement of SMEs as suppliers in the company's value chain. Wood Sector Development To assist SME development in the wood sector through Core Funds PEP-SE consulting and training to enhance competitiveness. Bulgaria Bulgarian Electricity To design a transparent and competitive wholesale IFC TATF Generation Advisory market that encourages participation of private investors in the country's power sector. FYR Macedonia Financial Institutions To build capacity of financial institutions and regulatory Core Funds PEP-SE Capacity Building bodies and increase access to capital for SMEs. Makstil Company To improve the competitiveness and profitability of the Core Funds PEP-SE company's supply chain, including scrap metal operators and collectors, and support development of the recycling industry. SME Agency Strengthening To increase the capacity of the agency and local business Core Funds PEP-SE service providers to address EU accession issues and introduce HACCP in the country's food companies. Union of Chambers of Commerce To strengthen the management capacity of the business Core Funds PEP-SE association and expand its members' access to products and services. Kazakhstan Corporate Governance To increase knowledge of good corporate governance IFC PEP practices at local companies and banks. FMTAAS Ispat Karmet To help smaller businesses maintain links with Ispat IFC Linkages Karmet and aid them in expanding and modernizing CBF their businesses through the SME Resource, a special purpose funding vehicle. SME Supplier Development To support the development of SME suppliers to inter- Japan TATF in Oil and Gas Projects national oil and gas projects. Kyrgyz Republic Kumtor Snow Leopard Conservation To preserve the area's biodiversity, including endangered Italy CCF and Biodiversity snow leopards. Poland Administrative Barrier Solutions To assist the Government of Poland in carrying out a self- Core Funds FIAS assessment of administrative barriers to investment. 81 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Romania Administrative Barrier Solutions To assist the Government of Romania in conducting a Core Funds FIAS monitoring & evaluation project to strengthen implemen- tation and impact of reforms. Banca Comerciala Romana To help the bank strengthen its corporate governance, IFC FMTAAS internal auditing, and environmental policy and manage- Italy SFMF ment systems. Industrial Competitiveness To help fund a study of the country's competitiveness. IFC FMTAAS Russian Federation A Chance To Work To provide disadvantaged youth with an opportunity IFC TATF to improve their lives and to promote corporate social responsibility, by providing orphans with training and internship opportunities at major Moscow-based companies. Administrative Barrier Solutions To assess removal of administrative barriers, including Core Funds FIAS business survey, baseline for monitoring, facilitation of dialog between public and private sectors, and special- ized expertise. Commercial Energy To support the Commercializing Energy Efficiency Switzerland SFMF Efficiency Finance Finance program in Russia. Competitive Business Advantage To train financial institutions on how to manage environ- Switzerland SFMF mental and social issues associated with their lending and investment operations. Fishing Industry Survey To identify key issues and constraints of the country's Iceland PEP fishing industry. Komi Republic SME Development To help the SUAL Group maximize local sourcing oppor- IFC PEP tunities from the Russian Federation's Komi Republic. CBF Northwest Russia Forest Investment To improve the investment environment in northwest Finland PEP Russia's forest industry and encourage the use of Private donors sustainable forestry practices. Primary Mortgage Market To spur the development of the primary and residential Canada PEP Development mortgage market, particularly among local banks in Netherlands regions beyond Moscow. Switzerland IFC Reform Process Solutions To provide an analysis and recommendations on the Core Funds FIAS draft law, with a view to improve the framework for SEZ development that both converges toward international best practices in free zone policies and operations and, at the same time, ensures sufficient regulation by the Government. Securitization To advise government entities on new regulations to Austria TATF create an environment for securitization and provide education to regulators and market players on the benefits and mechanics of securitization. Steel Sector Assessment To analyze the demand characteristics for various steel United TATF products, review the main players in the industry, and Kingdom identify efficient producers who are suitable for modern- ization of their facilities. 82 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Sustainable Energy Finance To promote investments in energy efficient technolo- Denmark PEP gies. Finland IFC The World Bank Volga Automotive To improve quality and production efficiency at a large Austria PEP automobile factory. Serbia and Montenegro Belgrade Municipal Solid Waste To improve efficiency and management in Belgrade's Denmark TATF municipal solid waste operations in preparation for IFC private sector participation. Business Associations Capacity To enhance private sector development in the munici- Core Funds PEP-SE Building pality of Vrsac through assistance to the Association of Small and Medium Enterprises and Entrepreneurship. CPOT Pipeline Strategy To prepare for development of the Constanza-Pancevo- Austria TATF Omisalj-Trieste oil pipeline. MAXI Company To enhance MAXI's value chain by helping it adopt best Core Funds PEP-SE practices and improve customer service and quality of products. Podgoricka Banka Restructuring To support the bank's restructuring and upgrading by Austria TATF and Privatization providing financial advisory services. Greece IFC Privatization Agency of Serbia To assist the agency's Capital Market Center and assess Italy TATF the portfolio of companies held by the State Share Fund of Serbia. Tigar Finance and Accounting To help Tigar AD establish an effective treasury, finance, Italy TATF Departments and control department and train staff, including its chief financial officer. Tajikistan PamirEnergy Tariffs To help PamirEnergy develop a revised tariff collection Switzerland TATF strategy and demand side management program to reduce consumers' energy consumption and make energy bills more affordable. Rural Finance Replication To establish a private company owned by farmers and Canada PEP to finance inputs, arrange for processing, and provide marketing services. Turkey Assessment of waste recycling To assess business opportunities for recycling. IFC EOF sector Cultural and Historic Tourism To examine tourism possibilities for the port of Kushadesi Norway CCF based on its cultural heritage. Industry Solutions To assist the Government of Turkey in conducting a Core Funds FIAS competition policy study on how to attract FDI and strengthen the competitiveness of private sector as the primary engine for sustainable private sector led economic growth. Reform Process Solutions To provide follow-up assistance to the Government Core Funds FIAS of Turkey for the second meeting of the Investment Advisory Council to help strengthen the Government's ongoing investment climate reforms more effectively. 83 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Ukraine Commerical Mediation and Dispute To investigate commercial mediation and alternative Sweden PEP Resolution dispute resolution in Ukraine. TATF HACCP Food Safety To expedite Sandora's efforts to fully implement a Hazard Germany TATF Analysis and Critical Control Point food safety program. Pulp and Paper Industry To identify key issues and constraints of the country's Finland PEP pulp and paper industry. UKRPAPIR TATF IFC SME Policy To help improve the legal framework for business permits European PEP and to assist permit agencies in simplifying their issu- Commission ance procedures. Southern Ukraine To develop agribusiness skills to improve access to Sweden PEP Vegetable Supply Chain finance and markets, improve farm productivity by introducing husbandry, and demonstrate a more produc- tive use of assets. Vinnitsa Dairy Supply Chain To develop business skills among dairy farmers, promote Sweden PEP milk safety awareness, and improve farm productivity and milk quality. Vinnitsa Fruit Supply Chain To develop agribusiness management skills among Austria PEP fruit farmers, improve sustainability by demonstrating a more productive use of assets, and introduce modern techniques and technologies. Latin America and the Caribbean Regional Competitive Business Advantage To help financial institutions understand how to manage Switzerland SFMF environmental and social issues associated with their lending and investment operations. Credit Bureau Program To foster the development of private credit bureaus, IFC TATF facilitating the extension of credit to underserved segments of the population. Indigenous Peoples and Impact To assemble indigenous perspectives on a range of IFC CCF Assessment topics related to the work of the Organization of American States and to the themes of an OAS summit. Leasing Maps To assess the national regulatory and legal framework for Canada LACP the leasing industry in Honduras and Nicaragua. Switzerland Municipal Scorecard To establish a benchmarking tool for municipalities' Switzerland LACP regulation of the private sector. Simplification of Business Regula- To provide a toolkit for reforms that simplify business Norway LACP tions at the Subnational Level: regulations at the municipal level. Toolkit for Reform Implementation SME Toolkit To modify IFC's SME Toolkit to meet specific needs of Switzerland TATF smaller enterprises in Bolivia and Peru. Southern Cone Development To help strengthen civic values among poor and vulner- IFC TATF Marketplace able youth in Argentina, Chile, Paraguay, and Uruguay. 84 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Antigua & Barbuda FDI Solutions To help the Government of Antigua & Barbuda establish Core Funds FIAS an Investment Promotion Agency and diagnose the investment environment. Argentina Banco Hipotecario Argentina To create a strategy for fully privatizing Banco Hipotecario Spain TATF Argentina. Bolivia AXS Bolivia To develop an Internet cafe franchise. IFC Linkages LACP Community Development To develop pilots to deliver rural electrification to isolated Bavaria TATF and Rural Electrification communities using renewable energy, including wind, biomass, solar photovoltaics, and micro-hydropower. Indigenous Enterprise To study the opportunities for indigenous people in Netherlands LACP Development business and help indigenous artisan groups gain market TATF access for their products. Irupana To provide Irupana with a patient capital loan to optimize IFC SGBI its production capacity and packing facilities, helping it increase exports and implement a management informa- tion and monitoring system. Leasing Development To expand leasing operations and draft new laws. Switzerland LACP National Guide of To set up a Web portal to host a national online guide to Netherlands LACP Business Procedures procedures of the Central Public Administration, as part of a larger effort to simplify administrative procedures and increase transparency. Simplifying Procedures To simplify business procedures in the municipalities of Norway LACP at the Municipal Level Montero, Tarija, and Trinidad. Wood Sector Supply Chain To strengthen the supply chain for wood products by IFC LACP promoting access to finance and improving the avail- CBF ability of certified wood. Brazil Competitive Business Advantage To conduct a Competitiveness Business Advantage IFC SFMF course. Forestry Certification To strengthen the country's forest certification program Italy CCF and align it with international standards. Odebrecht Supplier Finance To provide training for supplier and subcontractor IFC Linkages development, supporting IFC's loan to the company for CBF financing of SME suppliers. Soy Stakeholder Dialogue IFC CCF To support consultation between an IFC client and NGOs on soy production in the Cerrado. Wind Power Viability Assessment To review the feasibility of IFC engagement with privately IFC TATF held wind power projects that are in development under a Brazilian government program. Colombia Supply-chain Best Practice To map local initiatives of large companies that work with Canada LACP SMEs as suppliers and distributors. Wastewater Systems for Sugar Mills To review the wastewater system and identify cost-effec- Norway EOF tive design improvements for two sugar mills. 85 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Dominican Republic Wind Power Feasibility Study To review wind data, technical bids, and selection of Sweden TATF turbines and to estimate the amount of electricity to be generated. Ecuador Labor Relations To facilitate discussions between a trade union and IFC CCF management on the possibility of establishing unions on plantations. Organic Waste Fermentation To define the most beneficial and cost-effective method- Bavaria TATF and Biogas ology for converting organic solid wastes from livestock rearing, animal and food processing, and wastewater management into biogas and marketable fertilizer-like solids. El Salvador Global Home Township To analyze the potential for the GlobalHome Township IFC TATF Feasibility Study program in El Salvador. Metrocentro To provide local SME retailers with tailored training and Italy Linkages consulting. CCF Guatemala Gold Mining and Community To work with the company's foundation to establish Norway CCF Development community-run tree nurseries for mine reforestation. Haiti Grupo M Mediation To initiate negotiations between management and IFC TATF workers at an apparel manufacturing plant, helping resolve a labor dispute. Honduras Industry Solutions To help implement skills reforms to strengthen the Core Funds FIAS competitiveness of the Honduran private sector. Nicaragua Administrative Barrier Solutions To assist the Government of Nicaragua in setting up Core Funds FIAS and supervise the implementation of a comprehensive administrative reform program. Industry Solutions To reform labor skills training to strengthen the competi- Core Funds FIAS tiveness of the private sector in Nicaragua. Industry Solutions To review of the draft law and implementing regulations Core Funds FIAS for competition policy. Simplification of Business To help the municipalities of Granada, Leon, and Masaya Switzerland LACP Procedures reduce administrative barriers in the business environ- ment. Wood Sector: Export To strengthen smaller businesses' access to competitive Netherlands LACP Promotion for SMEs markets using environmental management certification as a marketing tool. Peru Corporate Social Responsibility To identify interactions between large and small enter- Canada LACP prises and analyze practices that contribute to the sustainability of their businesses. Edyficar To help a microfinance institution improve its effi- IFC Linkages ciency. CBF 86 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Minera Yanacocha To improve the competitiveness of local SMEs by IFC Linkages diversifying their markets and participating in a mine's Netherlands CBF supply chain. Institutional Capacity Building To help local governments in Cajamarca contribute IFC LACP and Transparency to more equal distribution of benefits generated by a mining project. Municipal Business To map current practice and design a national plan to Canada LACP Procedures Map simplify municipal procedures. Orient Express Linkages To help link small-scale producers and service providers IFC LACP in the Cuzco region to contracting opportunities with CBF Orient Express Hotels and rail operations in the region. Linkages Simplification of Business To simplify procedures for obtaining operating and Switzerland LACP Regulations construction licenses in metropolitan Lima. SME Toolkit Adaptation To provide a management tool to help lenders improve Switzerland LACP their performance when advising small and medium enterprises. Textile Sector To strengthen the textile sector in Arequipa. Netherlands LACP Venezuela Vinncler Oil and Gas To develop an environmental and social management Spain TATF framework, helping support the company's expansion. Middle East and North Africa Regional Bank Training of Trainers To introduce specific training modules to the MENA Core Funds FIAS region SME banking sector to train the regional trainers to ensure a sustainable offer in the market. Afghanistan Afghanistan Finance Company To help a new private sector leasing company set up Core Funds PEP-MENA best practice credit analysis, marketing, and equipment leasing functions. Agribusiness Sector To assist processing operations for dried fruit and nuts, Core Funds FIAS a key sector for the country. Insurance To contribute to the development of the insurance sector, Core Funds FIAS by assessing the insurance market and identifying steps required to stimulate the industry. Algeria Arab Leasing Corporation To improve the company's operating processes and Core Funds PEP-MENA guidelines, train staff in credit analysis and marketing, and provide coaching to management. CARE To develop CARE's capacity to organize advocacy events, Core Funds PEP-MENA including national debates and a conference on family businesses. Conseil National Consultatif To build the capacity of the national council of busi- Core Funds PEP-MENA ness associations, including by establishing a unit to coordinate donor-funded programs. 87 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Crédit Populaire d'Algérie To help the bank establish best practice risk manage- Core Funds PEP-MENA ment procedures and systems. Egypt Administrative Barrier Solutions To assist the Government of Egypt in its effort to facilitate Core Funds FIAS private investment in the country and to improve trans- parency and effectiveness of Government operations. Alexandria Business Association To review the association's risk management processes Core Funds PEP-MENA Credit Scoring and procedures and develop a credit-scoring model. Banque Misr To help the bank assess the microfinance performance Core Funds PEP-MENA of its branches, develop a business plan, install an IT system, and review procedures, systems, and training. Business Edge To support local organizations that provide management Core Funds PEP-MENA training to SMEs by providing them with IFC's Business Edge products and tools. Export Development Bank of Egypt To analyze the bank's profitability and customer segmen- Core Funds PEP-MENA tation and help it establish an SME operation. Islamic Republic of Iran Saman Bank and Karafarin Bank To support two new private sector commercial banks by Spain TATF strengthening their organization, operational procedures, credit analyses, and risk management functions. Iraq Iraqi Bank Training To train Iraqi bank managers on modern banking prac- Core Funds FIAS tices, including credit risk management, asset/liability management, strategic business planning, foreign currency risk and bank marketing. Jordan Arab Bank Academy for Banking To help develop training modules to serve the needs of Core Funds PEP-MENA and Financial Services banks targeting the region's SMEs. Lebanon Banking Sector Corporate To survey corporate governance in the country's banking Core Funds PEP-MENA Governance sector generally and assess the corporate governance of a leading local commercial bank. Morocco AZIT Business Organization To build the capacity of AZIT, a business member IFC PEP-MENA organization in the industrial zone of Tangiers. Banque Centrale Populaire To promote the bank's services to SME clients and Core Funds PEP-MENA conduct a benchmarking study of its risk management function. Business Associations Training To facilitate business associations' access to training IFC PEP-MENA by a local service provider, Confédération Générale des Enterprises du Maroc. IZDIHAR Business Association To help a business association design and implement a IFC PEP-MENA marketing plan for new and existing services. Regional Investment To establish an investment promotion agency aiming Core Funds PEP-MENA Promotion Agency at increasing FDI inflows to the country's northern regions. Pakistan Administrative Barrier Solutions To identify key issues constraining the growth of the Core Funds FIAS housing, construction, retail, and tourism industries and develop blueprint for land market reform. 88 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Reform Process Solutions To provide the Government of Pakistan with a registration Core Funds FIAS and licensing regime in light of the costs it imposes on potential investors. Tunisia Banker Sustainability Training To collaborate with the World Bank Mediterranean Netherlands SFMF Environmental Technical Assistance Program in training bankers on topics related to sustainability. BIAT Banking Operations To develop and promote Banque Internationale Arabe Core Funds PEP-MENA de Tunisie's SME banking operations. Global ACCION Microfinance Facility To use ACCION International's expertise to help banks IFC FMTAAS set up new microfinance business units. Animal Welfare Good Practice Note To provide guidance on animal welfare for IFC livestock Netherlands CCF clients and other agribusiness companies. Norway IFC Corporate Social Responsibility and To develop a national competitiveness strategy that will Sweden TATF National Competitiveness promote corporate social responsibility and a encourage FIAS sustainable private sector in FIAS client countries. Gender Enterpreneurship Markets To incorporate gender issues into IFC's work, assist IFC FMTAAS women entrepreneurs, and advise financial institutions on financial services and business support to women. Global Business School Network To enhance the institutional capacity of business schools IFC FMTAAS in developing countries so they can provide a stronger pool of management talent to local, regional, and multi- national firms and organizations. Grassroots Business Organizations To help grassroots business organizations improve their Switzerland TATF operations, develop better systems, and establish access to markets and financing. Human Rights Impact Assessment To develop a guide to human rights impact assessment IFC CCF for use across sectors by companies in the field. IFC Against AIDS To develop tailored tools and advice to address work- IFC FMTAAS force and community-related concerns stemming from HIV/AIDS. Indigenous Business Summit To provide a technical forum on indigenous business IFC CCF for leaders of indigenous peoples, practitioners of impact assessment, private companies, and other stakeholders. Sustainable Investment To stimulate more sustainable investment in emerging Netherlands SFMF in Emerging Markets market listed equities by addressing gaps in local research infrastructure. Sustainability Regional To develop a network of regional service providers to Netherlands SFMF Service Providers deliver sustainability-related products and services. Linkage Toolkit To train staff and develop sector-specific networks for IFC CBF coordinating linkage activities. Linkages Monitoring and Evaluation To devise a standard and shared approach to meth- IFC CBF of IFC's Technical Assistance odology employed in monitoring and evaluating the impact of technical assistance on projects in the various donor-funded facilities managed by IFC. 89 PROJECT PROJECT DESCRIPTION DONOR PROGRAM Olam Sustainable Forestry To help Olam address sustainability and fair trade Netherlands CCF Management opportunities. Norway IFC Tourism Workbook To develop a handbook for practitioners on managing Netherlands CCF the socioeconomic impact of hotel and tourism develop- Norway ment. IFC Traditional Medicine Market Study To conduct a survey of the traditional medicine market Switzerland TATF in China and India. Youth Entrepreneurship To enhance existing youth enterprise development initia- IFC CBF tives in Kenya and India and appraise their potential for replication. 90 IFC Donor-Supported Technical Assistance Programs: Locations GLOBAL AND REGIONAL DONOR FUNDED OPERATIONS GLOBAL EUROPE & CENTRAL ASIA CBF BIDF ASIA & THE PACIFIC DevCo PEP FIAS MPDF SBAP MIDDLE EAST & (includes NORTH AFRICA CCF, EOF, PEP-SE PEDF and SFMF) ISBFF (planned) SGBI PENSA PEP- MENA SME Initiatives TATF IFC-PACE (planned) GCGF LACP (planned) LATIN AMERICA & THE CARIBBEAN PEP- Africa (successor to APDF) SUB-SAHARAN MSI AFRICA 91 IFC Donor-Supported Technical Assistance Programs: Purpose/Strategy ACTIVITY PURPOSE INCEPTION DFO STRATEGY DATE FY FIAS To provide advisory services on improving the FDI environment in emerging markets. 1985 APDF To respond to the need for project preparation and assistance for African entrepreneurs. 1986 (succeeded by PEP-Africa, in FY05) TATF To develop TA projects to help strengthen the business environment in all IFC client countries, 1988 focusing on TAs to promote private sector growth. AMSCO To assist those SMEs that have substantial African ownership to become more sustainable 1989 and competitive in national and international markets. PEDF To assist in and accelerate the development of productive, self-sustaining SMEs in Pacific 1990 Island countries. MPDF To foster growth in the number and size of domestic private firms in the Mekong region. 1996 PEP To provide focused TA, with the goal of helping build successful private businesses in the In operation former Soviet Union region. since 1997. The Partnership was formally created in May 2000. CPDF To support the development of private SMEs in the interior of China, with an initial focus on 2000 Sichuan province. SEED To help support the development of the private sector in Albania, Bosnia, Macedonia, Kosovo, 2000 (to be and the Former Republic of Yugoslavia. succeeded by PEP-SE, in FY06) CCF To demonstrate the business case for progressive approaches to corporate citizenship and 2002 to leverage the potential of IFC investments to act as a catalyst for improved environmental and social performance. EOF To provide catalytic project development funding and flexible investment financing for 2002 innovative projects that primarily address local environmental issues. SEDF To increase the number and growth rates of SMEs in Bangladesh, Bhutan, Nepal, and 2002 northeast India. SFMF To enhance the environmental and social impact of financial intermediaries operating in 2002 developing markets and to have a strategic impact on the sustainability agenda of the broader financial community. CBF To fund partnerships and programs that support the four core pillars of the WBG SME 2002 strategy SME- To support various SME initiatives such as (i) addressing broader SME development issues 2002 Initiatives (access to financing, business enabling environment, local economic development, and capacity building); (ii) funding pilot and partnerships projects; and, (iii) building local capacity for SME lending in target markets. 92 ACTIVITY PURPOSE INCEPTION DFO STRATEGY DATE FY PENSA To support the increased flow of capital to SMEs by strengthening SME banks, creating new 2003 SME financial products, and identifying and preparing projects for follow-on IFC investment; to support linkage programs related to IFC investments and to work with IBRD on improve- ments in the business enabling environment. LACP To promote private sector development through SMEs in selected countries in Latin America 2003 (e.g., target countries of Peru, Bolivia, Honduras, and Nicaragua) with the aim of fostering job creation and reducing poverty in the host countries. DevCo To put in place sustainable contractual agreements in which infrastructure services are 2003 privately provided, with an emphasis on the provision of services to those that currently do not enjoy access ISBFF To support the development of micro and small business in Iraq through financial interme- 2003 diaries PEP-MENA To provide TA to support private sector development in all countries in the MENA region. 2004 (assumed the activities of PEP-ME and NAED facilities) BIDF To assist the public sector in southeast Europe to increase private participation and invest- 2005 (to merge ment in infrastructures that contribute to economic development. with PEP-SE during FY2005) SGBI To strengthen and expand support for Grassroots Business Organizations by the World Bank 2005 Group and others. SLDF To expand SEDF's South Asia SME Development Program from Bangladesh to Sri-Lanka 2005 and Maldives. GCGF To promote global, regional, and local initiatives to improve the institutional framework and 2005 practices of corporate governance in developing countries. MSI To finance SMEs on a commercial basis and provide TA to investee companies and outside 2005 service providers in Mozambique. PEP-Africa To enhance support to SMEs, support IFC direct investment through project development, 2005 (a and engage in improving the investment climate. successor program to APDF) PLANNED IFC-PACE To improve the business environment for SMEs to contribute to a broader-based economic 2006 growth and to sustainable poverty reduction in Philippines. PEP-SE To develop targeted and innovative projects to support private sector development. 2006 (formerly known as SEED) 93 IFC Donor-Supported Technical Assistance Programs: Cumulative Financial Commitments (unaudited) in $ millions equivalent up to June 30, 2005 SME REGIONAL DONOR TATF FIAS SBAP CBF SGBI DevCo TOTAL INITIATIVES2 FACILITIES 3 IFC Donor Community African Development Bank - - - - - - - 12.06 12.06 ADB - - - - - - - 2.50 2.50 EBRD - - - - - - - 1.22 1.22 European Community 3.50 - - - - - - 13.45 16.95 Inter-American Devt Bank - - - - - - 3.40 3.40 UNDP 1.14 8.43 - - - - - 15.69 25.26 Australia 4.74 5.45 - - - - - 13.63 23.82 Austria 1.05 - 1.20 - - - - 4.91 7.16 Belgium 1.20 0.17 - - - - - 3.11 4.48 Canada 9.94 1.65 - - 0.82 - - 45.79 58.20 Denmark 7.02 0.78 - - - - 16.02 23.82 Finland 6.97 0.47 - - - - - 13.44 20.88 France 1.88 0.79 - - - - - 7.16 9.83 Germany 3.62 - - - - - - 7.98 11.60 Greece 1.85 - - - - - - 0.25 2.10 India # - - - - - - - - - Iceland - - - - - - - 0.10 0.10 Ireland 3.00 0.72 - - - - - 1.52 5.24 Israel 0.90 - - - - - - - 0.90 Italy 17.22 0.57 1.50 - - - - 6.04 25.33 Japan 34.63 3.56 - - 1.19 - - 35.42 74.80 Luxembourg 0.62 1.02 0.39 - - - - - 2.03 Mexico - - - - - - - 0.50 0.50 Netherlands 26.22 3.08 8.67 - - 1.27 7.73 49.31 96.28 New Zealand 1.49 1.61 0.20 - - - - 2.57 5.87 Norway 7.92 0.79 1.50 - - - 0.90 24.74 35.85 Poland - - - - - - - 0.50 0.50 Portugal - 0.25 - - - - - 4.84 5.09 Slovenia - - - - - - - 0.20 0.20 South Africa 0.80 - - - - - - - 0.80 Spain 4.85 0.30 - - - - - 5.00 10.15 Sweden 14.06 3.81 - - - 3.00 0.56 27.00 48.43 Switzerland 14.77 4.43 1.50 - - - - 58.05 78.75 United Kingdom 7.40 3.72 - - - 12.84 - 74.67 98.63 United States 7.50 3.74 - - - - - 79.92 91.16 ICDS - - - - - - - 2.65 2.65 Caribbean Devt Bank - - - - - - - 0.10 0.10 Others 0.65 - - - - 0.39 - 3.13 4.17 184.94 44.56 15.74 - 2.01 17.50 9.19 536.87 810.81 World Bank Group* IBRD - 14.50 - - 2.54 - - 5.85 22.89 IFC 17.86 32.30 12.00 35.41 3.56 0.75 14.90 157.32 274.10 MIGA - 2.91 - - - - - - 2.91 17.86 49.71 12.00 35.41 6.10 0.75 14.90 163.17 299.90 GRAND TOTAL 202.80 94.27 27.74 35.41 8.11 18.25 24.09 700.04 1,110.71 94 CUMULATIVE FINANCIAL SUPPORT BY REGION A = Sub-Saharan Africa 18% B = East Asia & the Pacific 10% C = South Asia 4% C = Europe & Central Asia 18% D = Latin America & the Caribbean 2% E = Middle East & North Africa 8% F = Global 37% G = Closed Facilities 3% CUMULATIVE FINANCIAL SUPPORT BY DONOR A = Canada 5% B = Italy 2% C = Japan 7% D = Netherlands 9% E = Norway 3% F = Sweden 4% G = Switzerland 7% H = United Kingdom 9% I = United States 8% J = IFC 25% K = Others 21% Note 1: TATF includes one-time funding for specific projects (excluding EC/IFC equity line of ECU 5 million). FIAS is a joint service supported by IFC and the World Bank. SBAP comprises CCF, EOF, and SFMF. CBF refers to the SME Capacity Building Facility to fund pilots, partnerships, and programs that support the WBG SME strategy. SGBI is a joint initiative supported by IFC and the World Bank. DevCo Advisory supports privatization transactions in infrastructure in least developed and low income countries. SME Initiatives comprise various initiatives. Note 2: This comprises SME Initiatives, and stand-alone global projects. Note 3: See next page for further details. # Indicates in-kind contribution from EximBank, India * Includes in-kind contribution from IBRD, IFC, and MIGA 95 Regional Facilities: IFC Donor-Supported Technical Assistance Cumulative Financial Commitments (unaudited) in $ millions equivalent up to June 30, 2005 SUB-SAHARAN AFRICA EAST ASIA & THE PACIFIC SOUTH ASIA DONOR APDF/PEP- Stand-alone Stand-alone Africa1,2 AMSCO MSI2 projects3 CPDF MPDF PEDF PENSA projects3 SEDF4 IFC Donor Community African Development Bank 8.06 4.00 - - - - - - - - ADB - - - - - 1.05 - 0.70 - 0.75 EBRD - - - - - - - - - - European Community - - - - - - - - - 11.90 Inter-American Devt Bank - - - - - - - - - - UNDP 10.00 4.69 - - - - - - - - Australia - - - - 1.48 3.44 5.04 3.05 0.62 - Austria - - - - - - - - - - Belgium 2.20 0.31 - - - - - - - - Canada 2.50 - - - 4.91 0.77 4.05 0.23 7.69 Denmark 9.50 5.64 - - - - - - - - Finland 2.20 2.62 0.52 - - 4.57 - - - - France 5.50 1.66 - - - - - - - - Germany 3.16 1.02 - - - - - - - - Greece - - - - - - - - - - India # - - - - - - - - - - Iceland - - - - - - - - - - Ireland - 1.50 - - - - - - - - Israel - - - - - - - - - - Italy 1.00 1.00 - - - - - - - - Japan 4.00 - - - - 2.53 6.64 1.00 - - Luxembourg - - - - - - - - - - Mexico - - - - - - - - - - Netherlands 10.79 7.79 - - 1.07 1.37 2.99 - 2.41 New Zealand - - - - - 0.76 1.81 - - - Norway 6.77 0.85 - - - 5.17 - - - 7.38 Poland - - - - - - - - - - Portugal 1.90 2.94 - - - - - - - - Slovenia - - - - - - - - - - South Africa - - - - - - - - - - Spain - - - - - - - - - - Sweden 5.37 3.66 - - 4.61 - - - - Switzerland 8.21 3.27 3.50 - 2.48 6.87 - 3.84 - - United Kingdom 3.78 3.26 - - 3.36 4.97 - - - 6.03 United States 11.50 2.70 - - - - - - - - ICDS - 2.65 - - - - - - - - Caribbean Devt Bank - - - - - - - - - - Others 0.23 0.62 - - 0.09 - 0.88 - - - 96.67 50.18 4.02 - 8.48 40.25 15.14 15.63 0.85 36.16 World Bank Group* IBRD - 5.85 - - - - - - - - IFC 28.60 9.27 3.00 3.10 5.00 9.00 4.41 5.00 6.60 7.00 MIGA - - - - - - - - - 28.60 15.12 3.00 3.10 5.00 9.00 4.41 5.00 6.60 7.00 GRAND TOTAL 125.27 65.30 7.02 3.10 13.48 49.25 19.55 20.63 7.45 43.16 96 Programs EUROPE & CENTRAL ASIA LAC MENA Closed TOTAL PEP BIDF2 SEED Stand-alone PEP- Facilities5 projects3 LACP MENA2 ISBFF - - - - - - - - 12.06 - - - - - - - - 2.50 - - - - - - - 1.22 1.22 0.65 - - - - - - 0.90 13.45 - - - - - - - 3.40 3.40 - - - - - - - 1.00 15.69 - - - - - - - - 13.63 1.61 1.03 2.27 - - - - - 4.91 - - - - - 0.60 - - 3.11 19.11 - 1.36 - - - - 5.17 45.79 0.50 - - - - - - 0.38 16.02 3.53 - - - - - - - 13.44 - - - - - - - - 7.16 1.20 - - - - - - 2.60 7.98 - 0.25 - - - - - 0.25 - - - - - - - - - 0.10 - - - - - - - 0.10 - - - - - - - 0.02 1.52 - - - - - - - - - - 1.50 - - - 1.76 - 0.78 6.04 - - - - - 10.00 10.00 1.25 35.42 - - - - - - - - - - - - - - - - 0.50 0.50 Note 1: PEP-Africa is a successor program 12.94 - 5.00 - 0.97 2.00 - 1.98 49.31 to APDF (ended in June 2005). The - - - - - - - - 2.57 successor program was designed in FY05 (includes $0.9m from the 0.27 1.00 3.20 - - - - 0.10 24.74 Secretariat for Economic Affairs of - - - - - - - 0.50 0.50 Switzerland, and an initial allocation - - - - - - - - 4.84 from IFC of $1.5 m.) - 0.20 - - - - - 0.20 Note 2: New donor-funded programs - - - - - - - - - include PEP-Africa, MSI, BIDF, and - - - - - 5.00 - 5.00 PEP-MENA. 7.16 - 2.21 - 2.96 - - 1.03 27.00 Note 3: Stand-alone projects include regional 20.62 1.50 4.00 - - 3.46 - 0.30 58.05 projects funded by donors and by IFC via FMTAAS. 36.67 - 0.90 - - - 15.00 0.70 74.67 39.92 - - - - 10.00 10.00 5.80 79.92 Note 4: SEDF includes South Asia SME Development Program - Sri Lanka - - - - - - - - 2.65 and Maldives, which was approved in - - - - - - - 0.10 0.10 FY05 as an expansion of SEDF. - - - - - - - 1.31 3.13 Note 5: Closed PDFs comprise BAS, 144.28 5.03 19.39 3.93 27.82 40.00 29.04 536.87 established in 1981 and closed during FY97; PBAS, established in - 1991 and closed during June 1996; - - - - - - - - 5.85 and ESSA, established in 1994 and 18.14 1.50 6.00 0.90 20.00 22.00 - 7.80 157.32 closed in January 2002. - - - - - - - - - # Indicates in-kind contribution from 18.14 1.50 6.00 0.90 20.00 22.00 - 7.80 163.17 EximBank, India 162.42 6.53 25.39 0.90 23.93 49.82 40.00 36.84 700.04 * Includes in-kind contribution from IBRD, IFC, and MIGA 97 International Finance Mozambique SME Initiative Program for Eastern Indonesia Corporation Mr. Richard W. Rutherford SME Assistance Chief Investment Officer Mr. Chris Richards Trust Funds Department Global Transaction Group General Manager Mr. Mwaghazi W. Mwachofi 2121 Pennsylvania Ave., N.W. JSE Buliding Tower II - 13/F Director MSN F9P-904 JI. Jenderal Sudirman 2121 Pennsylvania Ave., N.W. Washington, DC 20433, USA Kau 52-53 MSN F6K-606 Tel: 1-202- 473-0532 Jakarta 12190, Indonesia Washington, DC 20433, USA Fax: 1-202-974-4335 Tel: 62-21-2599-3001 Tel: 1-202-473-0231 Fax: 62-21-5299-3141 Fax: 1-202-974-4344 ASIA & THE PACIFIC SouthAsia Enterprise Trust Funds Department Development Facility Ms. Mary Ellen Iskenderian China Project Development Facility Mr. Anil Sinha Director Mr. Mario Fischel General Manager Foundations and Philanthropic Community General Manager United House 2121 Pennsylvania Ave., N.W. Suite 2716, 27th Floor 10 Gulshan Avenue MSN F6K-606 CCB Sichuan Building Dhaka 1212, Bangladesh Washington, DC 20433, USA No. 88 Tidu Street Tel: 880-2-986-1714-6 Tel: 1-202- 473-8658 Chengdu, Sichuan Province Fax: 880-2-989-4744 Fax: 1-202-974-4344 P.R. China 610016 Tel: 86-28-8676-6622 Fax: 86-28-8676-7362 EUROPE & CENTRAL ASIA Regional Project IFC Program for Assistance and Private Enterprise Partnership Development Facilities Cooperation for Enterprises Mr. Christian Grossmann in the Philippines Director Mr. Vipul Bhagat 36, Building 1, Bolshaya Molchanovka SUB-SAHARAN AFRICA Country Manager Street, 3rd Floor 11th Floor, Tower One 121069 Moscow African Management Services Company Ayala Triangle, Ayala Avenue Russian Federation Mr. Ayisi Makatiani Makati 1226, Manila, Philippines Tel: 7095-411-7555 Chief Executive Officer Tel: 63-2-848-7333/38 Fax: 7095-411-7556 14 Fricker Road Fax: 63-2-848-7339 Illovo, 2196 Private Enterprise Partnership- Johannesburg, South Africa Mekong Private Sector Southeast Europe Tel: 27-11-731-3000 (Main Line) Development Facility Mr. Alexander Paine Fax: 27-11-268-0074 Mr. Adam Sack General Manager General Manager Hamdije Kresevljakovica 19/4 Africa Project Development Facility 3rd Floor, 21-23 Nguyen Thi Minh Khai St 71000 Sarajevo Has been transformed into District 1, Ho Chi Minh City Bosnia and Herzegovina Private Enterprise Partnership for Africa Vietnam Tel: 387-33-251-555 Tel: 84-8-823-5266 Fax: 387-33-217-762 Private Enterprise Partnership for Africa Fax: 84-8-823-5271 Mr. Bernard Chidzero Private Enterprise Partnership-Southeast General Manager Pacific Enterprise Development Facility Europe Infrastructure 14 Fricker Road Ms. Mary Elizabeth Ward Mr. Angelo Dell'Atti Illovo, 2196 General Manager General Manager Johannesburg, South Africa Level 18, 14 Martin Place 36 Dragan Tsankov Blvd. Tel: 27-11-731-3000 (Main Line) CML Building World Trade Centre / INTERPRED Fax: 27-11-268-0074 Sydney, NSW 2000 1057 Sofia Tel: 61-2-9235-6502 Bulgaria Fax: 61-2-9223-2533 Tel: 359-2-9697-225 /230 Fax: 359-2-9697-222 98 LATIN AMERICA & THE CARIBBEAN Global Corporate Governance Forum Technical Assistance Trust Funds Program Ms. Teresa Barger Ms. Mariko Higashi Latin America and Caribbean Director Manager Technical Assistance Facility Corporate Governance Department Trust Funds Department Ms. Anita Bhatia 2121 Pennsylvania Ave., N.W. 2121 Pennsylvania Ave., N.W. General Manager MSN F4K-407 MSN F6K-606 Edificio Victor, Piso 9 Washington, DC 20433, USA Washington, DC 20433, USA Calle Fernando Guachalla Tel: 1-202-473-8801 Tel: 1-202-473-5615 No. 342-Sopocachi Fax: 1-202-522-7588 Fax: 1-202-974-4344 La Paz, Bolivia Tel: 591-2-244-3753 Global Environment Facility Fax: 591-2-212-9880 Mr. Alan Miller SUSTAINABLE BUSINESS Coordinator ASSISTANCE PROGRAM Environment and Social Development MIDDLE EAST & NORTH AFRICA Department Corporate Citizenship Facility 2121 Pennsylvania Ave., N.W. Mr. Nick Flanders Private Enterprise Partnership for the MSN F3K-300 Program Leader Middle East and North Africa Washington, DC 20433, USA Environment and Social Development Mr. Jesper Kjaer Tel: 1-202-473-8324 Department General Manager Fax: 1-202-974-4800 2121 Pennsylvania Ave., N.W. World Trade Center Bldg., 19th Floor MSN F9P-904 1191 Corniche El Nile Street, Boulac Infrastructure Development Washington, DC 20433, USA Cairo, Egypt Collaboration Partnership Fund Tel: 1-202- 473-3479 Tel: 20-2-579-5912 Mr. David Donaldson Fax: 1-202-974-4348 Fax: 20-2-579-6447 Program Manager Advisory Services Department Environmental Opportunities Facility 14 Fricker Road Ms. Corinne Figueredo Global Programs Illovo, 2196 Program Leader Johannesburg, South Africa Environment and Social Tel: 27-11-731-3000 (Main Line) Development Department Capacity Building Facility Fax: 27-11-268-0074 2121 Pennsylvania Ave., N.W. Ms. Irina Niederberger MSN F3K-309 Coordinator Mr. John Leber Washington, DC 20433, USA SME Department Coordinator Tel: 1-202-473-2899 2121 Pennsylvania Ave., N.W. Advisory Services Department Fax: 1-202-974-4389 MSN F3P-305 2121 Pennsylvania Ave., N.W. Washington, DC 20433, USA MSN F7K-700 Sustainable Financial Markets Facility Tel: 1-202-473-2370 Washington, DC 20433, USA Mr. Clive Mason Fax: 1-202-522-3472 Tel: 202-473-4437 Program Leader Fax: 202 522-0920 2121 Pennsylvania Ave., N.W. Foreign Investment Advisory Service MSN F3P-301 Mr. Thomas Davenport Strengthening Grassroots Washington, DC 20433, USA Manager Business Initiative Tel: 1-202-458-4070 Investment Climate Department Mr. Harold Rosen Fax: 1-202-974-4348 2121 Pennsylvania Ave., N.W. Director MSN F4K-298 2121 Pennsylvania Ave., N.W. Washington, DC 20433, USA MSN F4P-403 Tel: 1-202-458-1856 Washington, DC 20433, USA Fax: 1-202-522-2138 Tel: 1-202-473-8841 Fax: 1-202-522-1429 Mr. Nigel Twose Manager Investment Climate Department 2121 Pennsylvania Ave., N.W. MSN F4K-410 Washington, DC 20433, USA Tel: 1-202-458-9086 Fax: 1-202-522-2138 99 Glossary ACG/BTC Azeri-Chirag-Deepwater Gunashli MSME micro, small, and medium enterprises Oilfield/Baku-Tbilisi-Ceyhan NGO nongovernmental organization ADB Asian Development Bank NIPS National Investment Policy Statement AMSCO African Management Services Company NZAID New Zealand Agency for International Development APDF Africa Project Development Facility OAS Organization of America States BAS Business Advisory Service for OECD Organization for Economic Cooperation the Caribbean and Central America and Development BCR Banca Comerciala Romana OPIC Overseas Private Investment Corporation BIDF Balkans Infrastructure Development Facility PBAS Polish Business Advisory Service BP British Petroleum PDF project development facility CARE Cercle d'Action et de Reflexion autour de l'Entreprise PDR People's Democratic Republic CBF Capacity Building Facility PEAC Promoting Enterprise Access to Credit CCF Corporate Citizenship Facility PEDF Pacific Enterprises Development Facility CPDF China Project Development Facility PENSA Program for Eastern Indonesia SME Assistance DCCI Dhaka Chamber of Commerce and Industries PEP Private Enterprise Partnership DEVCO Infrastructure Development Collaboration PEP-Africa Private Enterprise Partnership for Africa Partnership Fund PEP-MENA Private Enterprise Partnership for DFID UK Department for International Development Middle East and North Africa DFO Donor-funded operations PEP-SE Private Enterprise Partnership ­ Southeast Europe EC European Community PNG Papua New Guinea EOF Environmental Opportunities Facility PNGDA Papua New Guinea Divers Association ESSA Enterprise Support Service for Africa PSD private sector development EU European Union SAARC SouthAsian Association for Regional Cooperation EXIM Export-Import Bank of India SAWEN South African Women Network FDI foreign direct investment SBAP Sustainable Business Assistance Program FIAS Foreign Investment Advisory Service SECA Southern Europe and Central Asia FMTAAS Funding Mechanism for Technical Assistance seco State Secretariat for Economic Affairs of Switzerland & Advisory Services SEDF SouthAsia Enterprise Development Facility FY fiscal year SEED Southeast Europe Enterprise Development FYR former Yugoslav Republic SEWA Self-Employed Women's Association HACCP Hazard Analysis of Critical Control Points SFMF Sustainable Financial Markets Facility IBRD International Bank for Reconstruction SGBI Strengthening Grassroots Business Initiative and Development SME small and medium enterprise IT information technology TA technical assistance IDA International Development Association TAAS technical assistance and advisory services IFC International Finance Corporation TATF Technical Assistance Trust Funds IFC-PACE Program of Assistance and Cooperation for TF trust fund Enterprises in the Philippines UAE United Arab Emirates IMF International Monetary Fund UNDP United Nations Development Programme ISBFF Iraq Small Business Financing Facility UNIDO United Nations Industrial Development Organization LAC Latin America and the Caribbean USAID United States Agency for International Development MENA Middle East and North Africa WTO World Trade Organization MIGA Multilateral Investment Guarantee Agency $ US$ MPDF Mekong Private Sector Development Facility =C EURO MSI Mozambique SME Initiative Rp. Indonesian Rupiah 100 Contributors and Production Team (IFC Trust Funds Department) Veronica Banez, Monica Chong, Leslie Christensen, Maria Cussianovich, Yves de Rosee, Margaret Ghobadi, Mariko Higashi, Mary Ellen Iskenderian, Wei-Jen Leow, Reina Kawaguchi, Aminata Mbodj, Mwaghazi Mwachofi, Rene Ngo, Tran Nguyen, Tatiana Nikolskaya, Michael O'Neill, Bayo Oyewole, Georg Schmidt, Sophana So, Francis Tamakloe, Luz Tatlonghari, Amber Turner, Anton van Ruiten, Wai-Keen Wong SPECIAL THANKS TO PRIMARY CONTRIBUTORS OTHER CONTRIBUTORS Sub Saharan Africa Middle East & North Africa Asmara Amdeberhan, Geeta Batra, Laurence Carter, Mark Ampah, Bernard Chidzero, Frank Armand Torek Farhadi, Margaret Henderson, Tom Jacobs, Fiona Duggan, Simon Fowler, Caroline Goldie, Brigid Douamba, James Emery, Hillmare Schulze Nadia Mahmud, Sebastian Molineus, Holleran, Anushe Khan, Dana Lane, Elena Lee, Dina Mary Porter Peschka Lirag, Toshi Masuoka, David Martz, Paul McClure, Peer East Asia & the Pacific Stein, Uday Wagle, Mariann Kurtz Weber, Rob Wright, Amitava Banerjee, Ann Bishop, Mario Fischel, Foreign Investment Advisory Service Yan Michelle Zhang, DFO Finance Officers Jinchang Lai, Chris Richards, Adam Sack, Rina Oberai Catherine St. Ledger, Makiko Toyoda PHOTO CREDITS Environmental and Social Development Laura Bures, Richard Caines, Stan Constantin, Mark South Asia Department / SBAP Fallander, Margaret Ghobadi, Matthias Hedinger, Anastasia Gekis Louise Gardiner, Corinne Figueredo, Marichris Javier, Susanna Irwan, Danny Juddin, Byron Lee, Irina Alex Leite, Andrea Kennedy King, Harry Pastuszek, Likhachova, Breton Littlehales, Subrata Kumar Central & Eastern Europe Russell Sturm Mitra, Catherine O'Farrell, Jill Partington, Alejandro Irina Likhachova Perez, Nicholas Van Praag, Tamar Razmadze, Nicola Capacity Building Facility Saporoti, Vadim Solovyov, Abigail Tamakloe, Ghada Southern Europe & Central Asia David Lawrence, Irina Niederberger, Teima, Wai-Keen Wong, Rob Wright, Staff of CPDF, Sanjin Arifagic, Neeraj Jain, Anne Lagomarcino Shaela Rahman, Rob Simms Staff of IFC's Eastern Europe Department, Staff of MPDF, Staff of SEDF, Staff of IFC's SME Department, Latin America & the Caribbean Strengthening Grassroots Business Initiative Aid to Artisans (ATA), BRAC BANK Ltd. (Bangladesh), Atul Mehta, Paul Melton, Junko Oikawa, Ellen Olafsen, Marjorie Pavia FATE Foundation (Nigeria), Hagar, Honey Care Africa, Eduardo Wallentin NOVICA United, Inc., TechnoServe, Inc. Advisory Services Department John Leber, Catherine O'Farrell DESIGN: Design Army, Washington D.C. PRINTING: Art Litho, Maryland INTERNATIONAL FINANCE CORPORATION 2121 Pennsylvania Ave., N.W. Washington, DC 20433 USA Tel: 1-202-473-0535 Fax: 1-202-974-4344 www.ifc.org www.ifc.org/tatf