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Add to Preferred SourcesIFC, a member of the World Bank Group, and DEG – Deutsche Investitions- und Entwicklungsgesellschaft, have agreed to collaborate more closely to create markets, mobilize private sector investment, and support economic recovery in developing countries in the wake of the COVID-19 global crisis.
Seeking to address the need for increased collective action among development finance institutions, the Joint Collaboration Framework Agreement (JCFA) will help leverage the partners’ collective strengths to deliver needed development impact in some of the world’s most challenging settings.
The agreement addresses a full range of collaboration activities with an emphasis on three key areas.
- First, it details the approach for helping to build a pipeline of bankable and high-impact projects aimed at laying the groundwork to attract investors into developing countries.
- Second, it promotes greater reciprocity in project co-financing arrangements and allows IFC to join transactions originated by DEG.
- Third, it is aligned with the “Blended Concessional Finance Principles for Private Sector Projects,” a disciplined and targeted approach to blending funds from concessional donor and commercial sources, as an integral part of the activities covered by the JCFA.
“Building on our successful collaboration to help countries achieve the Sustainable Development Goals, we will intensify our work to accelerate the flow of private capital – domestic and foreign – into productive investment in the countries in which we operate. This underlines the critical importance of coordinating the work of DFIs and MDBs to maximize development impact,” said Philippe le Houérou, the Chief Executive Officer of IFC.
In March, IFC announced that it would make $8 billion available to support private companies and their employees hurt by the economic downturn caused by the spread of COVID-19. The bulk of the IFC financing will go to client financial institutions to enable them to continue to offer trade financing, working-capital support and medium-term financing to private companies struggling with disruptions in supply chains. IFC’s response will also help existing clients in economic sectors directly affected by the pandemic–such as tourism and manufacturing—to continue to pay their bills.
Original source: IFC
Published on 05 May 2020