IFC commits USD 3.4 bln to ensure sustained growth in East Asia and Pacific

Rapid urbanization and increasing business demand in the East Asia and the Pacific region are feeding massive infrastructure needs, while at the same time, the region is a major contributor to the global greenhouse gas emissions and highly vulnerable to natural disasters and climate impact.

IFC, a member of the World Bank Group, committed $3.4 billion in the fiscal year 2018 in East Asia and the Pacific, spurring the growth of a thriving private sector in the region to ensure sustained growth through innovation, job creation, and infrastructure development, among others.

IFC provided $2 billion in financing for its own account and mobilized $1.4 billion from other investors in the fiscal year, with IFC’s support enabling businesses to provide over 550,000 jobs, distribute power to 4.4 million people, provide water to 9.6 million people, and improve livelihoods of more than 710,000 farmers.

Rapid urbanization and increasing business demand in the East Asia and the Pacific region are feeding massive infrastructure needs, while at the same time, the region is a major contributor to the global greenhouse gas emissions and highly vulnerable to natural disasters and climate impact. 

“In the face of countries’ limited public resources, IFC has been actively looking for solutions to the crowd in all possible sources of finance, innovation, and expertise to help meet their challenges,” said Vivek Pathak, IFC’s Regional Director for East Asia and the Pacific. “IFC is unlocking opportunities in emerging markets and creating jobs with the aim of achieving sustainability through lower costs and efficient service delivery in key sectors such as finance, infrastructure, healthcare, and education.”

IFC’s work has been helping spur the development of green bonds in the region. IFC led World Bank Group support for Fiji to become the first emerging market in the world to issue a sovereign green bond, raising $50 million to help the country adapt to a changing climate. IFC was also the sole investor in the BDO Unibank Inc.’s $150 million green bond — the first to be issued by a commercial bank in the Philippines and IFC’s first such investment in a financial institution in the region. IFC has also catalyzed similar investments in Thailand and Indonesia. In another first, IFC issued a peso-denominated green bond — equivalent to approximately $90 million — to support capital markets and climate-smart investments in the Philippines.

Meanwhile, in Vietnam, where only about 35 per cent of the population is connected to piped water, IFC lent $15.3 million to one of the first private sector water companies — DNP Water JSC — to increase the availability of clean water for urban households and residents in provincial cities. 

As the private sector contributes 90 per cent of jobs in the region, IFC has been boosting its support to small and medium-sized enterprises (SMEs) to promote job creation, which is key to reducing poverty in the region. IFC’s $100 million loan package to Indonesia’s PT Surya Semesta Internusa Tbk (SSIA) will help develop a new 2,000-hectare green industrial estate and provide over 34,000 jobs in Subang, West Java. IFC’s loan to the furniture manufacturer Morris Holdings Limited will enable the installation of a modern production facility in Cambodia’s Sihanoukville Special Economic Zone, creating about 800 jobs for local people.

In Lao PDR, IFC and Thailand’s TMB Bank teamed up to provide $9.1 million in financing to ACLEDA Bank Lao Ltd to help the bank increase access to finance for the country’s SMEs, especially those owned by women. IFC’s support to banks across East Asia and the Pacific was estimated to have generated more than 16 million loans to micro, small and medium enterprises totalled at $209 billion in the calendar year 2017.

In addition to financing, IFC advises governments and the private sector in the region to create a business-enabling environment and improve sustainability standards. At the end of FY18, IFC’s advisory services program in East Asia and the Pacific included 108 active projects valued at a combined $244.1 million.

In FY19, in coordination with other World Bank Group’s member organizations, IFC’s strategic focus continues to be on maximizing private finance to address development challenges. By working with governments on a business-friendly environment and mobilizing WBG resources, IFC is promoting private investments in the power sector in Myanmar, the Philippines, Papua New Guinea, Lao PDR and Vietnam; in tourism in Indonesia, Papua New Guinea, Solomon Islands and Fiji, and in agribusiness in Vietnam, among others.  

The Hong Kong Monetary Authority’s $1 billion commitment to its Managed Co-Lending Portfolio Program will enable IFC to expand financing projects across the region. It will increase investment in health and education after providing $200 million in funding to expand access to higher education as well as vocational and tertiary training across China. IFC’s strategic priorities in the region will also be the subject of talks at the 2018 IMF-World Bank Group Annual Meetings to take place in Bali Nusa Dua, Indonesia, in October.