2014 90949 v1 BIG CHALLENGES BIG SOLUTIONS IFC ANNUAL REPORT 2014 1 4-21 22-29 30-57 58-106 BIG CHALLENGES IFC LEVERAGING THE POWER OF ABOUT US DEMAND BIG SOLUTIONS GLOBAL RESULTS THE PRIVATE SECTOR Our Management Team 22 Creating Opportunity 32 Financial Highlights 25 Expanding Resources for Development 40 Operational Highlights 25 Tackling the Biggest Challenges 46 IFC’s Global Impact 26 BImproving Lives 52 WORLD BANK GROUP 2014 SUMMARY RESULTS Message from The President of the World Bank Group and Chairman of the Board of Executive Directors Two years ago, the World Bank Group began down a path of renewal and change to prepare our organization to take on to its toughest challenge yet — ​ end extreme poverty in a single generation. At the 2013 Spring Meetings, we adopted two ambitious goals: to end extreme poverty by 2030 and to boost shared prosperity for the poorest 40 percent in developing countries. To make us fit for this purpose, at our The challenge is immense. To reach our Annual Meetings last October, our Board of end poverty goal, we have to help tens Governors approved the first strategy for of millions of people lift themselves out of the entire World Bank Group. This strategy poverty each year. It is a daunting task, focuses on delivery of transformational but if we effectively implement our strategy, solutions, marshals our combined resources we know we can achieve it. more effectively, and accelerates our col­ In this Annual Report, you will learn laboration with the private sector and other how we have been implementing the development partners. strategy over the past year. Our four princi­ pal institutions — ​the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corpora­ tion (IFC), and the Multi­ We are focused on lateral Investment Guarantee Agency (MIGA) — ​ now work together as one World improving the lives Bank Group to accomplish our mission. We have made great progress. of roughly a billion Engagement with our country partners is now more selective, as we work closely people now living with them to identify the best opportunities to reach our common goals. Our new global in extreme poverty, practices and cross-cutting solution areas are improving our ability to bring our clients and seek to build the best global knowledge to solve their toughest challenges — ​ and with fewer trans­ a world that is action costs. Our financial structure has been more sustainable, updated and strengthened, growing our financial capacity while reducing expen­ prosperous, and ditures and directing the savings to our clients. This year, the World Bank Group just—for all of us. committed $65.6 billion in loans, grants, equity investments, and guarantees to its members and private businesses. Commitments from IBRD totaled $18.6 bil- The World Bank Group leadership and l ­ ion, while IDA, the World Bank’s fund staff are united in pursuing our urgent for the poorest, made commitments of mission, and are implementing the critical $22.2 billion. Thanks to a record $52 billion changes needed to deliver results for our replenishment pledged by donors for the clients. We are focused on improving the next three years, IDA will continue to make lives of roughly a billion people now living crucial investments in people so that the in extreme poverty, and seek to build a world benefits of growth are shared by all. that is more sustainable, prosperous, and Over the past two decades, 90 percent for all of us. just — ​ of new jobs were created by the private sector — ​ and good jobs were by far the most effective path to escaping poverty. Our private sector arm IFC and our political risk insurance arm MIGA are ramping up their efforts to leverage private sector investment and create more jobs and economic oppor­ DR. JIM YONG KIM tunities for the poor. This year, IFC provided President of the World Bank Group more than $22 billion in financing for pri­ and Chairman of the Board of vate sector development, about $5 billion Executive Directors of which was mobilized from investment partners. MIGA issued $3.2 billion in politi­ cal risk and credit enhancement guarantees underpinning investments, including in transformational projects. To have a lasting impact, our investments have to be environmentally sustainable. If we don’t confront climate change, we won’t end extreme poverty. The poor are the first impacted and suffer the most from the effects of climate change. Last year we announced our plan to address climate change, and we are making investments that will protect our environment while creating a more sus­ t ainable future for our children and grandchildren. GLOBAL COMMITMENTS The World Bank Group’s LATIN AMERICA & THE CARIBBEAN support for developing $9.8 Billion countries grew sharply over the past year as the organization focused on delivering results more quickly, increasing its relevance for its clients and partners, and bringing global solutions to local challenges. EUROPE & CENTRAL ASIA $11.0 Billion EAST ASIA & THE PACIFIC $10.0 Billion MIDDLE EAST & NORTH AFRICA $4.8 Billion SOUTH ASIA $13.6 Billion SUB-SAHARAN AFRICA $16.1 Billion 65.6 $ BILLION in loans, grants, equity investments, and guarantees to partner countries and private businesses. Total includes multiregional and global projects. Regional breakdowns reflect World Bank country classifications. OUR IMPACT The entire World Bank DRIVING ECONOMIC GROWTH Group leveraged its strengths, expertise, and resources IBRD/IDA to help countries and other partners make a real impact on development— 95,000 kilometers of roads constructed and rehabilitated by driving economic growth, promoting inclusiveness, and ensuring sustainability. 15.3 million people and micro, small, and medium enterprises reached with financial services IFC 2.6 million jobs provided 94 million customers supplied with power, water, and gas MIGA 52,100 jobs provided $6.1 billion new business loans issued by MIGA clients PROMOTING INCLUSIVENESS ENSURING SUSTAINABILITY IBRD/IDA IBRD/IDA 250.9 million people received health, nutrition, 903 million tons of CO2 equivalent emissions and population services expected to be reduced annually 37.4 million beneficiaries covered by social 57 countries with strengthened public financial safety net programs management systems IFC IFC 2.9 million farmers assisted 5.5 million metric tons of greenhouse emissions expected to be reduced 2.5 million students received $18.7 educational benefits billion in government revenues generated by IFC clients MIGA MIGA 47 million people provided access to power 3.3 million people provided access to clean water 15 million people provided access to transport $1.6 billion in government revenues generated by MIGA clients THE INSTITUTIONS OF THE WORLD BANK GROUP International Bank for Reconstruction Multilateral Investment Guarantee and Development (IBRD) Agency (MIGA) Lends to governments of middle-income Provides political risk insurance or and creditworthy low-​ income countries guarantees against losses caused by noncommercial risk to facilitate foreign International Development direct investment in developing countries Association (IDA) Provides interest-free loans, or credits, International Centre for Settlement of and grants to governments of the poorest Investment Disputes (ICSID) countries Provides international facilities for conciliation and arbitration of investment International Finance Corporation (IFC) disputes Provides loans, equity, and advisory services to stimulate private sector investment in developing countries WORLD BANK GROUP FINANCING FOR PARTNER COUNTRIES (by fiscal year, in millions of dollars) World Bank Group 2014 2013 2012 2011 2010 Commitments1 65,579 57,587 57,450 61,120 76,482 Disbursements2 44,399 40,370 42,390 42,028 50,234 IBRD Commitments 18,604 15,249 20,582 26,737 44,197 Disbursements 18,761 15,830 19,777 21,879 28,855 IDA Commitments 22,239 16,298 14,753 16,269 14,550 Disbursements 13,432 11,228 11,061 10,282 11,460 IFC Commitments3 17,261 18,349 15,462 12,186 12,664 Disbursements 8,904 9,971 7,981 6,715 6,793 MIGA Gross issuance 3,155 2,781 2,657 2,099 1,464 Recipient-Executed Trust Funds Commitments 4,319 4,910 3,996 3,829 3,607 Disbursements 3,302 3,341 3,571 3,152 3,126 1. Includes IBRD, IDA, IFC, Recipient-Executed Trust Fund (RETF) commitments, and MIGA gross issuance. RETF commitments include all recipient-executed grants, and therefore total World Bank Group commitments differ from the amount reported in the Bank Group Corporate Scorecard, which includes only a subset of trust funded activities. 2. Includes IBRD, IDA, IFC, and RETF disbursements. 3. IFC’s own account, not including funds mobilized from third parties. bout IF ABOUT IFC STAY CONNECTED Web and Social Media Resources IFC, a member of the World Bank Group, IFC’s website, www.ifc.org, provides comprehensive IFC Online is the largest global develop­ IFC website ifc.org Photography: Cover: Insert: Illusion CGI Studio Ray Rayburn/WB Photolab Page 2: Iwan Bagus information on every aspect ment institution focused of our activities. It includes Annual Report ifc.org/AnnualReport Page 6: Illusion CGI Studio Page 8: GS/Gallery Stock Page 9: Amani Willett/ on the private sector contact information for offices Social Media Index Gallery Stock Page 10: Kurt Stallaert/ in developing countries. ifc.org/SocialMediaIndex Gallery Stock worldwide, news releases Page 11: Richard Hamilton Smith/ Facebook Gallery Stock and feature stories, data on facebook.com/IFCwbg Page 12: Steve Cole/Getty Page 13: Will Sanders/Getty results measurement, disclosure Twitter Page 14: Christian Kober/Getty Page 15: GS/Gallery Stock documents for proposed twitter.com/IFC_org Established in 1956, IFC is owned Page 16: GS/Gallery Stock Page 17: Tom Nagy/Gallery Stock investments, and key policies LinkedIn by 184 member countries, a group thatPage 18: Leren Lu/Getty on.ifc.org/ifcLinkedIn and guidelines. collectively determines our policies. Page 19: Gallery Catherine Hyland/ Stock Google+ Page 20: Gallery Stock: Jens gplus.to/IFCwbg of IFC’s The online versionWith a global presence in more than Goerlich (2), Peter Guenzel; Cityscape Digital; Panos: Annual Report 2014 100 countries, provides a Scribd network of nearly scribd.com/IFCpublications Georg Gerster, Qilai Shen Getty: Fuse; World Bank: downloadable PDFs 1,000 financial of all institutions, YouTube and more Imal Hashemi/Taimani Films, UNICEF Burundi/ and private than 2,000 materials in this volume sector clients, youtube.com/IFCvideocasts Colfs, John Hogg, Graham Crouch, Scott Wallace IFC translations as they is uniquely positioned to create Page 22: Iwan Bagus become Credits opportunity available. It is available at where it’s Report IFC Annual needed Team: most. Page 30: Bridge International Academies Bruce Moats Page 31: Kruno Blažinovi, ECOM www.ifc.org/ annualreport. We use ourThecapital, expertise, and Director, External and Corporate Coffee, Joseph Rebello Relations, World Bank Group Page 32: Seven Energy website also provides more to helpLisa influence Kopp extreme poverty end Page 34: Fedecredito Page 35: Finca Afghanistan information on sustainability, and boost shared prosperity. Head, Brand Management Page 36: Bridge International Joseph Rebello Academies including a Global Reporting Chief Editor Page 38: Del Campo; Richard Caines (inset) Initiative index. Aaron Rosenberg Page 40: Shailesh Andrade Chief of Public Affairs Page 43: Kruno Blažinovi Inae Riveras Page 44: Konrad Wothe Editorial Consultant Page 45: Andrew McConnell/Panos Page 47: Muntasir Mamun Imran Katherine Klaben Page 48: Dana Smillie/World Bank Consultant Page 50: ECOM Coffee Design: Addison Page 51: Brangelina Clawson/World Bank (inset) www.addison.com Page 52: Joseph Rebello Printing: Phoenix Litho Page 55: Brad Roberts 1 phoenixlitho.com Page 56: Mehmet IFC Annual Namik Report 2014Ugur, World Bank LEADERSHIP PERSPECTIVE A Letter from IFC Executive Vice President and Chief Executive Officer Jin-­Yong Cai These are challenging times for developing countries. Economic growth remains lackluster, despite the brightening outlook in wealthier countries. Job creation remains insufficient to absorb the growing numbers of young people entering the workforce. In many countries, the basic infrastructure necessary for sustained prosperity—power grids, schools, banks—remains woefully inadequate. IFC Annual Report 2014 2 At IFC, we are stepping up our efforts to deliver development-effectiveness and client-satisfaction lasting solutions. As the largest global development ratings. We delivered an increasing number of client institution focused on the private sector, we take solutions that involved a combination of investment a comprehensive approach — ​ enabling businesses to and advice — ​nearly 160 new advisory engagements innovate, to fully leverage the benefits of modern with investment clients, marking an increase of technology and infrastructure, to build internation- almost 80 percent over the previous year. ally competitive industrial sectors, and to expand IFC Asset Management Company continued opportunities for people to find good jobs. to grow, increasing its assets under management to Over the past year, IFC achieved significant more than $6 billion across six investment funds development impact — ​ in some of the world’s most with a strong mix of reputable investors. In FY14 it challenging environments. With our support, more completed fund-raising for the IFC Global Infra­ than 2,000 IFC clients — ​ located in every region of structure Fund, raising $1.2 billion. It also completed the world — ​provided about 2.6 million jobs, distrib- fund-raising for the IFC Catalyst Fund, raising uted power, water, and gas to more than 94 million $418 million for climate-smart investments. customers, and distributed more than $300 billion Big challenges demand big solutions. As we in loans to micro, small, and medium enterprises. move ahead, I am convinced that IFC can deliver even They helped treat more than 27 million patients and more impressive results — ​ by deepening our engage- educate about 2.5 million students. ment with clients, by bringing to bear the full range of We provided a record amount of financing for capabilities available in the World Bank Group, and private sector development in the world’s poorest by focusing on activities with the greatest potential to countries — ​nearly $8.5 billion in all, including funds end extreme poverty and boost shared prosperity. mobilized from other investors. These countries accounted for half of the nearly 600 projects we began during the year. Our annual investments in fragile and conflict-affected areas have climbed 20 percent over the past two years — ​to nearly $950 million, JIN-YONG CAI including funds IFC mobilized from other investors. IFC Executive Vice President Globally, we invested more than $22 billion and Chief Executive Officer in about 100 developing countries, including about $5 billion mobilized from other investors. And we did so in ways that made IFC more financially sus- tainable. Our investments have demonstrated that commercial and developmental success are mutually reinforcing — ​even in the most challenging areas. Our consistent investment results have enabled us to provide significant financing — ​more than $2.8 billion since 2007 — ​for the World Bank’s International Development Association, which provides grants to the poorest countries. Fiscal year 2014 also was a strong year for our advisory services, which did two-thirds of its work in IDA countries, including almost 20 percent in fragile and conflict-affected areas, and achieved record 3 IFC Annual Report 2014 BIG CHALLENGES DEMAND BIG SOLUTIONS. Every year, an untold number of entrepreneurs in developing countries see their business fail— because capital is scarce and expensive. Millions of young people can’t find a job—because their education hasn’t prepared them for the needs of the market. Countless small companies struggle to expand. IFC Annual Report 2014 4 These are obstacles that must be overcome if we are to end extreme poverty and boost shared prosperity in every developing country. It cannot be done without the creativity and resources of the private sector—the main engine of global economic growth and prosperity. That is where IFC comes in. As the largest global development institution focused on the private sector, IFC works closely with businesses in developing countries to help them succeed in ways that promote prosperity for all. In doing so, we bring to bear all of the expertise and resources of the World Bank Group. Together, we help countries establish a robust foundation for development—by putting in place the physical, social, and financial infrastructure necessary for sustained prosperity. 5 IFC Annual Report 2014 Big Challenges Big Solutions ommun To communicate… IFC Annual Report 2014 8 …businesses need technology infrastructure OUR FOCUS: TECHNOLOGY Modern information and telecommunications technologies make it easier for the poor to obtain access to services and resources. These technologies expand opportunity and make markets and institutions more efficient. IFC works to extend their availability. 9 IFC Annual Report 2014 To grow more food… gr OUR FOCUS: AGRICULTURE Agribusiness is a priority for IFC because of its potential for broad development impact and strong role in poverty reduction. We combine investments with advisory services to help this sector meet the growing demand for food in environmentally sustainable and socially inclusive ways. IFC Annual Report 2014 10 rowth …businesses need modern methods of production 11 reac To reach new customers…  OUR FOCUS: INFRASTRUCTURE  Efficient infrastructure spurs economic growth, improves living standards, and can help address challenges such as urbanization and climate change. IFC helps increase access to power, transportation, and water by financing projects and advising governments on public-private partnerships. IFC Annual Report 2014 12 ch …businesses need good roads and transportation 13 IFC Annual Report 2014 To expand… expand OUR FOCUS: ACCESS TO FINANCE Sound, inclusive, and sustainable financial markets are essential to end poverty and boost shared prosperity — ​ they create opportunity for individuals to succeed and for businesses to grow and create jobs. IFC works to increase the availability and affordability of key financial services such as credit, savings, and insurance. IFC Annual Report 2014 14 …businesses need greater access to finance 15 thriv To thrive… 16 ve …businesses need an educated and healthy workforce OUR FOCUS: HEALTH CARE & EDUCATION Health and education are fundamental to human development—and therefore a central element in any strategy to end poverty and reduce inequality. IFC supports clients that deliver high-quality services to low- and middle-​ income people. 17 IFC Annual Report 2014 ustaina To succeed in the long run… OUR FOCUS: SUSTAINABILITY In a time of climate change, scarcity of resources, and rising social pressures, businesses need to adopt sound environmental, social, and corporate gover- nance practices. IFC helps clients in this process, encouraging transparency and accountability. IFC Annual Report 2014 18 …businesses need to adopt sustainable practices 19 IFC Annual Report 2014 $4 .1 bi ll io n in ve st ed in in fr as tr uc tu re IFC Annual Report 2014 $2 WH 5 . bi EN $1 io ll .6 n bi in io ll ve n st in ed BUS in ve st cl ed 10 im 0 in at INE in e- in c ve re l lu s st m at iv ed SSE en eb t-c lim pr oj ec S in e us 20 59 ts ss at es er FLO ef or m ss up URI p or te d $3 SH 00 bi 2. ll io 6 n m in ill lo io an n sm jo $1 bs s 8. ad 6 up et bi p or om ll io te ic n d 2. 9 m ro in ,s m ill re io ve n al l, nu fa an es r m d ge er m ne sa ed ra iu te m ss d is fo d te en r te go rp ve ri rn se s m en ts r fo ed ar sc nt tie IFC Annual Report 2014 pa n io ill m 27 SH URI FLO IES ed id ov NIT pr ns d tio te MU ca du ec e nn ts co ne en COM ud o ph s st ie tr n n un io io co ill ill 1m m 60 21 A 5 2. 18 ID in ed st ve in n io ll bi 5 . er $8 w po ns ith io w ut d ie ol pl gs up er in ss at ht er w lig om ith d st w ri s d -g ga cu ie ith n pl o io w ill up om d ie fr ss m er pl d e .6 up fit 75 om ne ss st be er cu le n op om io st ill pe n cu m io n .3 ill io 30 m ill 5 m 8. 40 OUR MANAGEMENT Our seasoned team of executives ensures that IFC’s resources are deployed effectively, with a focus on maximizing development impact and meeting TEAM the needs of our clients. IFC’s Management Team benefits from years of development experience, a diversity of knowledge, and distinct cultural perspectives—qualities that enhance IFC’s uniqueness. The team shapes our strategies and policies, positioning IFC to help improve the lives of more poor people in the developing world. IFC Annual Report 2014 22 Left to right (titles as of June 30, 2014): Jingdong Hua Vice President, Treasury and Syndications • Jean Philippe Prosper Vice President, Sub-Saharan Africa and Latin America and the Caribbean • Karin Finkelston Vice President, Asia-Pacific • Gavin Wilson CEO, IFC Asset Management Company • Saadia Khairi Vice President, Risk Management and Portfolio • Ethiopis Tafara Vice President and General Counsel • Jin-Yong Cai IFC Executive Vice President and CEO • Nena Stoiljkovic Vice President, IFC Advisory Services, and Global Practices Vice President for the World Bank Group • Dimitris Tsitsiragos Vice President, Europe, Central Asia, Middle East and North Africa. 23 IFC Annual Report 2014 IFC YEAR IN REVIEW In FY14, IFC invested more than $22 billion, including about $5 billion mobilized from other investors. Our comprehensive approach helped businesses inno­ vate, build internationally competitive industrial sectors, and create good jobs. IFC Annual Report 2014 24 IFC FINANCIAL HIGHLIGHTS 2014 2013 2012 2011 2010 Dollars in millions, as of and for the years ended June 30* Net income (loss) attributable to IFC $  1,483 $  1,018 $  1,328 $  1,579 $  1,746 Grants to IDA $    251 $    340 $    330 $    600 $    200 Income before grants to IDA $  1,739 $  1,350 $  1,658 $  2,179 $  1,946 Total assets $84,130 $77,525 $75,761 $68,490 $61,075 Loans, equity investments and debt securities, net $38,176 $34,677 $31,438 $29,934 $25,944 Estimated fair value of equity investments $14,890 $13,309 $11,977 $13,126 $10,146 Key Ratios Return on average assets (GAAP basis) 1.8% 1.3% 1.8% 2.4% 3.1% Return on average capital (GAAP basis) 6.4% 4.8% 6.5% 8.2% 10.1% Cash and liquid investments as a percentage of next three years’ estimated net cash requirements 78% 77% 77% 83% 71% Debt-to-equity ratio 2.7:1 2.6:1 2.7:1 2.6:1 2.2:1 Total resources required (billions) $  18.0 $  16.8 $  15.5 $  14.4 $  12.8 Total resources available (billions) $  21.6 $  20.5 $  19.2 $  17.9 $  16.8 Total reserve against losses on loans to total disbursed loan portfolio 6.9% 7.2% 6.6% 6.6% 7.4% See Management’s Discussion and Analysis and Consolidated Financial Statements for details on the calculation of these numbers: * http://www.ifc.org/ifcext/annualreport.nsf/Content/AR2014_Financial_Reporting IFC OPERATIONAL HIGHLIGHTS 2014 2013 2012 2011 2010 Dollars in millions, for the year ended June 30 New Investment Commitments Number of projects 599 612 576 518 528 Number of countries 98 113 103 102 103 For IFC’s own account $17,261 $18,349 $15,462 $12,186 $12,664 Core Mobilization* Syndicated loans1 $ 3,093 $ 3,098 $ 2,691 $ 4,680 $ 1,986 Structured finance – – – – $   797 IFC initiatives & other $ 1,106 $ 1,696 $ 1,727 $ 1,340 $ 2,358 Asset Management Company (AMC) Funds $   831 $   768 $   437 $   454 $   236 Public-Private Partnerships (PPP) 2 $   113 $   942 $    41 – – Total core mobilization $ 5,142 $ 6,504 $ 4,896 $ 6,474 $ 5,377 Investment Disbursements For IFC’s own account $ 8,904 $ 9,971 $ 7,981 $ 6,715 $ 6,793 Syndicated loans3 $ 2,190 $ 2,142 $ 2,587 $ 2,029 $ 2,855 Committed Portfolio Number of firms 2,011 1,948 1,825 1,737 1,656 For IFC’s own account $51,735 $49,617 $45,279 $42,828 $38,864 Syndicated loans 4 $15,258 $13,633 $11,166 $12,387 $  9,302 Advisory Services Advisory Services program expenditures $   234 $   232 $  197.0 $  181.7 $  166.4 Share of program in IDA countries 5 66% 65% 65% 64% 62% *Financing from entities other than IFC that becomes available to client due to IFC’s direct involvement in raising resources. 1. Includes B-Loans, Parallel Loans, MCPP Loans, and A-Loan Participation Sales (ALPS). 2. Third-party financing made available for public-private-partnership projects due to IFC’s mandated lead advisor role to national, local, or other government entity. 3. Includes B-Loans, Agented Parallel Loans & MCPP Loans. 4. Includes B-Loans, A-Loan Participation Sales (ALPS), Agented Parallel Loans, Unfunded Risk Participations (URPs) & MCPP Loans. 5. All references in this report to percentages of advisory program expenditures in IDA countries and fragile and conflict-affected areas exclude global projects. 25 IFC Annual Report 2014 IFC’S GLOBAL IMPACT LATIN AMERICA & THE CARIBBEAN  $5.1 Billion IFC provided a record amount of financing for private sector development in the world’s poorest countries — ​ nearly $8.5 billion in all, including funds mobilized from other investors. These countries accounted for half of the nearly 600 projects we began during the year. IFC Annual Report 2014 26 EUROPE & CENTRAL ASIA.  $4.2 Billion  EAST ASIA & THE PACIFIC.  $4.2 Billion  MIDDLE EAST & NORTH AFRICA.  $2.2 Billion  SOUTH ASIA.  $1.9 Billion  SUB-SAHARAN AFRICA.  $4.6 Billion  $ 22 BILLION in total investments, including $17.3 billion for our own account 27 IFC Annual Report 2014 FY14 COMMITMENTS BY FY14 COMMITMENTS ENVIRONMENTAL AND SOCIAL Dollar amounts in millions, for IFC’s own account as of June 30, 2014 CATEGORY Total $17,261 100.00% By Industry Category Commitments No. of Trade Finance $  7,007 40.60% ($ millions) Projects Financial Markets $  3,454 20.01% A $ 1,668 23 Infrastructure $  2,426 14.06% B $ 4,328 160 Agribusiness & Forestry $  1,051 6.09% C $ 7,162 268 Manufacturing $    984 5.70% FI $    201 12 Consumer & Social Services $    928 5.37% FI-1 $    682 13 Telecommunications & FI-2 $ 2,049 85 Information Technology $    489 2.83% FI-3 $ 1,171 38 Funds $    480 2.78% Total $17,261 599 Oil, Gas & Mining $    441 2.56% FY14 LARGEST COUNTRY By Region EXPOSURES 1 Latin America and the Caribbean $  4,057 23.50% June 30, 2014 Sub-Saharan Africa $  3,540 20.50% (Based on IFC’s account) Europe and Central Asia $  3,478 20.15% East Asia and the Pacific $  2,771 16.05% Global Committed % of Middle East and North Africa $  1,698 9.84% Rank Portfolio Global South Asia $  1,558 9.03% Country ($ millions) Portfolio Global $    158 0.92% 1 India $4,682 9.05% Some amounts include regional shares of investments that are officially classified as global projects. 2 Turkey $3,215 6.21% 3 China $3,116 6.02% By Product 4 Brazil $2,811 5.43% Loans1 $  7,579 44.00% 5 Russian Guarantees2 $  7,328 42.40% Federation $2,055 3.97% Equity 3 $  2,324 13.40% 6 Mexico $1,556 3.01% Risk management products $     30 0.20% 7 Nigeria $1,527 2.95% 1. Includes loan-type, quasi-loan products. 8 Ukraine $1,034 2.00% 2. Includes trade finance. 9 Indonesia $1,019 1.97% 3. Includes equity-type, quasi-equity products. 10 Egypt, Arab 1.  977 Republic of $     1.89% E xcludes individual country shares of regional FY14 COMMITTED PORTFOLIO and global projects. Dollar amounts in millions, for IFC’s own account as of June 30, 2014 Total $51,735 100% By Industry Financial Markets $14,994 29% Infrastructure $10,192 20% Manufacturing $  6,411 12% Agribusiness & Forestry $  4,345 8% Consumer & Social Services $  4,199 8% Funds $  3,862 7% Trade Finance $  3,166 6% Oil, Gas & Mining $  2,559 5% Telecommunications & Information Technology $  2,007 4% Other – 0% By Region Latin America and the Caribbean $11,645 23% Europe and Central Asia $11,041 21% Sub-Saharan Africa $  8,540 17% East Asia and the Pacific $  8,023 16% Middle East and North Africa $  5,801 11% South Asia $  5,782 11% Global $    902 2% Amounts include regional shares of investments that are officially classified as global projects. IFC Annual Report 2014 28 FY14 INVESTMENT SERVICES DOTS SCORE BY INDUSTRY IFC Total 833 (30,042) 64% Funds 97 (1,470) 72% Oil, Gas & Mining 32 (2,125) 69% Financial Markets 254 (11,047) 68% Infrastructure 128 (5,698) 66% Agribusiness & Forestry 83 (2,425) 61% Consumer & Social Services 107 (2,188) 57% Manufacturing 96 (3,969) 55% Telecommunications & Information Technology 36 (1,119) 42% Numbers at the left end of each bar are the total number of companies rated. Numbers in parentheses represent total IFC investment ($ millions) in those projects. FY14 INVESTMENT SERVICES DOTS SCORE BY REGION IFC Total 833 (30,042) 64% Latin America and the Caribbean 174 (6,549) 67% South Asia 103 (3,317) 66% Sub-Saharan Africa 160 (3,790) 64% Middle East and North Africa 91 (3,569) 62% East Asia and the Pacific 115 (4,450) 61% Europe and Central Asia 176 (7,949) 61% Numbers at the left end of each bar are the total number of companies rated. Numbers in parentheses represent total IFC investment ($ millions) in those projects. FY14 ADVISORY SERVICES PROGRAM EXPENDITURES Dollar amounts in millions Total $233.7 100.0% By Region Sub-Saharan Africa $  63.2 27% East Asia and the Pacific $  41.6 18% Europe and Central Asia $  38.8 17% South Asia $  31.5 13% Latin America and the Caribbean $  24.8 11% Middle East and North Africa $  21.8 9% Global $ 11.9 5% By Business Line Investment Climate $  69.3 30% Access to Finance $  68.0 29% Sustainable Business $  58.6 25% Public-Private Partnerships $  37.8 16% WEIGHTED AND UNWEIGHTED INVESTMENT SERVICES DOTS SCORES FY14 833 64% $30,042 73% FY13 716 66% $29,674 73% FY12 668 68% $26,610 75% Unweighted Weighted Numbers at the left end of each bar for unweighted DOTS score are the total number of companies rated. Numbers at the left end of each bar for weighted DOTS score represent total IFC investment ($ millions) in those projects. 29 IFC Annual Report 2014 LEVERAGING THE POWER OF THE PRIVATE SECTOR In a time of significant economic uncertainty, we are focusing our efforts wherever we can achieve the greatest impact — ​wherever the poor are located, in the most crucial economic sectors, and in thematic areas of pressing importance such as jobs, gender, and climate change. 32– 39 CREATING OPPORTUNITY IFC concentrates on the economic sectors with the greatest potential to end poverty and boost shared prosperity. IFC Annual Report 2014 30 40– 46– 52– 45 51 57 EXPANDING RESOURCES TACKLING THE BIGGEST CHALLENGES IMPROVING LIVES FOR DEVELOPMENT IFC is addressing some of the IFC’s work helps improve the IFC works with private sector clients most urgent development lives of the poor wherever they are and partners to bring together challenges. We are focusing our located—and wherever the resources, expertise, and ideas to work on creating better jobs, incidence of poverty is greatest. achieve the greatest impact on reducing the gender gap, and poverty reduction. helping countries mitigate and adapt to climate change. 31 IFC Annual Report 2014 CREATING OPPORTUNITY: INFRASTRUCTURE ESTABLISHING A ROBUST We are supporting investments to add 1,500 megawatts of power to Nigeria’s FOUNDATION FOR PROSPERITY national grid — ​providing electricity to up to 8 million households by 2015. Working with Businesses cannot succeed without reliable other World Bank Group institutions, IFC power, roads, or modern means of transpor- is structuring projects to attract commercial tation to get their goods to market. Without financing and providing risk-mitigation clean water and sanitation, lives are imperiled. instruments to help develop power genera- The absence of modern infrastructure is tion, distribution, and gas supply to power a major obstacle to ending poverty in devel- plants in the country. oping countries. More than $800 billion is As Africa becomes one of the world’s invested in infrastructure in these countries main areas for new power capacity, we con- every year, but that’s less than half of what tinue to encourage the development of is necessary. Just achieving universal access renewable-​ energy sources on the continent. to electricity would require an additional We are investing in Tanzania’s first indepen- annual investment of $38 billion globally. dent wind-energy project, expected to add Helping to deliver infrastructure is a 100 MW to the country’s power capacity. priority for IFC. We work with the private The Singida plant will help reduce the need sector to develop landmark projects that aim for costly fuel imports. to ease growth constraints, respond to IFC invests in a wide variety of infra- urbanization pressures, and meet countries’ structure projects. In Colombia, IFC and two sustainability goals. To maximize results, funds managed by IFC Asset Management we often work closely with the World Bank, Company are investing $150 million in other international financial institutions, Pacific Infrastructure Ventures to support an and a broad range of donors and clients. increase in oil and gas exports. The invest- In FY14, we provided $4.1 billion in ments will help develop Puerto Bahía, a new financing for core infrastructure projects, terminal on the bay of Cartagena, and Olecar, including funds mobilized from other inves- a 130-kilometer crude-oil pipeline that will tors. Much of our investments were in Africa, connect Puerto Bahía’s facilities to Colombia’s where the need is acute. Only one-fourth main export terminal for crude oil. of the continent’s population has access to electricity, and only about 60 percent has access to clean water. IFC Annual Report 2014 32 94 MILLION customers received power, water, and gas through our clients in 2013 In Nigeria, IFC is supporting investments to add 1,500 megawatts of power to the national grid. 33 IFC Annual Report 2014 CREATING OPPORTUNITY: ACCESS TO FINANCE RAISING INCOMES AND CREATING WEALTH Baba Sahib lost his right leg in a bomb blast shortly after he joined the police force in Kabul. He returned to his hometown, in a rural area of Afghanistan, and tried to make a living selling candy and cold drinks. But the income wasn’t enough to send his six children to school. He needed capital to get his business off the ground. Yet he had never had a bank account. He didn’t even know how to apply for a loan — ​until an IFC client, Finca, came to his assistance. Finca, one of the world’s larg- est microfinance institutions, gave him a loan that enabled him to quickly build a profitable grocery-store business. Access to finance is critical for fighting poverty and boosting prosperity. It helps El Salvadoran micro entrepreneurs are gaining greater access to finance because of our investment in Fedecredito. people and businesses build assets, increase income, and reduce their vulnerability to economic stress. Yet, about 2.5 billion adults still lack essential financial services, and 200 million small and medium businesses struggle to obtain the credit they need to succeed. IFC works with a network of nearly 1,000 financial institutions and private equity funds to increase the availability and afford- ability of financial services, supporting far more individuals and small businesses than we would be able to on our own. In 2013, our $ 300 BILLION in loans to micro, small, and medium enterprises was ­ provided by our clients in 2013 IFC Annual Report 2014 34 financial-intermediary clients provided more than $300 billion in loans to micro, small, and medium enterprises. Our advice helped our clients strengthen their capacity to provide key financial services to individuals and businesses. Our relationship with Finca exemplifies our work. After investing in the organization, we helped it create a new subsidiary that will allow the company to double its clients to 1.5 million — ​reaching borrowers in the poor- est and most remote regions in the 22 countries where Finca operates. IFC also supports financial cooperatives, which have proved highly successful in reach- ing underserved communities. Our 2010 investment in Fedecredito, in El Salvador, was the first funding program backed by remittances of citizens working abroad. As of 2013, it had resulted in 142,000 loans to micro entrepreneurs and low-income people — ​ an increase of 25 percent in the number of loans provided by the cooperative. We work to modernize financial systems. In Ghana, we helped create a collateral registry program — ​ Saharan the first of its kind in Sub-​ that enabled borrowers to use mov- Africa — ​ able assets such as equipment or inventory as collateral for loans. The project has helped generate financing for micro, small, and medium enterprises, and other beneficiaries. A loan provided by IFC’s client Finca helped Baba Sahib’s business take off. 35 IFC Annual Report 2014 27 MILLION patients received health care through our clients in 2013 IFC Annual Report 2014 36 CREATING OPPORTUNITY: HEALTH AND EDUCATION BUILDING HUMAN CAPITAL innovative and affordable means of financing and by improving standards of quality and Twelve-year-old Diana Kemunto dreams efficiency. In the education sector, IFC helps of being a doctor when she grows up. But the schools strengthen skills that meet the needs path to a career in medicine is especially of employers. arduous for a child whose starting point is a In Nairobi, Diana is benefiting from our Nairobi slum — ​ where schoolteachers can $10 million investment in Bridge Interna­ be absent a third of the time and otherwise tional Academies, which has created a new teach an average of just three-and-a-half model for delivering education to children hours a day. from poor families. She’s a student at a Bridge This reality extends well beyond Diana’s school, where teachers use computer tablets neighborhood. In many developing countries, to deliver scripted lessons and carefully track up to half of students who have completed student and teacher performance. Bridge elementary school cannot read a single plans to reach 10 million students in East sentence, and a third cannot do basic math Africa and India over the next decade. because of the poor education they receive. IFC also supports new technologies More than 60 million children of primary-​ and applications that have the potential to school age do not receive any education at all. broaden access to education. Our client Without human capital — ​ w ithout the Coursera, for example, works with more than talent and drive of people in developing 100 top universities and educational institu- At a Bridge school in Kenya, teachers use computer tablets to deliver lessons. countries — ​poverty cannot be ended and tions to offer about 700 free online college-​ prosperity cannot be sustained. IFC believes level courses to more than 8 million students the private sector has an important role to around the world. Our $5 million investment play in this arena, complementing the efforts in Coursera in 2013 is expected to help the of governments. We provide finance and company expand its operations and reach advice that helps the private sector deliver more students in developing countries. high-quality education and health care, In FY14, IFC invested $139 million for giving people in poorer countries a shot at our own account in the education sector, reaching their full productive potential. and an additional $173 million in the health In both areas, our aim is to expand access sector. Our clients helped educate more than to high-quality services for lower- and middle-​ 2.5 million students and treated more than income people. We do that by introducing 27 million patients in 2013. 37 IFC Annual Report 2014 CREATING OPPORTUNITY: AGRIBUSINESS STRENGTHENING FOOD SECURITY by It’s a bleak statistic for a hungry planet — ​ 2050, more than 9 billion people will inhabit the earth. That’s 219,000 more people every day who must be fed amid a growing scarcity of land, water, and energy resources. For those working in agriculture, the challenges have never been greater. Natural resources are being strained. To keep up with rising demand, food production needs to double, and annual investments in food production need to expand by half. These challenges may seem intractable — ​ but businesses across the world are already developing innovative solutions. IFC is working with the private sector to increase the supply of affordable food and ensure it is available to people who need it most. Our work gives farmers better access to About 35,000 farmers in Honduras have benefited from new rules that made agrochemicals more affordable. finance and opens up new markets for them. It helps them raise productivity, adopt sus- tainable methods of production, and reduce waste. We provide training and develop products that protect farmers from unfore- seen risks. We are stepping up our work in Africa, where the agricultural sector accounts for 70 percent of employment. Our investment and advice this year to Ethiopia-based africa- JUICE — ​ the first Fairtrade-certified juice producer in Sub-Saharan Africa — ​ w ill help the company triple its fruit-processing 2.9 MILLION farmers were supported by IFC clients in 2013 IFC Annual Report 2014 38 An IFC investment is helping the Solomon Islands’ only tuna-​ canning processor expand and create jobs. capacity, doubling its employees to 3,000 and increasing its supplier base from 70 small- holder farmers to 1,000. We aim to increase productivity by expanding farmers’ access to key agricultural inputs. In Nigeria, where average crop yields are low because of farmers’ limited purchas- ing power and outdated farming techniques, IFC is investing $6 million in Saro Agro­ Sciences, a leading distributor of herbicides and insecticides. The company will expand its distribution network from 82 to 300 out- lets across the country, increasing access to agrochemicals for more than 500,000 small- holder farmers by 2016. In Central America, we helped the gov- ernment of Honduras implement transparent and nondiscriminatory rules for registering new pesticides and fertilizers. The new rules have boosted competition among suppliers, benefiting about 35,000 farmers that now quality, have access to a wider variety of higher-​ lower-​priced agrochemicals. In the Pacific, we are helping the Solomon Islands retain a greater share of the revenue from the country’s tuna catch — ​ which currently benefits mainly foreign companies. We are supporting the expansion of SolTuna, the country’s only tuna-canning processor, with a $10 million loan and advice. The expansion will result in 500 jobs over the next five years. 39 IFC Annual Report 2014 EXPANDING RESOURCES FOR DEVELOPMENT: LOCAL CAPITAL MARKETS PROMOTING ECONOMIC RESILIENCE This year, we became the first interna- tional development institution to issue — ​on Developing countries stand a better chance the London Stock Exchange — ​ a bond denom- of achieving sustained prosperity when inated in Chinese renminbi. We issued they’re able to raise funds freely — ​ at home 2 billion yuan, or about $325 million, making and abroad — ​ in their own currency. ours the first benchmark-sized bond by a That privilege still eludes even the largest multilateral institution on the exchange. We of them. China’s currency, for example, followed that with the first renminbi-denom- accounts for barely 2 percent of trading in inated green bond listed in London, raising foreign-exchange markets. India’s share is 500 million yuan for climate-friendly invest- smaller still. The need to borrow in foreign ments. We also became the first foreign currencies exposes businesses in such coun- institution to issue a local-currency bond in tries to unnecessary risks, and it can leave Rwanda, strengthening the country’s ability entire economies vulnerable to sudden to attract investors from Africa and beyond. swings in capital flows. We provided the first partial credit IFC works to reduce those dangers — ​ by ­ guarantee for an Indonesian corporate bond making it easier for developing countries to issuance, enabling one of the country’s top tap domestic resources. We strengthen local housing developers to issue 500 billion in capital markets by issuing local-currency rupiah bonds  about $44 million. Our 20 per- — ​ bonds, paving the way for others to do the cent guarantee helped PT Ciputra Residence same. We also work closely with govern- obtain a high credit rating for the bonds, ments, regulators, and other development attracting pension funds and a variety of institutions to achieve that goal. other institutional investors. The company In 2013, when India suffered a sudden will use proceeds to expand housing, apply- capital flight that caused its currency to ing IFC’s green-building standards. plummet, we issued our first rupee-denomi- In all, IFC has issued bonds in 15  nated bond to help restore the flow of capital. emerging-market currencies. In addition, In all, we issued the equivalent of $1 billion we have provided more than $12 billion in under our offshore global rupee bond program. local-currency financing across 60 curren- Investors from the United States, Europe, through loans, swaps, guarantees, cies — ​ and Latin America were big purchasers, risk-sharing facilities, and other structured highlighting fundamental investor confi- and securitized products. dence in the Indian economy. We now plan to expand the issuance to $2 billion. IFC Annual Report 2014 40 $ 12 BILLION in local-currency financing has been provided by IFC Pedestrians walk by the Stock Exchange building in Mumbai. IFC’s rupee-denominated bond highlighted investors’ confidence in India. 41 IFC Annual Report 2014 EXPANDING RESOURCES FOR DEVELOPMENT: PUBLIC-PRIVATE PARTNERSHIPS IMPROVING ESSENTIAL SERVICES THROUGH PARTNERSHIPS The needs of developing countries are vast — ​ it will cost about $2 trillion a year to modernize infrastructure, at least $100 bil- lion a year to tackle climate change, and hundreds of billions more to lift people out of extreme poverty. Such costs far exceed the available IFC also invests in PPP projects. In resources of individual governments or insti- Jordan, we supported the country’s first tutions. But public-private partnerships can large-scale wind farm by helping EP Global make a significant difference. They can unlock Energy structure the project agreements, much more than money — ​ they can also bring assisting in negotiations with the govern- in expertise and efficiency, helping ensure that ment and mobilizing $221 million in resources are wisely allocated in addressing financing for the project. The Tafila wind the most urgent challenges of development. farm is expected to start operating in IFC is the only multilateral organization 2015 and will provide energy to the grid at offering direct advice to governments on how lower cost. It will also curb greenhouse to structure public-private partnerships. We emissions and reduce Jordan’s dependence have worked on more than 300 PPP transac- on imported oil. tions worldwide — ​ many in challenging In Croatia, we invested about $74 million regions or countries that have difficulty in in a private consortium that will expand and attracting investors. operate Zagreb International Airport. The As of June 2014, we had an active port­ country’s first airport concession is expected folio of 118 PPP advisory projects in more than to help make the capital city an important 50 countries, valued at about $152 million. European transportation hub and boost We helped governments sign 10 PPP contracts, tourism — ​ a major driver of job creation and including six in IDA countries. These partner- economic growth. It is also expected to set ships are expected to improve access to an example, encouraging other PPP projects infra­structure and health services for over in the country. 1.6 million people and mobilize $306 million Our work is not restricted to national in private investment. governments. In Odisha, one of India’s poor- est states, we helped the municipality of 300 Bhubaneswar design, structure, and manage the bid process for a new street-lighting project. The city’s inefficient street lighting was replaced by an improved system that is saving the local government $100,000 a year. PPP TRANSACTIONS worldwide have been supported by IFC IFC Annual Report 2014 42 Workers build a terminal at Zagreb International Airport. The project will support Croatia’s infrastructure and tourism. 43 IFC Annual Report 2014 EXPANDING RESOURCES FOR DEVELOPMENT: MOBILIZATION LEVERAGING THE RESOURCES OF OTHER INVESTORS IFC’s track record of investing successfully in markets neglected by traditional investors comes with an important benefit: it embold- ens others to follow our lead. We use that power to maximize our impact in developing countries, getting other investors to join us in creating oppor- tunity. This enables IFC to deploy capital on a larger scale than we could with just our own resources. For our partners, it ensures healthy returns and mitigates risks. For our clients, it establishes a connection with new investors, paving the way for relationships that can secure the flow of much-needed financing and expertise. We have a distinguished history of intro- ducing innovative ways for other investors to work in tandem with us. Our syndicated loan program — ​launched in 1957 — ​is the largest among those of international development institutions, having mobilized more than $43 billion from other investors over the years. IFC Asset Management Company, a wholly owned subsidiary launched in 2009, today manages more than $6 billion in assets on behalf of a wide variety of institutional inves- tors such as pension funds and sovereign funds. Last year, China — ​an increasingly important player in developing countries — ​ became the first investor in IFC’s newly launched Managed Co-Lending Portfolio Program, pledging $3 billion for investment in new IFC projects. Under the program, China largely delegates to IFC the authority $ 3.1 BILLION in syndicated loans was issued by IFC in FY14 IFC Annual Report 2014 44 necessary for loan origination, structuring, and portfolio management. In FY14, IFC In Africa, we have helped modernize telecommunications by mobilizing significant resources from other investors. committed $320 million under the program. In mobilizing funds for development, we strive to expand our base of co-investors — ​ especially other international financial institutions and banks in emerging markets. We developed a Master Cooperation Agreement to specify how international development institutions can work together — ​ through syndicated loans — ​ to cofinance projects led by IFC. Under that agreement, 21 development institutions now work with us — ​a number that continues to grow. These institutions have provided $2.2 billion to IFC clients since 2009. IFC Asset Management Company, mean- while, has raised a significant pool of capital for investment in IFC projects. In FY14, it completed fund-raising for the IFC Global Infrastructure Fund, raising $1.2 billion in all. In one of its first investments, the fund provided $75 million to IHS Holdings, an IFC client that is Africa’s largest operator of independent telecommunications towers. The investment will help the company expand access to wireless phone services in remote and rural areas of Africa. 45 IFC Annual Report 2014 TACKLING THE BIGGEST CHALLENGES: EMPLOYMENT CREATING JOBS — ​THE CORNERSTONE loans to micro, small, and medium enter- prises, which in turn employed more than OF DEVELOPMENT 100 million people. IFC is now coordinating a global coali- The scarcity of jobs is one of the most press- tion of international finance institutions and ing issues of our time. For more than a billion donors — ​k nown as the Let’s Work partner- people in developing countries, jobs consti- ship — ​that aims to develop coordinated tute the main path out of poverty — ​ raising solutions to the challenges of job creation in living standards, increasing productivity, different countries and industry sectors. and fostering social cohesion. In addition, IFC leads a private sector partner- But global unemployment has been on ship consisting of 15 large companies that the rise. In 2013, there were more than are working to increase job opportunities 200 million job seekers globally — ​ most of for women. them women and young people in developing We also launched a program to improve countries. If current trends persist, global working conditions for hundreds of thou- unemployment is set to widen further, reach- sands of workers in the garment industry in ing more than 215 million people by 2018. Bangladesh — ​which gained international The private sector, which accounts for attention in 2013 after the collapse of a build- nine out of every 10 jobs in developing coun- ing and several fire incidents. Through the tries, has a critical role to play. IFC is working Better Work program with the International with clients and partners to help private Labour Organization, we are providing assess- Through the Better Work program, IFC is helping improve working conditions in Bangladesh’s garment industry. enterprises overcome the largest obstacles to ments of factory compliance with national job creation — ​by expanding access to finance, laws and international labor standards. supporting investments in infrastructure, IFC has developed an integrated improving the investment climate, and boost- investment and advisory program to help ing education and training. transform the country’s garment sector — ​ In 2013, our investment clients directly which accounts for 20 percent of the country’s supported 2.6 million jobs. Our research has GDP and employs 4.2 million people. The shown that every job directly provided by our program includes $500 million to expand clients indirectly supports as many as 20 financing for exporters. It also aims to additional jobs across supply and distribution improve building and fire-safety standards. chains. IFC also supported financial institu- tions that provided more than $300 billion in IFC Annual Report 2014 46 2.6 MILLION jobs were supported by our invest- ment clients in 2013 47 IFC Annual Report 2014 TACKLING THE BIGGEST CHALLENGES: CLIMATE CHANGE TURNING RISKS INTO OPPORTUNITY offset about 185,000 tons of carbon dioxide annually — ​roughly the equivalent of taking Climate change is much more than an envi- 39,000 cars off the road. ronmental challenge — ​ it’s a fundamental IFC also is one of the largest issuers of threat to global prosperity, with a dispropor- green bonds. In 2013, we completed two tionate effect on the poorest countries. green-bond issuances — ​ each for $1 billion — ​ Within decades, global temperatures to raise funds for climate-friendly projects. are likely to exceed preindustrial levels by The scale and success of the issuance is 2 degrees Celsius. That would intensify food prompting other investors and corporate shortages in Sub-Saharan Africa, increase bond issuers to enter this important flooding in coastal areas of Southeast Asia, new market. and trigger shifts in rain patterns that Through our Sustainable Energy Finance inundate some areas of South Asia while program, we are helping commercial banks depriving others of the water needed for identify and develop climate-smart projects in power generation and agriculture. their pipelines. The program in the Philippines IFC is at the forefront of the World Bank received an award from the United Nations Group’s efforts to tackle climate change — ​ Climate Change Secretariat for its innovative because we see it as a significant obstacle to approach, which significantly reduced green- ending extreme poverty, and because we house emissions. IFC is replicating the think the private sector is essential in this program across the Middle East, including in struggle. Since 2005, we have invested more Lebanon, where banks are increasing lending than $13 billion in climate-related projects, to eco-minded businesses and homeowners. including nearly $2.5 billion in FY14. In Bangladesh, in cooperation with the We are a leading financier of renewable World Bank and other partners, we are work- energy for developing countries. This year, ing to reduce emissions at export-processing IFC supported the construction and expan- zones. We helped develop guidelines that sion of three solar power projects in Chile — ​ are enabling textile and garment companies including Amanecer Solar, expected to to increase energy efficiency while remaining become the largest photovoltaic power plant competitive. Our work has helped attract in Latin America. With a combined capacity $170 million in private investment to improve of about 180 megawatts, the projects will help energy efficiency in these zones. Chile meet its growing energy needs and $ 13BILLION has been invested by IFC in climate-related projects since 2005 IFC Annual Report 2014 48 IFC helps reduce greenhouse emissions in developing countries by expanding financing for renewable-energy projects. 49 IFC Annual Report 2014 TACKLING THE BIGGEST CHALLENGES: GENDER THE TRANSFORMATIVE POWER OF WOMEN Bukky George, the owner of a small pharmacy in Lagos, undertook an ambitious project: build a national chain of drug stores so that Nigerians could enjoy the same access to high-quality medicines that citizens of wealthier countries do. Tapping personal and family savings, she added three new stores within a year. Then she hit a roadblock that women entrepreneurs often face: she needed more capital to con- tinue expanding, and most banks would not lend to new women-owned businesses. Fortunately, there was an exception — ​ Access Bank, a Nigerian lender that had just received an IFC line of credit to increase its lending to women entrepreneurs. George secured the loan she needed. Today, her Vietnamese women farmers are boosting their incomes by learning new skills from IFC client ECOM Coffee. HealthPlus chain has 25 branches, and she plans to establish 17 more in 2014. IFC believes women — ​as consumers, as employees, and as business leaders and entre- preneurs — ​ have the power to transform the global economy, supporting job creation, raising per-capita incomes, and promoting sustainable development. That is why we work to promote gender inclusion in all of our activities. That’s why we set up a dedicated Gender Secretariat in 2013 — ​ to help our staff and clients see and act upon the strong busi- ness case for gender inclusion. $ 800 MILLION has been invested through our Banking on Women program since 2010 IFC Annual Report 2014 50 By leveraging our relationships with nearly 1,000 financial institutions and private-​ equity funds, we help expand access to finance for women entrepreneurs. Working closely with other World Bank Group institu- tions, we help reduce gender-based barriers in the business environment. We also help our clients improve working conditions for women, strengthen business-skills training for them, and increase the participation of women on their boards. This year, in partnership with the Goldman Sachs 10,000 Women program, we launched a $600 million global facility that will increase access to finance for as many as 100,000 women entrepreneurs in developing countries. IFC will manage the facility, which is expected to mobilize up to an additional $470 million from other investors, and pro- vide advice. The initiative is part of our Banking on Women program, which has made 17 invest- ments totaling more than $800 million since 2010. To help expand that program, we issued our first bond designed specifically to support women entrepreneurs in developing countries, raising $165 million from Japanese investors. In agribusiness, we worked with our client ECOM Coffee to design training for women across East Asia and the Pacific. Previously, women did most of the harvesting work but were often excluded from skills training. By strengthening training, ECOM was able to harvest larger, higher-quality crops at lower cost and raise incomes for its women farmers. Bukky George has turned a few drug stores into a fast-growing pharmacy chain in Nigeria. 51 IFC Annual Report 2014 $ 8.5 BILLION was directed to the world’s poorest countries in FY14, including mobilized funds IFC Annual Report 2014 52 IMPROVING LIVES: IDA AND CONFLICT-AFFECTED AREAS CREATING OPPORTUNITY IN IDA countries, and 20 percent was in fragile and conflict-affected areas. CHALLENGING ENVIRONMENTS Modernizing infrastructure in these areas is a key element of our strategy. In In some parts of the world, poverty is expand- Nepal, where more than one-fourth of the ing rather than receding. population lives below the poverty line and In the poorest countries, the ranks of the power cuts are the norm, we are helping the destitute have swelled by more than 100 mil- country realize its abundant hydropower lion since the early 1980s. Conflict and potential. instability, meanwhile, are exacting a rising Working closely with other World Bank toll, accounting for a growing proportion of Group institutions, IFC is investing about people living on less than $1.25 a day. $1 billion and mobilizing an additional Reversing those trends will take special $4 billion to help the country generate up to effort. Such areas typically lack even the most 3,000 megawatts of power — ​ enough electric- basic means to escape poverty. Government ity for 16 million people, or 60 percent of institutions are often unequipped for the the Nepali population. The project is also challenge. Private enterprise is feeble. Infra­ expected to create jobs in urban areas and structure — ​power, roads, and bridges — ​is boost agricultural productivity. in disrepair. Access to food, water, and medi- In Haiti, where access to piped water is cines is limited. limited and most of the population depends That is why IFC is intensifying our work on unreliable and expensive water delivered Modernizing infrastructure is a key element of our strategy in countries with high poverty rates. in these areas. Since 2005, our investment in by trucks, IFC’s client dloHaiti is innovating. the 82 poorest countries — ​ those eligible to A network of decentralized solar-powered borrow from the World Bank’s International water-purification and distribution centers Development Association — ​ has grown eight- has lowered processing costs and improved fold to a record of nearly $8.5 billion in FY14. water quality for underserved communities. That number included about $1.6 billion dloHaiti plans to set up 300 centers, serving mobilized from other investors. more than 1 million people and creating more In addition, we have directly contributed than 4,000 jobs. more than $2.8 billion to the replenishment We have also helped the Democratic of IDA since 2007. Our annual investments Republic of Congo establish its first Special in fragile and conflict-affected areas have Economic Zone — ​ which is expected to climbed 20 percent over the past two years — ​ attract $80 million in investments and create to nearly $950 million in FY14, including 1,500 direct jobs. IFC helped the country funds IFC mobilized from other investors. draft the new SEZ law. Two-thirds of our advisory program was in 53 IFC Annual Report 2014 IMPROVING LIVES: AFRICA, SOUTH ASIA, AND THE MIDDLE EAST ALLEVIATING POVERTY WHEREVER THE NEED IS GREATEST More than 50 million farmers in India depend on sugarcane cultivation for their livelihood. But many rely on unproductive methods. In Uttar Pradesh, one of India’s poorest states, yields are about half those of We focus on regions where the need to the most productive states. That means alleviate poverty is greatest. In Sub-Saharan farmers earn less than they could. Africa, where countries exhibit some of the IFC’s project Meetha Sona — ​ Hindi for highest rates of extreme poverty, IFC is “sweet gold” — ​is changing this reality. working to reduce the infrastructure deficit, ­ Through a partnership with sugar producer address the rising demand for food, and DSCL, the program is providing training expand access to finance. materials and a customized package of climate-​ Our $37.4 million partnership with smart agricultural practices. Trained farmers The MasterCard Foundation is expected to have reported an 86 percent increase in pro- provide access to financial services for ductivity in the first two years of the program. 5.3 million people by 2017. In addition, IFC Having trained more than 17,000 farmers, Capitalization Fund — ​ which is managed by the program is being rolled out more broadly — ​ IFC Asset Management Company — ​ invested with a target of reaching 200,000 farmers $172.2 million in FirstRand Bank, an IFC across 14 mills in India by 2015. client, to help it increase loans to small and Improving lives in places like Uttar medium enterprises and retail customers Pradesh is essential if we are to achieve our across the region. goals of ending extreme poverty by 2030 In the Middle East and North Africa, and boosting shared prosperity. South Asia where pronounced inequality threatens social as a whole is home to more than 40 percent stability, we are working to support education of the global population living below $1.25 a and training, develop climate-smart proj- day — ​despite the region’s robust growth in ects, and improve infrastructure services. recent years. We invested $50 million to help Alliances Group, a leading Moroccan construction company, build 110,000 affordable housing units — ​reducing the current deficit of about 840,000 homes in the country. 6.8 In all, we invested about $6.8 billion $ from our own account in these regions in FY14 — ​ nearly 40 percent of our overall commitments for the year. About half of our advisory program was in these regions. BILLION Our activities helped support more was invested in than 381,000 jobs in South Asia, more than Sub-Saharan Africa, 227,000 in Sub-Saharan Africa, and more South Asia, and than 174,000 in the Middle East and North the Middle East and Africa. They also helped our clients educate North Africa more than 44,000 students in South Asia, in FY14 distribute water to 1.8 million customers in the Middle East, and treat about 941,000 patients in Sub-Saharan Africa. IFC Annual Report 2014 54 In India, IFC is working to improve farmers’ productivity by training them in advanced agricultural techniques. 55 IFC Annual Report 2014 IMPROVING LIVES: MIDDLE-INCOME COUNTRIES BUILDING BROAD-BASED Alimentos, a leading poultry and pork pro- ducer, is expected to help support about PROSPERITY 5,000 jobs, promote rural development, and increase the availability of food for up to Middle-income countries are vital engines of 3.5 million people over the next three years. global prosperity, accounting for one-third We are also helping Turkey address the of the world’s economic output. Yet they are challenge of urbanization. We arranged home to three out of every four people living a financing package of €165 million to help on less than $1.25 a day. build tram lines in Izmir, a city of nearly For all their economic progress, these 4 million people on the country’s Aegean countries still face major development hur- coast. The project is expected to help reduce dles. Large parts remain rural and remote, congestion by strengthening the public untouched by the benefits of national economic transportation system in a climate-smart way. growth. Other parts — ​urban centers — ​struggle We provide strong support to companies to modernize their infrastructure as people that adopt inclusive business models. IFC migrate in, hoping for a better life. Such is the leading multilateral investor in such countries also have to grapple with the risks companies, which focus on low-income of climate change. people — ​as consumers, retailers, suppliers, or IFC works closely with the private sector distributors. In FY14 alone, IFC committed in these countries — ​to ensure that the rewards over $1.6 billion to 84 inclusive businesses — ​ of progress are shared by all citizens, and to many of them in middle-income countries. enable local businesses to do more to address We also support regional integration regional and global development challenges. and South-South investment — ​ by encourag- We focus on frontier regions — ​ places where ing businesses in middle-income countries poverty is high — ​and businesses that serve to invest in other developing countries. This neglected segments of the population such as year, for example, we helped assemble a women, youth, and small farmers. consortium of investors — ​ including Bank of In Brazil, for example, we provided China — ​that provided $30 million in financ- about $20 million in financing this year to ing to expand the availability of clean water help reopen and expand production at a and improve wastewater treatment plants in poultry plant in Tocantins, one of the coun- the Middle East. try’s poorest states. Our investment in Asa IFC Annual Report 2014 56 $ 1.6BILLION was committed to inclusive businesses in FY14, many of them in middle- income countries IFC is helping the Turkish city of Izmir improve public transportation in a climate-smart way. 57 IFC Annual Report 2014 pg. MEASURING UP 59 Our Strategic Focus Areas 60 Scorecard Summary 61 Creating Opportunity Where It’s Needed Most 62 pg. OUR EXPERTISE 64 Where We Work 65 What We Do 66 Our Industry Expertise 70 pg. 72 OUR PEOPLE & PRACTICES The IFC Way 73 How We Measure Development Results 74 Our Staff 82 Our Governance 84 Accountability 86 Partnerships 88 Managing Risks 90 Working Responsibly 92 Independent Assurance Report on a Selection of Sustainable Development Information 95 Financial Summary 100 IFC Annual Report 2014 58 MEASURING UP IFC strives to deliver what cannot be obtained elsewhere. We offer clients a unique combination of investment and advice designed to promote sustainable private sector development in emerging markets. We call that special edge our “additionality.” Using it to maximize our develop­ - ment impact is a cornerstone of our strategy. 59 IFC Annual Report 2014 OUR STRATEGIC FOCUS AREAS Our activities are guided by five strategic priorities that allow us to help where we are most needed and where our assistance can do the most good. STRENGTHENING THE FOCUS ON FRONTIER MARKETS IDA countries, fragile and conflict situations, and frontier regions of middle-income countries ADDRESSING CLIMATE CHANGE AND ENSURING ENVIRONMENTAL AND SOCIAL SUSTAINABILITY Developing new business models and financing instruments, setting and raising standards ADDRESSING CONSTRAINTS TO PRIVATE SECTOR GROWTH IN INFRASTRUCTURE, HEALTH, EDUCATION, AND THE FOOD-SUPPLY CHAIN Increasing access to basic services and strengthening the agribusiness value chain DEVELOPING LOCAL FINANCIAL MARKETS Building institutions, mobilizing resources, and introducing innovative financial products BUILDING LONG-TERM CLIENT RELATIONSHIPS IN EMERGING MARKETS Using the full range of our products and services to guide clients’ development and assist cross-border growth IFC Annual Report 2014 60 SCORECARD SUMMARY IFC’s Performance on Strategic Focus Areas Performance FY14 FY13 DEVELOPMENT RESULTS Investment Companies Rated High (DOTS Score)1 64% 66% Advisory Projects Rated High2 76% 76% Focus Areas FRONTIER MARKETS IDA: Number of Investment Projects 288 288 IDA: Commitments (millions) $  6,880 $  6,649 IDA: Share of Advisory Services Program in IDA Countries, %3 66% 65% Fragile and Conflict Situations: Number of Investment Projects 47 44 Fragile and Conflict Situations: Share of Advisory Services Program, % 20% 18% Frontier Regions: Number of Investment Projects 47 59 Commitments in Sub-Saharan Africa (millions) $  3,540 $  3,501 Commitments in Middle East and North Africa (millions) $  1,698 $  2,038 Commitments in South Asia, Afghanistan and Pakistan (millions) $  1,988 $  1,697 LONG-TERM CLIENT RELATIONSHIPS INCLUDING SOUTH-SOUTH Number of South-South Investment Projects 38 47 Commitments in South-South Investment Projects (millions) $  1,455 $  1,674 CLIMATE CHANGE, ENVIRONMENTAL AND SOCIAL SUSTAINABILITY Climate-related investments (millions)4 $ 2,479 $ 2,509 INFRASTRUCTURE, HEALTH, EDUCATION, FOOD-SUPPLY CHAIN Commitments in Infrastructure, Health and Education, and Agribusiness and Food-Supply Chain (millions)5 $ 7,205 $ 6,934 LOCAL FINANCIAL MARKETS Commitments in Financial Markets (millions)6 $10,461 $10,124 Commitments in Micro, Small and Medium Enterprises (millions)7 $ 6,248 $ 7,192 Notes: 1. DOTS scores: percentage of client companies with high development outcome ratings as of June 30 of the respective year, based on projects approved over a rolling six-year period (FY14 ratings are based on approvals from 2005–2010). 2. For Advisory Services, development effectiveness ratings are for calendar years 2013 and 2012. 3. FY13 and FY14 figures reflect improved methodology for measuring Advisory Services expenditures in IDA countries, incorporating regional projects. 4. Climate-related is an attribute of a project involving Climate Mitigation, Climate Adaptation and/or Special Climate activities. For more details on these terms and activities, please visit http://www.ifc.org/climatemetrics. 5. Commitments in Infrastructure (excluding Oil, Gas and Mining), Communications & Information Technologies, Subnational Finance, Health & Education, and Agribusiness & Food Supply Chain. 6. Commitments of IFC’s Financial Markets excluding Investment Funds and Private Equity. 7. Includes direct MSME borrowers, financial institutions with more than 50% of their business clients being MSMEs, and any other investments that specifically target MSMEs as primary beneficiaries. 61 IFC Annual Report 2014 CREATING OPPORTUNITY WHERE IT’S NEEDED MOST EAST ASIA & THE PACIFIC $106 Billion in loans made to micro, small, and medium enterprises — 37.1 Million customers supplied with gas — 230,000 noncash retail transactions facilitated, totaling $16 million MIDDLE EAST & NORTH AFRICA 28.3 Million phone connections provided — $1.8 Billion in goods and services purchased from domestic suppliers — 840,000 people expected to receive improved waste-management services through public-private partnerships IFC Annual Report 2014 62 IFC and our clients make a wide range of contributions in developing countries. Our clients’ success can have ripple effects across an economy, giving many people — ​ including the poor — ​a chance to better their lives. EUROPE & CENTRAL ASIA LATIN AMERICA & THE CARIBBEAN 2.7 Million 7.5 Million patients cared for customers supplied with water — — 435,000 12.7 Million jobs provided loans made to micro, small, and medium enterprises — — $340 Million $15 Million in new financing provided for firms with improved in new investments attributable to industry reform corporate governance practices and investment-promotion work with governments SOUTH ASIA SUB-SAHARAN AFRICA 130.6 Million 21.3 Million phone connections provided customers supplied with power — (generation+ distribution) 15.5 Million — patients cared for 1.1 Million — farmers reached 6.7 Million — loans made to micro, small, and medium enterprises $7.7 Billion in financing secured with moveable property 63 IFC Annual Report 2014 OUR EXPERTISE IFC blends investment with advice and resource mobilization to help the private sector advance development. IFC Annual Report 2014 64 WHERE WE WORK As the largest global development institution focused on the private sector, IFC operates in more than 100 countries. We apply lessons learned in one region to solve problems in another. We help local companies make better use of their own knowledge, by matching it to opportunities in other developing countries. OUR OFFICES 65 IFC Annual Report 2014 WHAT WE DO IFC provides investment, advice, and asset management. These are mutually reinforcing services, delivering financing and global expertise to clients in developing countries. Together, they give us a special advantage in helping the private sector create opportunity — ​ our investment and advice can be tailored to a client’s specific needs, and in ways that add value. Our ability to attract other investors brings additional benefits, introducing our clients to new sources of capital and better ways of doing business. In FY14, EQUITY 17.2 IFC invested INVESTMENT $ Equity investments provide developmental Our investment services provide a broad suite support and long-term growth capital that BILLION of financial products and services that can private enterprises need. We invest directly in in about ease poverty and spur long-term growth by companies’ equity, and also through private-​ 600 projects promoting sustainable enterprises, encour­ equity funds. In FY14, equity investments and mobilized more than aging entrepreneurship, and mobilizing accounted for about $2.3 billion of commit- $5 billion. resources that wouldn’t otherwise be available. ments we made for our own account. Our financing products are designed IFC generally invests between 5 percent to meet the needs of each project. We provide and 20 percent of a company’s equity. We growth capital, but the bulk of the funding encourage the companies we invest in to IFC made comes from private sector owners, who also broaden share ownership through public list- commitments bear leadership and management responsibility. ings, thereby deepening local capital markets. 7.6 for nearly $ In FY14, we invested $17.2 billion in about 600 projects. In addition, we mobilized more We also invest through profit-participating loans, convertible loans, and preferred shares. than $5 billion to support the private sector in BILLION developing countries. in new loans TRADE AND SUPPLY-CHAIN FINANCE in FY14. PRODUCT LINES The IFC Global Trade Finance Program guarantees trade-related payment obligations LOANS of approved financial institutions. The program IFC finances projects and companies through extends and complements the capacity of loans for our own account, typically for seven to banks to deliver trade finance by providing risk 12 years. We also make loans to intermediary mitigation on a per-transaction basis for more banks, leasing companies, and other financial than 200 banks across more than 80 countries. institutions for on-lending. In FY14, trade finance accounted for more While IFC loans traditionally have been than $7 billion of the commitments we made for denominated in the currencies of major IFC’s own account. Our Global Trade Liquidity industrial nations, we have made it a priority to Program has supported $32 billion in trade in structure local-currency products. IFC has developing countries since it was launched provided local-currency financing in more than in 2009. 50 local currencies. In FY14, we made commitments for nearly $7.6 billion in new loans. IFC Annual Report 2014 66 At the end of SYNDICATIONS ADVICE FY14, IFC had an active IFC’s Syndicated Loan Program is the oldest 719 portfolio of and largest among multilateral development Private sector development requires more than banks. In FY14, it accounted for 60 percent of finance. Experience shows the powerful role the funds mobilized by IFC. advice can play in unlocking investment by the ADVISORY In FY14, IFC syndicated about $3.1 billion private sector, helping businesses expand and SERVICES in B-loans, parallel loans, and MCPP loans, create jobs, and so strengthening the World PROJECTS provided by more than 80 financial institutions. Bank Groups’ impact. in more than These included commercial banks, institutional At the end of FY14, IFC had an active 100 countries. investors, development finance institutions, and portfolio of 719 advisory services projects in an emerging-markets central bank. A record more than 100 countries. The majority of the $1.1 billion was provided by co-financiers in program is in IDA countries, and about 20 per- IFC’s active emerging markets. The syndicated loan portfo- cent is in fragile and conflict-affected areas. projects lio stood at $15.2 billion. During FY14, IFC provided advice through four related to Borrowers in the infrastructure sector business lines: access to received 44 percent of the total volume. More finance totaled than a quarter of the financing we provided Access to Finance helps increase the avail- 361 more than through syndications — ​$ 816  million in all — ​went to borrowers in IDA countries. ability and affordability of financial services for individuals and for micro, small, and medium $ enterprises. We help our financial clients provide MILLION broad-based financial services and build the CLIENT RISK-MANAGEMENT SERVICES at the end financial infrastructure necessary for sustainable of FY14. IFC provides derivative products for our clients growth and employment. At the end of FY14, we to allow them to hedge their interest rate, had an active portfolio of 294 projects  valued at — ​ currency, or commodity-price exposures. IFC more than $361 million  in 77 countries. — ​ mediates between clients in developing coun- tries and derivatives market makers in order Investment Climate helps governments to provide clients with full market access to implement reforms that improve the business risk-management products. environment and encourage and retain invest- ment, thereby fostering competitive markets, growth, and job creation. We also help resolve legal and policy weaknesses that inhibit invest- ment. At the end of FY14, IFC had an active portfolio of 161 investment-climate projects in 68 countries, valued at nearly $336 million. 67 IFC Annual Report 2014 AMC Public-Private Partnerships helps govern- 6.4 had about ments to design and implement public-private IFC ASSET MANAGEMENT COMPANY $ partnerships in infrastructure and other basic public services. Our advice helps maximize the IFC Asset Management Company, LLC, a BILLION potential of the private sector to increase wholly owned subsidiary of IFC, mobilizes and in assets access to public services such as electricity, manages capital for investment in developing under water, health, and education while enhancing and frontier markets. It was created in 2009 to management at the end their quality and efficiency. At the end of FY14, provide investors with access to IFC’s emerging-​ of FY14. we had an active portfolio of 118 PPP projects markets investment pipeline and to expand the in 54 countries, valued at about $152 million. supply of long-term capital to these markets, enhancing IFC’s development goals and gener- Sustainable Business helps clients to promote ating profits for investors by leveraging IFC’s IFC sound environmental, social, governance, and global reach, standards, investment approach, Capitalization Fund’s industry standards; catalyze investment in clean and track record. investment energy and resource efficiency; and support As of June 30, 2014, AMC had approxi- commitments sustainable supply chains and community mately $6.4 billion in assets under management. 2.7 had totaled investment. We work in several sectors includ- It manages six investment funds on behalf of a $ ing agribusiness and forestry; manufacturing wide variety of institutional investors, including and services; infrastructure; oil, gas, and mining; sovereign wealth funds, pension funds, and BILLION and financial markets. At the end of FY14, we development finance institutions. at the end had an active portfolio of 146 sustainable-​ busi- of FY14. ness projects in 53 countries, valued at about AMC FUNDS $263 million. IFC CAPITALIZATION FUND In recent years, IFC has introduced a wave of bold reforms to strengthen the impact and The $3 billion IFC Capitalization Fund consists performance of our advisory services. To further of an equity fund of $1.3 billion and a subordi- strengthen client focus and impact, from July 1, nated debt fund of $1.7 billion. Launched in 2014, advisory services will be more closely 2009, the fund helps strengthen systemically aligned with relevant IFC Investment Services important banks in emerging markets, bolster- and World Bank Group Global Practices. ing their ability to cope with financial and economic downturns. As of June 30, 2014, the fund had made 39 investment commitments totaling $2.7 billion. IFC Annual Report 2014 68 IFC AFRICAN, LATIN AMERICAN, IFC RUSSIAN BANK CAPITALIZATION FUND AND CARIBBEAN FUND The $550 million IFC Russian Bank Capital­ The $1 billion IFC African, Latin American, ization Fund was launched in 2012 to invest in and Caribbean Fund was launched in 2010. The commercial-banking institutions in Russia. As fund co-invests with IFC in equity and equity-​ of June 30, 2014, the fund had made three related investments across a range of sectors investment commitments totaling $82 million. in Sub-Saharan Africa and in Latin America and the Caribbean. As of June 30, 2014, the fund IFC CATALYST FUND had made 25 investment commitments totaling $715 million. The $418 million IFC Catalyst Fund invests in funds that provide growth capital to companies developing innovative ways to address climate AFRICA CAPITALIZATION FUND change in emerging markets. It also may invest The $182 million Africa Capitalization Fund directly in those companies. As of June 30, was launched in 2010 to invest in systemically 2014, the fund had made four fund commit- important commercial-banking institutions ments totaling $95 million. in Africa. As of June 30, 2014, the fund had made six investment commitments totaling IFC GLOBAL INFRASTRUCTURE FUND $102 million. The $1.2 billion IFC Global Infrastructure Fund co-invests with IFC in equity and equity-related investments in the infrastructure sector in emerging markets. As of June 30, 2014, the fund had made five investment commitments totaling $172 million. 69 IFC Annual Report 2014 OUR INDUSTRY EXPERTISE IFC’s leadership role in sustainable private sector development reflects a special advantage — ​ the depth and breadth of expertise we have acquired over more than 50 years of helping emerging-market firms succeed and grow. IFC’s new We have moved to leverage our global industry Working through financial intermediar­ - commitments knowledge to tackle the biggest development ies enables IFC to encourage them to become in agribusiness including challenges of the coming years — ​ more involved in sectors that are strategic and climate change, unemployment, and food and such as women-owned businesses priorities — ​ 1 forestry totaled $ water security. and climate change  and in underserved — ​ regions such as fragile and conflict-affected states as well as in housing, infrastructure, BILLION in FY14. AGRIBUSINESS AND FORESTRY and social services. In FY14, our commitments in financial Agribusiness has an important role to play in markets totaled more than $3.4 billion, poverty reduction. The agricultural sector often about 20 per­ cent of commitments for IFC’s In FY14, IFC’s accounts for at least half of GDP and employ- own account. commitments ment in many developing countries, which in financial markets makes it a priority for IFC. totaled IFC provides support for the private sector CONSUMER AND SOCIAL SERVICES 3.4 more than to address rising demand in an environmentally $ sustainable and socially inclusive way. To IFC is the world’s largest multilateral investor in help clients finance inventories, seeds, fertiliz- private health care and education. We work BILLION. ers, chemicals, and fuel for farmers, IFC offers to increase access to high-quality health and working-capital facilities. To facilitate trade and education while also supporting job-creating lower costs, we pursue investments in infra- sectors such as tourism, retail, and property. We structure such as warehouses and cold-storage help improve standards of quality and effi- facilities. To bring land into sustainable produc- ciency, facilitate the exchange of best practices, tion, we work to improve productivity by and create jobs for skilled professionals. transferring technologies and making the best In addition to making direct investments in use of resources. socially responsible companies, our role includes In FY14, our new commitments in agri- sharing industry knowledge and expertise, business and forestry totaled $1 billion, funding smaller companies, raising medical and accounting for about 6 percent of commitments education standards, and helping clients expand for IFC’s own account. services to lower-income groups. In FY14, our new commitments in consumer and social services totaled $928 million, or about 5 per- FINANCIAL INSTITUTIONS cent of IFC’s commitments for our own account. Sound, inclusive, and sustainable financial markets are vital to development because they INFRASTRUCTURE ensure efficient resource allocation. IFC’s work with financial intermediaries helps strengthen Modern infrastructure spurs economic growth, financial institutions and overall financial sys- improves living standards, and can represent tems. It also allows us to support far more micro, an opportunity to address emerging develop- small, and medium enterprises than we would ment challenges, including rapid urbanization be able to on our own. and climate change. IFC Annual Report 2014 70 It is also an area in which the private sector can make a significant contribution, OIL, GAS, AND MINING providing essential services to large numbers of people efficiently, affordably, and profitably. Industries that can harness natural resources This is IFC’s focus: supporting private infrastruc- are vital for many of the world’s poorest coun- ture projects whose innovative, high-​ impact tries. They are a key source of jobs, energy, business models can be widely replicated. government revenues, and a wide array of other We help increase access to power, trans- benefits for local economies. In Africa, in partic- portation, and water by financing infrastructure ular, large-scale sustainable investments in projects and advising client governments on these industries can create equally large-scale public-private partnerships. We mitigate risk and gains in economic development. leverage specialized financial structuring IFC’s mission in the oil, gas, and mining and other capabilities. In FY14, our new commit- sector is to help developing countries realize ments in this sector totaled about $2.4 billion, these benefits. We provide financing and advice or about 14 percent of commitments for IFC’s for private sector clients, and also help gov- own account. ernments adopt effective regulations and strengthen their capacity to manage these industries across the value chain. MANUFACTURING We support private investment in these industries, and we work to ensure that local The manufacturing sector plays a vital role communities enjoy concrete benefits. In FY14, in creating opportunity and reducing poverty in our new commitments for our own account in developing countries. IFC’s manufacturing the sector totaled $441 million. clients tend to create or maintain more employ- ment than those in any other sector. We have increased our activities in the TELECOMMUNICATIONS sector, which includes construction materials, AND INFORMATION TECHNOLOGY energy-efficient machinery, chemicals, and equipment for solar and wind power. We invest Modern information and communication tech- in companies that are developing new products nologies make it easier for the poor to obtain and markets or restructuring and modernizing access to services and resources. They expand to become internationally competitive. opportunity and make markets and institutions We are also helping clients make invest- more efficient. IFC works to extend the avail- ments that can reduce carbon emissions and ability of such technologies. We channel energy consumption. investments toward private companies that In FY14, our new commitments in the build modern communications infrastructure manufacturing sector totaled $984 million, or and information-technology businesses and nearly 6 percent of commitments for IFC’s develop climate-friendly technologies. own account. IFC increasingly helps clients move beyond their own national borders and into other devel- oping markets. In FY14, our new commitments for our own account in this sector totaled $489 million. 71 IFC Annual Report 2014 OUR PEOPLE & PRACTICES IFC’s commitment to alleviating poverty and creating opportunity for the developing world’s most vulnerable people is reflected in our corporate culture. IFC Annual Report 2014 72 THE IFC WAY A strong corporate culture is central to any organization’s ability to succeed and adapt to new challenges. The IFC Way is a way of being, defining, and solidifying IFC’s culture and brand, and a process that engages staff at all levels and in all regions to inform management decision making. It includes our vision, our core corporate values, our purpose, and the way we work. OUR VISION THE WAY WE WORK That people should have the opportunity to • We help our clients succeed in a escape poverty and improve their lives changing world • Good business is sustainable, and sustainability is good business OUR VALUES • Diversity creates value Excellence, Commitment, Integrity, Teamwork, • Creating opportunity requires and Diversity partnership • Global knowledge, local know-how • Innovation is worth the risk OUR PURPOSE • We learn from experience To create opportunity for people to escape • Work smart and have fun poverty and improve their lives by catalyzing the • No frontier is too far or too difficult means for inclusive and sustainable growth, through: • Mobilizing other sources of finance for private enterprise development • Promoting open and competitive mar- kets in developing countries • Supporting companies and other private sector partners where there is a gap • Helping generate productive jobs and deliver essential services to the poor and vulnerable To achieve our purpose, IFC offers development-impact solutions through firm- level interventions (direct investments, advisory services, and the IFC Asset Management Company); through global collective action, through governance and standard-setting; and through work to improve the business- enabling environment. 73 IFC Annual Report 2014 HOW WE MEASURE DEVELOPMENT RESULTS by effectively tracking progress and assessing its impact — ​ Measuring the results of our work — ​ is critical to understanding how well our strategy is working and whether IFC is reaching and making a difference for the people and markets that most need our help. In FY14, the World Bank Group adopted a The updated system will help ensure unified strategy for achieving its goals of ending that operational teams receive critical and timely poverty and boosting shared prosperity. IFC’s information and data about whether projects strongest contributions to the goals will come are on track to achieve their development goals from promoting sustainable private enterprise — ​ or whether a course correction is required. The with the primary objective of creating and updates also will help ensure that future project providing good jobs and accelerating inclusive and program design and implementation reflect economic growth. In this context, job creation the lessons of experience. In addition, they will and economic growth are useful indicators of — ​ reinforce IFC’s ability to demonstrate  through IFC’s development impact. evidence  how we are creating opportunity and — ​ Because IFC’s operational focus has improving lives in developing countries. shifted, in line with the new Bank Group strategy and organizational structure, our results-​ THE MONITORING AND TRACKING SYSTEM measurement system is changing as well. In FY14, we focused on updating and improving We are streamlining and simplifying the way we our results-measurement framework to meet monitor and track development results — ​ not emerging needs. The improvements, which only to address IFC’s emerging business needs have been approved for implementation in FY15, but also to provide increased benefits to our are designed to: clients in the future. These changes will reduce 1. Enhance our ability to assess the “process burden” on IFC operations teams impact of IFC’s work on jobs and eco- while ensuring greater accuracy and precision nomic growth in the data we gather. 2. Increase attention to IFC’s results at the IFC uses the Development Outcome country and sector levels Tracking System, or DOTS, to monitor the devel- 3. Integrate IFC’s results-measurement opment results of our investment and advisory system with the Bank Group’s system work. For investment services, DOTS covers — ​ The changes to the system build on, and after certain exclusions — ​1,828 companies are informed by, our experience over the years, under supervision. Reach indicators measure the and what we have learned from working number of people reached by IFC clients with others. or the dollar benefit to particular stakeholders, regardless of IFC’s investment size. For our advisory work, DOTS scores are based on a IMPROVING IFC’S RESULTS- review of all projects completed in a calendar MEASUREMENT SYSTEM year. The FY14 ratings are defined as a review of 177 completion reports filed in 2013, of which IFC’s results-measurement system currently 144 could be assessed. We continue to report features three mutually reinforcing compo- on development results for our entire portfolio nents: the IFC Development Goals, a monitoring and have them assured by an external firm. system to measure development results, and Our initial focus is on DOTS for invest- systematic self-evaluations of the impact of our ments, including these changes: investment and advisory work. • Adopting a simpler, more targeted set of monitoring indicators for tracking IFC Annual Report 2014 74 development results. This includes IFC’S EVALUATIONS using the harmonized definitions for indicators agreed to by 25 development To ensure that we learn from our experience  — ​ finance institutions and a common and make course corrections when they set of core monitoring indicators for are needed — ​ we conduct regular evaluations joint investment and advisory activities. of IFC’s projects. As part of the improvements • Rationalizing the process, with an to our results measurement framework, emphasis on customizing the process we are also moving toward more systematic and for projects in fragile and conflict-​ strategic evaluations at both the project and affected areas, and for transformational programmatic level. This will deepen our under- engagements. standing of impact  especially with respect to — ​ • Making better use of technology to jobs and economic growth. increase efficiency and quality of To improve our understanding of how our reporting projects produce macroeconomic multiplier • Sharing with our clients data and effects, we evaluated a maritime port expansion analysis that may be useful for their and estimated the impacts on jobs and income. corporate-​social-responsibility or Our evaluation of the expansion of the Muelles market-intelligence needs. El Bosque Port in Cartagena, Colombia, showed that the project helped triple terminal THE IFC DEVELOPMENT GOALS capacity, increase direct employment by more than 50 percent, and increase worker produc- The IFC Development Goals are targets for tivity by more than 30 percent. Between 2008 reach, access, or other tangible development and 2012, the port expansion created economic outcomes that projects signed or committed by impacts estimated at up to $52 million and IFC are expected to deliver during their lifetime. raised income by up to $20 million. We intend Three goals are fully integrated into IFC’s to replicate this study in other markets and corporate scorecard for management and staff. sectors to improve IFC’s ability to quantify the We also continue to test two additional goals  — ​ benefits of improved infrastructure. for infrastructure and climate change, which will We also evaluated our work to promote be implemented in FY15. We have learned small and medium enterprises under our SME from experience that large projects can cause Ventures program, which set up venture capital significant fluctuations in our results for any funds in the Democratic Republic of Congo, given year. So this year we introduced three- Liberia, Sierra Leone, Central African Republic, year targets (see page 78) to account for Bangladesh, and Nepal. We found that the such effects. funds achieved important demonstration effects. Lessons IFC has learned from implement- They helped establish role-model companies — ​ ing the IDGs have proved useful in efforts to such as a medical clinic in Congo that built a develop an overarching Corporate Scorecard new facility. In each viable market, private equity for the World Bank Group, particularly around funds also have either raised or announced setting intermediate targets for reaching the plans to raise funds targeting that economy. Bank Group goals on poverty and prosperity. This reflects IFC’s role in reducing investor risk in these countries and highlighting their appeal 75 IFC Annual Report 2014 as investment destinations — ​ not only for profit-​ South Asia recorded the largest improve- seeking enterprises, but also for social-impact ment, with 66 percent of clients rated high  — ​​ investors and development finance institutions. a six-point increase that reflected improved performance of clients in the manufacturing sector in India. INVESTMENT RESULTS In East Asia and the Pacific, 61 percent In recent years, IFC has increasingly ventured of our clients were rated high  a drop of nine — ​ into some of the world’s most challenging points that partly reflected new early-stage areas  — ​ such as those affected by conflict and projects in infrastructure. It also reflected instability. Our projects in these areas hold declining results in agribusiness and forestry, great potential for development impact  — ​ but the financial markets and telecommunications impact takes time to materialize. In FY14, we and information technology. had a greater number of such projects in our Results for Sub-Saharan Africa, Middle portfolio, which marginally lowered IFC’s overall East and North Africa, and Europe and Central DOTS score. Asia were largely in line with last year’s In all, 64 percent of our investment opera- performance. tions were rated high, slightly below our target At the industry level, our ratings improved of 65 percent. The number of clients rated in the most in the manufacturing and oil, gas, and FY14 climbed 16 percent over the previous year mining sectors. They were nearly stable in to 833. The performance of newer projects was consumer and social services and financial weaker, consistent with the challenging busi- markets, and declined in other sectors. ness environment in which many of them were Funds constituted our best-performing implemented and the higher risk associated sector, with 72 percent of clients rated high. with equity projects  — ​ which increased last year. That marked a decline of seven points over the The DOTS score measures the develop- previous year. But performance of new entrants ment effectiveness of our investment to our rating cohort was strong, particularly operations, without regard to the projects’ risk. in Sub-Saharan Africa and in East Asia and In general, larger projects are less risky than the Pacific. smaller projects. When the ratings are weighted In oil, gas and mining, 69 percent of clients for investment volume, for example, 73 percent were rated high, an increase of five points from of our projects were rated high in FY14. FY13 that mainly reflected high-performing new By region, our investments in Latin America projects in Latin America and the Caribbean and the Caribbean had the strongest develop- and in the Middle East and North Africa. ment results, with 67 percent of companies Ratings of clients in the infrastructure rated high. This was achieved despite a seven-­ sector dropped 7 points to 66 percent mainly point drop from last year because of weaker because of weaker performance among green- client performance across most sectors, espe- field projects. The weaker performance also cially in infrastructure and in telecommunications reflected low-performing new investments and information technology. in East Asia and the Pacific. Existing clients in Sub-Saharan Africa and in Middle East and North Africa registered stronger performance. IFC Annual Report 2014 76 In the agribusiness and forestry sector, connections to nearly 131 million ratings declined seven points to 61 percent customers in South Asia and distrib- amid deteriorating market conditions, especially uted water to more than 10 million in East Asia and the Pacific and in Sub- customers in East Asia and the Pacific. Saharan Africa. In the manufacturing sector, 55 percent ADVISORY RESULTS of our clients were rated high  an increase of — ​ six points. Performance improved across most Seventy-six percent of IFC advisory projects regions, with the largest increases in South that closed during the year and could be Asia and in the Middle East and North Africa. assessed for development effectiveness were In the telecommunications and information rated high  matching the record set in FY13. — ​ technology sector, 42 percent of clients were Ratings for operations in IDA countries also rated high  — ​ a decline of 13 points that reflected were 76 percent. In addition, a record 91 per- the riskier nature of smaller venture-​capital-​ type cent of clients reported satisfaction with IFC’s investments. When the scores were weighted advisory work. to reflect project size, 65 percent of projects in Below are selected highlights from 2013: the sector were rated high. • We helped governments sign 10 public-​​ The reach of IFC’s investment clients is private partnership contracts. Six of reflected in detail in the table on page 79. these were in IDA countries, including Below are a few highlights: three in fragile and conflict-affected • With our assistance, IFC clients areas. These partnerships are expected improved opportunities for more than to improve access to infrastructure and 1 million farmers in Sub-Saharan Africa, health services for over 1.6 million and about 565,000 in South Asia. people (915,000 of them in fragile and • Our clients treated nearly 3.8 million conflict-affected areas), and mobilize patients in the Middle East and North over $306 million in private investment. Africa, and an additional 2.7 million in • We helped companies provide afford- Europe and Central Asia. They also able off-grid lighting solutions for educated 1.1 million students in Latin 8.5 million people. America and the Caribbean. • We helped governments in 53 coun- • In East Asia and the Pacific, our clients tries adopt over 100 investment-climate provided 6.4 million loans totaling reforms to foster growth and business $106 billion to micro, small, and creation. This included 38 IDA countries, medium enterprises. which adopted 73 reforms, and 14  • In the infrastructure sector, our clients fragile and conflict-affected areas, generated and distributed power which adopted 24 reforms. to nearly 34 million customers in East • We helped governments enact industry Asia and the Pacific, and more than and investment-promotion reforms 17 million in Latin America and the that helped attract $20 million in new Caribbean. They also provided phone investments. 77 IFC Annual Report 2014 • We helped firms adopt new practices $124 billion. We also worked with and technologies that attracted addi- 18 financial intermediaries that provided tional financing in excess of $700 million, close to 74,000 housing-​ finance loans of which more than $600 million was totaling $2.3 billion. from investors other than IFC. Corporate- • We helped improve financial markets governance reforms helped attract infrastructure by working with collateral $390 million in financing for our clients; registries that facilitated a total of food-safety reforms helped attract $11.7 billion in financing. The beneficia- $90 million in investment, and clean ries included 70,000 SMEs. In addition, energy and resource-efficient technolo- we helped create or strengthen four gies led to investments of $230 million. credit-bureau operators. • Working in partnership with IFC • We worked with partners in digital finan- Investment Services, we engaged with cial services to help facilitate almost 146 financial intermediaries that pro- 4.2 million noncash retail transactions. vided about 17 million microfinance and SME loans totaling more than THE IFC DEVELOPMENT GOALS Percent of Percent of FY14–FY16 FY14 *FY14–FY16 FY14 IDG FY14 Target Target Goal IDG Target Targets Commitments Achieved Achieved Increase or improve sustainable Benefit Benefit 1.21 million 99% 26% farming opportunities 1.23 million 4.64 million people people people Improve health and Benefit Benefit 8.19 million 260% 55% education services 3.14 million 14.80 million people people people Increase access to financial Benefit Benefit 36.35 million 134% 43% services for microfinance clients 27.18 million 83.59 million people people people Increase access to financial Benefit Benefit 1.10 million 78% 24% services for SME clients 1.42 million 4.61 million people people people Increase or improve Benefit Benefit 22.17 million 96% 29% infrastructure services 23.09 million 75.36 million people people people Reduce greenhouse-gas Reduce by Reduce by 5.52 million 101% 30% emissions 5.44 million 18.42 million metric tons metric tons metric tons of CO2 of CO2 equivalent equivalent per year per year * Cumulative total over three years (FY14–FY16). IFC Annual Report 2014 78 DEVELOPMENT REACH BY IFC’S INVESTMENT CLIENTS Portfolio Portfolio CY12 CY13 Investments Employment (millions of jobs)1 2.7 2.6 Microfinance loans2 Number (millions) 22.9 29.1 Amount ($ billions) 25.13 28.01 SME loans2 Number (millions) 5.8 5.4 Amount ($ billions) 243.79 273.60 Trade Finance3 Number of transactions (millions) N/A 2.0 Amount ($ billions) N/A 310 Customers reached with services Power generation (millions of customers) 52.2 51.3 Power distribution (millions of customers)4 46.5 24.3 Water distribution (millions of customers) 42.1 30.3 Gas distribution (millions of customers)5 33.8 39.8 Phone connections (millions of customers)6 192.0 180.9 Patients reached (millions) 17.2 27.1 Students reached (millions) 1.0 2.5 Farmers reached (millions) 3.1 2.9 Payments to suppliers and governments Domestic purchases of goods and services ($ billions) 46.19 34.26 Contribution to government revenues or savings ($ billions)7 26.20 18.63 These figures represent the reach of IFC clients as of end of CY12 and CY13. CY12 and CY13 portfolio data are not strictly comparable, because they are based on a changed portfolio of IFC clients. For microfinance and SME loans, results reflect also contributions from Advisory Services. 1. Portfolio figures for employment include jobs provided by Funds. 2. Portfolio reach figures represent SME and microfinance outstanding loan portfolio of IFC clients as of end of CY12 and CY13, for MSME-oriented financial institutions/projects. For clients that did not report numbers, data were extrapolated. This year, for the first time, the data include AS-only clients, so CY12 data were recalculated on a comparable basis. 3. Estimate of the number and dollar volume of trade transactions financed by the Global Trade Finance Program’s network of emerging-market banks, based on actual data from 82% of the network’s 247 banks and extrapolation of the rest. Numbers reflect transactions directly guaranteed by IFC as well as those executed by the network banks that have been supported by the program. 4. CY12 total Power Distribution customers revised due to the restatement of one client value in Middle East and North Africa. 5. One client in East Asia and the Pacific accounted for 37.1 million gas-distribution customers in CY13. 6. One client in South Asia accounted for 121.6 million phone-connection customers in CY13. 7. CY12 total Taxes and Other Payments revised due to the restatement of one client value in Sub-Saharan Africa. 79 IFC Annual Report 2014 INVESTMENT SERVICES DOTS SCORE BY PERFORMANCE AREA, FY14 % Rated High Development Outcome 64% 73% Financial Performance 47% 54% Economic Performance 58% 66% Environment & Social Performance 66% 69% Private Sector Development Impact 73% 80% Unweighted   Weighted INVESTMENT SERVICES DOTS SCORE BY INDUSTRY, FY13 VS. FY14 % Rated High IFC Total 66% 64% Funds 79% 72% Oil, Gas & Mining 64% 69% Financial Markets 70% 68% Infrastructure 73% 66% Agribusiness & Forestry 68% 61% Consumer & Social Services 56% 57% Manufacturing 49% 55% Telecom & IT 55% 42% FY13   FY14 IFC Annual Report 2014 80 INVESTMENT SERVICES DOTS SCORE BY REGION, FY13 VS. FY14 % Rated High IFC Total 66% 64% Latin America and the Caribbean 74% 67% South Asia 60% 66% Sub-Saharan Africa 61% 64% Middle East and North Africa 65% 62% East Asia and the Pacific 70% 61% Europe and Central Asia 64% 61% FY13   FY14 ADVISORY SERVICES DOTS SCORE BY BUSINESS LINE % Rated High IFC Total 75% 76% Investment Climate 76% 82% Sustainable Business Advisory 81% 82% Access to Finance 78% 80% Public-Private Partnerships 49% 45% FY12 to FY14   FY14 ADVISORY SERVICES DOTS SCORE BY REGION % Rated High IFC Total 75% 76% Europe and Central Asia 83% 85% Latin America and the Caribbean 77% 79% Middle East and North Africa 59% 75% South Asia 82% 74% East Asia and the Pacific 66% 71% Sub-Saharan Africa 74% 70% FY12 to FY14   FY14 81 IFC Annual Report 2014 OUR STAFF IFC’s employees are diverse. They are our most important asset. Representing more than 140 countries, our staff brings innovative solutions and global best practices to local clients. Our offices are in 108 cities in 98 countries. More than half of us — ​59 percent — ​ are based in offices outside the United States, an increasing percentage that reflects our commitment to decentralization. Most IFC staff, 63 percent in all, hail from countries that are not IDA donors — ​ a diversity that enriches our perspective and underscores our focus on areas where private sector development can have the biggest impact. WHERE WE WORK Location FY09 FY14 OUR OFFICES ARE IN 108 United States 1,579 (46%) 1,582 (41%) Other Countries 1,836 (54%) 2,297 (59%) Total IFC Staff 3,415 3,879 CITIES IN 98 NATIONAL ORIGIN —  ​A LL FULL-TIME STAFF National Origin FY09 FY14 IDA Donor Countries1 1,263 (37%) 1,448 (37%) Other Countries 2,152 (63%) 2,431 (63%) COUNTRIES Total 3,415 3,879 NATIONAL ORIGIN —  ​S TAFF GRADED AT OFFICER LEVEL AND HIGHER IFC’S EMPLOYEES REPRESENT MORE THAN 140 National Origin FY09 FY14 IDA Donor Countries1 923 (46%) 1,131(44%) Other Countries 1,072 (54%) 1,433 (56%) Total 1,995 2,564 1. Based on self-declaration of countries at the time of their IDA membership. COUNTRIES GENDER  —  ​A LL FULL-TIME STAFF NEARLY 60% Gender FY09 FY14 Female Staff 1,822 (53%) 2,068 (53%) Male Staff 1,953 (47%) 1,811 (47%) Total 3,415 3,879 OF IFC STAFF ARE BASED IN FIELD OFFICES GENDER —  ​S TAFF AT OFFICER LEVEL AND HIGHER Gender FY09 FY14 Female Staff 784 (39%) 1,105 (43%) Male Staff 1,211 (61%) 1,459 (57%) Total 1,995 2,564 IFC Annual Report 2014 82 awards are designed to encourage teamwork, COMPENSATION reward top performance, and support IFC’s IFC’s compensation guidelines are part of strategic priorities, such as projects in fragile the World Bank Group’s framework. The inter- affected states. and conflict-​ national competitiveness of compensation is essential to our capacity to attract and retain BENEFITS PROGRAMS highly qualified, diverse staff. The salary struc- ture for staff recruited in Washington, D.C. is IFC provides a competitive package of benefits, based on the U.S. market, which historically has including medical, life, disability insurance and been globally competitive. Salaries for staff a retirement plan. Medical insurance costs are hired outside the United States are based on shared  75 percent is paid by IFC and 25 per- — ​ local competitiveness, determined by indepen- cent by the insured. dent local market surveys. Based on the World IFC’s pension is part of the World Bank Bank Group’s status as a multilateral organiza- Group plan, based on two benefit components: tion, staff salaries are determined on a net-​ of- first, a defined-benefit component fully funded ­​tax basis. by IFC based on years of service, salary, and retirement age; second, a cash-balance compo- nent  a mandatory contribution of 5 percent — ​ VARIABLE PAY PROGRAMS of salary, to which IFC adds 10 percent annually. IFC’s variable pay programs consist of several The Bank Group also sponsors an optional components, including recognition, annual, U.S.-style 401(k) plan for Washington-based and long-term performance awards that sup- staff and an optional savings plan for country-​ port IFC’s high-performance culture. These office staff. STAFF SALARY STRUCTURE (WASHINGTON, D.C.) During the period July 1, 2013 to June 30, 2014, the salary structure (net of tax) and average net salaries/benefits for World Bank Group staff was as follows: Market Staff at Average Minimum Reference Maximum Grade Salary/ Average Grades Representative Job Titles ($) ($) ($) Level (%) Grade Benefitsa GA Office Assistant 25,600 33,300 43,200 0.03% 41,678 25,211 GB Team Assistant, Information Technician 32,300 42,000 58,900 0.7% 43,379 26,240 GC Program Assistant, Information Assistant 39,900 51,900 72,700 8.8% 54,889 33,202 GD Senior Program Assistant, Information Specialist, Budget Assistant 47,100 61,300 85,900 7.2% 68,072 41,177 GE Analyst 63,300 82,300 115,300 9.1% 78,653 47,577 GF Professional 84,200 109,400 153,200 20.3% 101,806 61,583 GG Senior Professional 113,500 147,600 206,600 32.2% 139,957 84,660 GH Manager, Lead Professional 154,700 201,100 260,000 18.6% 193,786 117,221 GI Director, Senior Advisor 206,200 269,800 309,400 2.6% 255,823 154,748 GJ Vice President 280,000 313,700 351,300 0.4% 317,025 191,768 GK Managing Director, Executive Vice President 307,600 348,800 383,600 0.1% 364,315 221,237 Note: Because World Bank Group (WBG) staff, other than U.S. citizens, usually are not required to pay income taxes on their WBG compensation, the salaries are set on a net-of-tax basis, which is generally equivalent to the after-tax take-home pay of the employees of the comparator organizations and firms from which WBG salaries are derived. Only a relative small minority of staff will reach the upper third of the salary range. a. Includes medical, life and disability insurance; accrued termination benefits; and other nonsalary benefits. 83 IFC Annual Report 2014 OUR GOVERNANCE IFC works with the private sector to create OUR PLACE IN THE WORLD BANK GROUP opportunity where it’s needed most. Since our founding in 1956, we have committed more The World Bank Group is a vital source of than $162 billion of our own funds for private financial and technical assistance to developing sector investments in developing countries, and countries. Established in 1944, its mission is to we have mobilized billions more from others. fight poverty with passion and professionalism, In working to end extreme poverty and for lasting results. boost shared prosperity, we collaborate closely IFC is one of five members of the Bank with other members of the Bank Group. Group, though it is a separate legal entity with separate Articles of Agreement, share capital, financial structure, management, and staff. OUR BOARD Membership in IFC is open only to member countries of the World Bank. As of June 30, Each of our member countries appoints one 2014, IFC’s paid-in capital of about $2.5 billion governor and one alternate. Corporate powers was held by 184 member countries. These are vested in the Board of Governors, which countries guide IFC’s programs and activities. delegates most powers to a board of 25 direc- tors. Voting power on issues brought before them is weighted according to the share capital each director represents. The directors meet regularly at World Bank Group headquarters in Washington, D.C., where they review and decide on investments and provide overall strategic guidance to IFC management. The President of the World Bank Group is also President of IFC. IFC Annual Report 2014 84 Left to right: Arnaud Delaunay (alternate) France • Jörg Frieden Switzerland • Gwen Hines United Kingdom • Merza Hasan (Dean) Kuwait • Denny H. Kalyalya Zambia • Satu Santala Finland • Piero Cipollone Italy • Wilhelm Rissmann (alternate) Germany Standing (Left to Right): Frank Heemskerk Netherlands • Omar Bougara Algeria • Vadim Grishin Russian Federation • Roberto B. Tan Philippines • Ibrahim M. Alturki (alternate) Saudi Arabia • Boonchai Charassangsomboon (alternate) Thailand • Alister Smith Canada • Gulsum Yazganarikan (alternate) Turkey • Agapito Mendes Dias São Tomé and Príncipe • Hideaki Suzuki Japan • Shixin Chen China • Mansur Muhtar Nigeria • Mohammad Tareque (alternate) Bangladesh • Juan José Bravo Mexico • Michael Willcock Australia • Sara Aviel (alternate) United States Not pictured: César Guido Forcieri Argentina OUR MEMBER COUNTRIES —  ​S TRONG SHAREHOLDER SUPPORT EXECUTIVE COMPENSATION GRAND TOTAL 100% The salary of the President of the World Bank UNITED STATES 22.75% Group is determined by the Board of Directors. JAPAN 6.49% The salary structure for IFC’s Executive Vice GERMANY 5.15% President and CEO is determined by positioning FRANCE 4.84% a midpoint between the salary structure of staff UNITED KINGDOM 4.84% at the highest level, as determined annually by INDIA 4.11% RUSSIAN FEDERATION 4.11% independent U.S. compensation market surveys, CANADA 3.25% and the salary of the World Bank Group ITALY 3.25% President. The compensation of our executive CHINA 2.46% leadership is transparent. IFC’s Executive Vice 174 OTHER COUNTRIES 38.75% President and CEO, Jin-Yong Cai, received a salary of $382,643, net of taxes. There are no executive incentive compensation packages. 85 IFC Annual Report 2014 ACCOUNTABILITY IEG’s report on targeted support to small INDEPENDENT EVALUATION GROUP and medium-size enterprises, or SMEs, exam- ined whether IFC’s activities helped build a The Independent Evaluation Group contributes sustainable supply of finance and other services lessons from its evaluations to IFC’s learning for SMEs. IEG found that clients value IFC, but agenda. IEG is independent of IFC management that investment projects often lack features that and reports directly to the World Bank Group’s would enhance their impact, including clear Boards of Directors. Its mission is to strengthen strategies connecting interventions to intended the performance of the Bank Group institutions outcomes and solid measurement systems. and inform their strategies and future work. Overall, IFC’s SME advisory services performed IEG evaluates eligible IFC investment and well and, where paired with investment projects, advisory projects. These ratings are shared with improved development outcomes. IFC and aggregated into IEG’s annual evaluation IEG’s evaluation report, World Bank Group of World Bank Group results and performance. Assistance to Low-Income Fragile and Conflict- IEG’s most recent annual report, for 2013, found Affected States, concluded that IFC needs to that development-outcome ratings for IFC adapt its business model, risk tolerance, prod- investments have declined from historically high uct mix, procedures, and processes to achieve levels. The decline was concentrated in IDA- its goal of increasing engagement in these eligible countries, infrastructure projects, and countries and to be more responsive to their financial-markets operations. The report also special needs. highlighted the need for IFC to examine the IEG reports are disclosed on its website: implications of the shift in its product mix toward http://ieg.worldbankgroup.org. support to financial intermediaries. IFC Annual Report 2014 86 agribusiness project in Honduras. One case OFFICE OF THE COMPLIANCE was closed after monitoring: an investigation of ADVISOR OMBUDSMAN IFC related to the Mozal aluminum smelter in Mozambique. The Office of the Compliance Advisor Through dispute resolution, CAO is Ombudsman is the independent accountability working with communities and IFC clients in mechanism for IFC and the Multilateral 16 countries. Projects in dispute resolution Investment Guarantee Agency. CAO’s mandate include the Chad-Cameroon Oil Pipeline, Oyu is to address complaints from people affected Tolgoi mine in Mongolia, Yanacocha mine by IFC and MIGA projects and enhance envi- in Peru, and Bujagali hydropower project in ronmental and social project outcomes. CAO Uganda. CAO is monitoring settlements related reports to the World Bank Group President. to agribusiness projects in Nicaragua and CAO facilitates dispute resolution Uganda, an Advisory Services project in Papua between communities and IFC clients, con- New Guinea, and an airport infrastructure ducts compliance investigations of IFC, and project in Cambodia. provides independent advice to the President In Uganda, CAO concluded mediations and management. between two local communities and an IFC In FY14, CAO addressed 54 cases in client regarding land and livelihood impacts of 21 countries related to IFC projects in agribusi- a timber plantation. Both mediation processes ness, education, extractives, infrastructure, led to the establishment of community coopera- manufacturing, and power sectors, including tives that are being supported by IFC’s client, projects through Advisory Services and land for resettlement of affected community Financial Markets. members, and joint implementation of commu- In its compliance work, CAO closed four nity development programs. cases at appraisal and seven investigations are In its advisory role, CAO is developing ongoing. CAO is monitoring IFC’s response to a more systematic method for feeding lessons its investigation findings related to power sector from its work to IFC, and has conducted privatization in Kosovo, the Tata Ultra Mega staff workshops on grievance mechanisms power project in India, IFC’s global financial and learning from major transformational intermediary portfolio, and Dinant, an projects. For more information, please visit www.cao-ombudsman.org. 87 IFC Annual Report 2014 PARTNERSHIPS IFC works with governments, corporations, maximize development impact in areas of foundations, and other multilateral organiza- strategic priority for us and for development tions and development institutions to foster partner organizations. The following initiatives innovative partnerships that create prosperity showcase the work of IFC, born of strong and eradicate poverty. Our collaborative partnerships, to foster the kind of private sector approach emphasizes the power of sustained development that will eradicate extreme poverty partnerships, focuses on results measurement and increase shared prosperity. and efficiency, and leverages the contributions of our development partners to maximize HUNGARY EXIM BANK impact on the lives of the poor. Hungary partnered with IFC for the first time in 2014 to tackle some of the world’s most WORKING WITH DEVELOPMENT PARTNERS pressing development challenges. Hungary’s Export-​Import Bank pledged $20 million to IFC IFC maintains long-term relationships with its to help support projects in agribusiness, health, development partners, with whom we work to and water management. This partnership will promote private sector development across support projects in Europe and Central Asia, the globe. Our development partners strongly South Asia, the Middle East and North Africa, support the work of IFC Advisory Services, and East Asia and the Pacific. It also opens the to which they committed a record $339 million door for further collaboration with the World in FY14. Bank Group. FY14 was a year of landmark agreements between IFC and our development partners. IFC JAPAN forged new partnerships with global institutions, including 3GI, Goldman Sachs, the Financial Japan’s Ministry of Finance and IFC have set Sector Deepening Trust, the Ford Foundation, up a new partnership for the African continent as the Export-Import Bank of Hungary, and the part of the Tokyo International Conference on Dingyi Group. FY14 also saw significant contri- African Development (TICAD V). The $30 mil- butions from longstanding development lion partnership provides a valuable opportunity partners to new IFC advisory programs. For to strengthen the partnership between Japan example, the European Union made its first and IFC, particularly to support small and commitment to an IFC program in Latin America medium enterprises. These businesses are the and the Caribbean  specifically our food-export — ​ bedrock of Africa’s private sector and employ program in Jamaica. In addition, Canada the vast majority of its working population. provided funds to support IFC’s agribusiness Under the proposed new partnership, contribu- activities in Africa. tions from Japan would be used to promote Through development-partner trust funds, strong regulatory environments, develop nascent IFC continues to provide flexible financing, markets, provide job training, and improve thought leadership, and knowledge sharing to access to finance, with special attention given affected areas. to fragile and conflict-​ IFC Annual Report 2014 88 INCLUSIVE GREEN GROWTH PLATFORM Denmark was the first country to contribute $4.5 million in 2013 toward the Green Growth platform — ​a unique funding mechanism that offers flexible funding for environmentally friendly projects around the world. In contrast to the practice of funding projects individually, this arrangement allows IFC and a partner to support broad strategic themes, which increases efficiency and reduces transaction costs and allows the partnership to achieve a greater development impact. FINANCIAL COMMITMENTS TO IFC ADVISORY SERVICES (US$ Million Equivalent)* Summary FY13 FY14 Institutional/Multilateral Partners FY13 FY14 Governments 239.61 272.51 Climate Investment Funds 0.50 16.62 “Institutional/Multilateral Partners” 1.66 46.66 European Commission 0.00 19.68 Corporations, Foundations, and NGOs 12.35 19.38 Financial Sector Deepening Trust 0.00 0.60 Total 253.62 338.56 Global Green Growth Institute (3GI)* 0.00 0.60 *Unaudited figures Islamic Development Bank 0.00 0.31 Governments FY13 FY14 Livelihoods and Food Security Australia 21.87 7.01 Trust Fund 1.11 3.62 Austria 12.70 11.24 MENA Transition Fund 0.00 5.24 Canada 47.83 48.12 UN Agencies 0.05 0.00 Denmark 3.61 4.47 Total 1.66 46.66 France 2.65 0.00 Germany 1.15 0.99 Corporations, Foundations, Hungary 0.00 20.00 and NGOs FY13 FY14 Ireland 1.12 2.65 Bill & Melinda Gates Foundation 2.87 2.00 Italy 0.00 4.72 Blue Moon Fund Inc. 0.25 0.00 Japan 7.22 36.71 BP Exploration (Caspian Sea) Limited 0.00 0.40 Korea 0.00 3.00 Dingyi Venture Capital (HK) Limited 0.00 3.00 Luxembourg 6.79 0.00 Ford Foundation 0.00 0.15 The Netherlands 18.59 55.00 Goldman Sachs Foundation 0.00 11.33 New Zealand 4.00 0.00 Marie Stopes International 3.87 0.00 Norway 2.01 3.27 Nestlé SA* 1.00 0.00 South Africa 0.67 0.00 Omidyar Network Fund, Inc. 0.07 0.00 Sweden 5.32 2.76 PepsiCo Foundation* 2.00 0.00 Switzerland 63.51 47.72 SABMiller PLC* 0.25 0.25 United Kingdom 34.79 16.60 The Coca-Cola Company* 2.00 2.25 United States 5.78 8.26 The MasterCard Foundation 0.03 0.00 Total 239.61 272.51 Total 12.35 19.38 * Contributor to the 2030 - Water Resource Group 89 IFC Annual Report 2014 MANAGING RISKS Investors and other partners participating PORTFOLIO MANAGEMENT in IFC’s operations are kept regularly informed on project developments. IFC consults or seeks Portfolio management is an intrinsic part their consent as appropriate. of managing IFC’s business to ensure strong financial and development results of our projects. TREASURY SERVICES IFC’s management reviews our entire portfolio globally on a quarterly basis and IFC raises funds in the international capital reports on the portfolio performance to the markets for private sector lending and to ensure Board annually. Our portfolio teams, largely sufficient liquidity to safeguard IFC’s triple-A based in field offices, complement global credit ratings. reviews with asset-by-asset quarterly reviews. Issuances include benchmark bonds in On the corporate level, IFC combines the core currencies such as U.S. dollars, thematic analysis of our $51.7 billion portfolio perfor- issuances to support strategic priorities such mance with projections of global macroeconomic as climate change, and issuances in emerging-​ and market trends to inform decisions about market currencies to support capital-market future investments. IFC also regularly tests the development. Most of IFC’s lending is denomi- performance of the portfolio against possible nated in U.S. dollars, but we borrow in many macroeconomic developments to identify and currencies to diversify access to funding, proactively address risks. reduce borrowing costs, and support local On the project level, IFC actively monitors capital markets. compliance with investment agreements, visits Over the years, IFC’s funding program has sites to evaluate project status, and helps grown to keep pace with our lending — ​ in identify solutions to address potential problems. FY14, new borrowings totaled the equivalent We systematically track environmental and of $16 billion. social performance, and measure financial and development results. FY14 BORROWING IN INTERNATIONAL MARKETS For projects in financial distress, our Special Operations Department determines the Currency Amount ($ equivalent) Percent appropriate remedial actions. It seeks to negoti- U.S. dollar 7,045,478,231.10 52.5% ate agreements with creditors and shareholders Australian dollar 1,385,509,704.00 10.3% to share the burden of restructuring so problems Indian rupee 1,010,559,335.74 7.5% can be worked out while the project continues British pound 788,885,000.00 5.9% to operate. Japanese yen 627,325,000.00 4.7% Brazilian real 608,911,921.74 4.5% Euro 554,600,000.00 4.1% IFC Annual Report 2014 90 We assess IFC’s minimum capital require- LIQUIDITY MANAGEMENT ment in accordance with our economic capital framework, which is aligned with the Basel Liquid assets on IFC’s balance sheet totaled frame­ work and leading industry practice. $33.7 billion as of June 30, 2014, compared Economic capital acts as a common currency with $31.2 billion a year earlier. Most liquid of risk, allowing us to model and aggregate assets are held in U.S. dollars. The exposure the risk of losses from a range of different arising from assets denominated in currencies investment products as well as other risks. other than U.S. dollars are hedged into U.S. IFC’s total resources available consist dollars or matched by liabilities in the same of paid-in capital, retained earnings net of currency to eliminate overall currency risk. The designations and certain unrealized gains, and level of these assets is determined with a view total loan-loss reserves. The excess available to ensure sufficient resources to meet commit- capital, beyond what is required to support ments even during times of market stress. existing business, allows for future growth of our portfolio while also providing a buffer against unexpected external shocks. As of June 2014, CAPITAL ADEQUACY AND FINANCIAL CAPACITY total resources available reached $21.6 billion, while the minimum capital requirement totaled Sound risk management plays a crucial role in $18 billion. ensuring IFC’s ability to fulfill our development mandate. The very nature of IFC’s business, as a long-term investor in dynamic yet volatile emerging markets, exposes us to financial and operational risks. Prudent risk management and a solid capital position enable us to preserve our financial strength and play a countercyclical role during times of economic and financial turmoil. In addition, IFC’s financial strength results in low borrowing costs, allowing us to provide affordable financing to our clients. The soundness and quality of IFC’s risk management and financial position can be seen in our triple-A credit rating, which has been maintained since coverage began in 1989. 91 IFC Annual Report 2014 WORKING RESPONSIBLY better stakeholder relations. In situations where IFC’S APPROACH TO SUSTAINABILITY the Performance Standards cannot be applied appropriately, IFC has developed risk-screening In a time of climate change, resource scarcities, tools to achieve the objectives of the and rising social pressures, businesses face a Sustainability Framework. growing need for a stronger approach to envi- The IFC Performance Standards have ronmental, social, and governance issues. become globally recognized as a leading IFC believes that doing business sustain- benchmark for environmental and social risk ably drives positive development outcomes. management in the private sector. They are Our Sustainability Framework and advice help reflected in the Equator Principles, now used by clients find opportunities for growth and 78 financial institutions around the world. In innovation while promoting sound environmen- addition, other financial institutions also refer- tal and social practices, broadening our ence IFC’s Performance Standards in their development impact, and encouraging trans- including 15 European development policies — ​ parency and accountability. finance institutions and 32 export This framework articulates IFC’s strategic credit agencies. commitment to sustainable development and IFC clients continue to indicate that our is an integral part of our approach to risk man­ expertise is an important factor in their decision agement. It enables us to manage a diverse to work with us. Nearly 90 percent of the clients client base that includes both advisory and that received support from us on environmental investment clients  — ​ many of which are financial and social matters found our assistance to intermediaries. be helpful in improving relationships with stakeholders, strengthening brand value and recognition, and establishing sound risk-​ THE IFC PERFORMANCE STANDARDS management practices. When a project is proposed for financing, At the core of our Sustainability Framework IFC conducts a social and environmental are eight IFC Performance Standards that are review as part of our due diligence. This review designed to help clients avoid, mitigate, and takes into account the client’s assessment manage risk as a way of doing business sus- of the project’s impact and the client’s commit- tainably. They help clients devise solutions that ment and capacity to manage it. It also are good for business, good for investors, assesses whether the project adheres to the and good for the environment and communities. IFC Performance Standards. Where there This can include reducing costs through are gaps, we and the client agree on a plan to improved energy efficiency, increasing revenue ensure that the standards are met over time. and market share through environmentally and We supervise our projects throughout the life socially sound products and services, or forging of our investment. IFC Annual Report 2014 92 enhancing the governance of risk management, SUSTAINABILITY IN PRACTICE internal controls, and corporate disclosure. We work in close collaboration with In our activities across the globe, we consider the World Bank to ensure that regulation in four dimensions of sustainability — ​ fi nancial, emerging markets is developed using IFC’s economic, environmental, and social. Being frontline experience as an investor. As such, we financially sustainable enables IFC and our also advise regulators, stock markets’ adminis- clients to make a long-term contribution to trators, and others with an interest in improving development. Making our projects economically corporate governance. sustainable ensures that they contribute to the Our experience allows IFC to apply global host economies. principles to the realities of the private sector in Ensuring environmental sustainability in developing countries. As a result, development our clients’ operations and supply chains helps banks and other investors working in emerging protect and conserve natural resources, miti- markets now look to IFC for leadership on gate environmental degradation, and address corporate governance. the global challenge of climate change. We do this in a variety of ways  including — ​ IFC is the first international finance institu- through the IFC Corporate Governance tion to comprehensively incorporate the concept Methodology, a system for evaluating corporate of “ecosystem services.” These services benefit governance risks and opportunities that is people and businesses — ​ providing, among other recognized as the most advanced of its kind things, food, freshwater, and medicinal plants  — ​ among development finance institutions. This and underscore the economic and societal methodology is the basis for a coordinated benefits of maintaining a healthy environment. approach to corporate governance now imple- We support social sustainability by work- mented by more than 30 development ing to improve living and working standards, finance institutions. strengthen communities, consult with indige- IFC also helps strengthen local partners nous peoples, and respect issues relevant to who will continue to provide corporate gover- human rights. nance services over the long-term. This includes training materials and institution-building tools in the areas of corporate governance associa- CORPORATE GOVERNANCE tions, codes and scorecards, board leadership training, dispute resolution, the training of busi- Improving corporate governance is a priority for ness reporters, and implementation of good IFC. We provide investment support and advice governance practices in firms. on good practices for improving board effec- Strong corporate governance depends tiveness, strengthening shareholder rights, and on diversity in board leadership. We strive to increase the number of women who serve as 93 IFC Annual Report 2014 nominee directors on the boards of our clients. Our headquarters achieved a 37 percent Nearly 24 percent of IFC nominee directors are reduction in paper purchases — ​ over 5 million women. We are committed to increasing that sheets of paper  and a 26 percent reduction — ​ share to 30 percent by 2015. in toner purchases from FY13, mostly from behavior changes. In FY15, significant changes will be made to our headquarters’ print infra- OUR FOOTPRINT COMMITMENT structure through a Bank-Group-wide Managed Print Service to achieve more aggressive  IFC’s Footprint Commitment is to make sustain- savings. ability an integral part of our culture and way While IFC offices around the world of doing business. By continually improving our participated in the Paper Challenge through environmental and social performance, we activities such as “paper-free” days, the cam- commit to the same standards to which we ask paign demonstrated the need for more robust our clients to adhere. paper-use data from our country offices. IFC Our global approach to our Footprint is investigating software tools to increase the continued in FY14. Four of our largest country accuracy of our country office data collection. offices — ​ Istanbul, Johannesburg, New Delhi, In FY14, carbon emissions from IFC’s and Lima  — ​ undertook third-party energy effi- global internal business operations totaled ciency assessments. These reviews identified about 51,400 metric tons of carbon dioxide 10 potential improvement opportunities that equivalent. To offset our carbon footprint, IFC could yield annual savings of $90,000. The purchased carbon credits from the Paradigm cost of implementing these solutions would be Healthy Cookstove and Water Treatment recovered within three-and-a-half years. Project in Kenya. Our global Paper Challenge campaign encouraged all staff and offices to reduce paper use in FY14. The campaign was launched in response to EVP and CEO Jin-Yong Cai’s 15 percent global paper reduction challenge. FY13 CARBON EMISSIONS INVENTORY FOR IFC’S GLOBAL BUSINESS OPERATIONS Metric Tons of Carbon Dioxide Equivalent Business Travel 36,742.00 72% HQ Office Electricity 7,277.80 14% Country Office Electricity 4,191.48 8% Other 3,160.53 6% TOTAL EMISSIONS 51,371.80 100% IFC Annual Report 2014 94 INDEPENDENT ASSURANCE REPORT ON A SELECTION OF SUSTAINABLE DEVELOPMENT INFORMATION In response to a request made by IFC, we performed a review on a selection of sustainable development information in the Annual Report for the financial year ending June 30, 2014, including quantitative indicators (“the Indicators”) and qualitative statements (“the Statements”). We selected statements that were deemed to be of particular stakeholder interest, and involved a potential reputation risk for IFC, together with statements on corporate responsibility management and performance. The Indicators and the Statements are related to the following material areas: Material Areas Statements Indicators IFC Policy “Our Strategic Focus Areas” (p.60) “Our Governance” (pp. 84–85) “Our Staff” (pp. 82–83) “Portfolio Management” (p. 90) “The IFC Development Goals” (p. 75) Development “How We Measure Development Results” Investment projects Rated High: 64% (p. 76); overall effectiveness of (pp. 74–76) investment DOTS scores detailed by industry (p. 80), investments and “Investment Results” (pp. 76–77) by region (p. 80), and by performance area (p. 80); and advisory services weighted and unweighted DOTS scores (p. 29) “Advisory Results” (pp. 77–78) Advisory Projects Rated High: 76% (p. 77); and advisory program expenditures detailed by business line (p. 81) and by region (p. 81) Reach of IFC’s clients — ​ “Local Capital Markets  Promoting Economic Resilience” Employment (millions): 2.6 (p. 47) (p. 40) Patients reached (millions): 27.1 (p. 36) “Health and Education  Building Human Capital” — ​ Students reached (millions): 2.5 (p. 37) (p. 37) Farmers reached (millions): 2.9 (p. 38) Gas distribution (millions of persons reached): 39.8 (p. 33) Power distribution (millions of persons reached): 24.3 (p. 33) Water distribution (millions of persons reached): 30.3 (p. 33) Number and amounts of microfinance loans and SME loans for CY13 (p. 79) Type of loans Number of loans Amount (millions) ($ billions) Microloans 29.1 28.01 Small and 5.4 273.60 medium loans Environmental and “The IFC Performance Standards” (p. 92) IFC commitments by Environmental and social category social ratings “Employment — ​Creating Jobs — ​the Cornerstone (p. 28) of Development” (p. 46) Category Commitments Number of ($ millions) projects A 1,668 23 B 4,328 160 C 7,162 268 FI 201 12 FI-1 682 13 FI-2 2,049 85 FI-3 1,171 38 Total 17,261 599 95 IFC Annual Report 2014 Material Areas Statements Indicators Sustainable business “Climate Change  Turning Risks into Opportunity” — ​ Commitments in Climate-related investments for FY14 (p. 48) (p. 48): $2,479 million “Gender  The Transformative Power of Women” — ​ Carbon Emissions (p. 94): 51,400 tCO2 equivalent in (pp. 50–51) financial year 2014 “IFC Advisory Services” (pp. 67– 68) “Our Footprint Commitment” (p. 94) Influence on Private “Agribusiness — ​Strengthening Food Security” Sector Development (pp. 38 – 39) “Middle-Income Countries — ​Building Broad-Based Prosperity” (p. 56) — ​ “Infrastructure  Establishing a Robust Foundation for Prosperity” (p. 32) “Public-Private Partnerships  Improving Basic Services — ​ through PPPs” (p. 42) “Access to Finance  Raising Incomes and Creating — ​ Wealth” (pp. 34 – 35) Engagement in the “IDA and Conflict-Affected Areas  Creating Opportunity — ​ poorest and fragile in Challenging Environments” (p. 53) countries — ​ “Africa, South Asia, and the Middle East  Alleviating Poverty Wherever the Need is Greatest” (p. 54) Working with others — ​ “Mobilization  Leveraging the Resources of Other Investors” (pp. 44 – 45) “Partnerships” (p. 88) Asset management “IFC Asset Management Company” (p. 68) IFC Accountability “Independent Evaluation Group” (p. 86) IFC Annual Report 2014 96 Our review aimed to provide limited assur- NATURE AND SCOPE OF OUR REVIEW ance1 that: 1. the Indicators were prepared in We performed the following review to be able to accordance with the reporting criteria express a conclusion: applicable during fiscal year 2014 • We assessed the Reporting Criteria, (the “Reporting Criteria”), consisting policies and principles, with respect in IFC instructions, procedures and to their relevance, their completeness, guidelines specific to each indicator, their neutrality and their reliability. a summary of which is provided in • We reviewed the content of the Annual the Annual Report, for the indicators Report to identify key statements related to Commitments by regarding the sustainability and devel- Environmental and Social Category opment areas listed above. (p. 28) and Development effectiveness • At the corporate level, we conducted of investments and advisory services interviews with more than 25 persons (Monitoring and tracking results, responsible for reporting to assess the pp. 74 – 75) and on IFC’s website for application of the Reporting Criteria or the others. to substantiate the Statements. 2. the Statements have been presented • At the corporate level, we implemented in accordance with “IFC’s Access to analytical procedures and verified, Information Policy”, which is available on a test basis, the calculations and the on IFC’s website2 and the principles consolidation of the Indicators. of relevance, completeness, neutrality, • We collected supporting documents clarity and reliability as defined by for the Indicators or Statements, such international standards3. as reports to the board of directors or It is the responsibility of IFC to prepare the other meetings, loan agreement, internal Indicators and Statements, to provide informa- and external presentations and reports, tion on the Reporting Criteria and to compile or survey results. the Annual Report. • We reviewed the presentation of the It is our responsibility to express a conclu- State­ments and the Indicators in sion on the Indicators and the Statements the Annual Report and the associated based on our review. Our review was conducted notes on methodology. in accordance with the ISAE 3000, International Standard on Assurance Engagements from IFAC4. Our independence is defined by IFAC professional code of ethics. 1. A higher level of assurance would have required more extensive work. 2. http://www.ifc.org/ifcext/disclosure.nsf/content/disclosure_policy 3. ISAE 3000 from IFAC, Global Reporting Initiative (GRI), or AA1000 Accountability Standard. 4. ISAE 3000: “Assurance Engagement other than reviews of historical data”, International Federation of Accountants, International Audit and Assurance Board, December 2003. 97 IFC Annual Report 2014 Also, the scope of indicators to assess the LIMITATIONS OF OUR REVIEW Private Sector Development performance area Our review was limited to the Statements and of DOTS should be broadened to better reflect Indicators identified in the table above and did the impact on final beneficiaries over the life not cover other disclosures in the Annual Report. cycle of the projects. Our tests were limited to document IFC is committed to enhancing the rele- reviews and interviews at IFC’s headquarters vance of its development results and Reach in Washington, D.C. Within the scope of work related procedures on a continuous basis. There covered by this statement, we did not partici- is indeed work in progress on several issues, pate in any activities with external stakeholders including the link between E&S DOTS perfor- or clients, nor did we conduct testing or mance area and Performance Standards interviews aimed at verifying the validity of implementation and the harmonization of the information related to individual projects. Private Sector Development (PSD) indicators amongst IFIs. This work should enable IFC to cover the related issues in the coming years. INFORMATION ABOUT THE REPORTING CRITERIA Completeness AND THE STATEMENT PREPARATION PROCESS The Indicators’ reporting perimeter covers the With regards to the Reporting Criteria and the most relevant IFC activities. The scope covered Statement preparation policies and principles, by each indicator has been indicated in the we wish to make the following comments: comments next to the data in the Annual Report. In particular, while the DOTS results of IFC’s Relevance Trade Finance investments are not yet formally IFC presents sustainability information on its audited, a first set of Reach data has been own impact and on environmental and social consolidated this year to reflect the impact of risks, impacts and outcomes of projects it the Global Trade Finance Program. The related financed directly or through financial intermedi- figures have been submitted to controls inter- aries. The development results of IFC Investment nally and are presented in the Reach data table and Advisory Services are assessed through its (p. 79). Development Outcome Tracking System (DOTS), the implementation of its evaluation Neutrality and clarity strategy and of IFC Development Goals. IFC provides information on the methodologies In the Environmental and Social (E&S) used to establish the Indicators in the comments DOTS performance area, we note that IFC next to the published data or in the related would benefit from further improving the rele- sections. Further information is available on the vance and number of indicators, beyond the IFC website. E&S management system indicator, in order to We think that the link between Reach better measure how clients are improving their indicators and IFC Development Goals (IDGs) own E&S performance. IFC Annual Report 2014 98 should be strengthened to enable IFC to further CONCLUSION articulate its strategy and development results. While the Reach Indicators capture the contri- Based on our review, nothing has come to our bution of IFC Clients overall, IFC captures its attention that causes us to believe that: contribution to development results via the • the Indicators were not established, in IDGs. Reporting achievement against the IDGs all material aspects, in accordance with would help to improve IFC’s reporting regarding the Reporting Criteria; its contribution and development results. • the Statements were not presented, in all material aspects, in accordance Reliability with “IFC’s Policy on Disclosure IFC has further strengthened internal controls of Information” and the principles of on “micro loans” and “small & medium loans” relevance, completeness, neutrality, (MSME Reach indicators). Regarding the other clarity and reliability as defined by Reach indicators, in addition to the controls international standards. performed at the corporate and project level, IFC should implement further checks at the source Paris-La Défense, France, August 4, 2014 or client-level used to track Reach indicators. As this data often comes directly from external The independent auditors sources, and can sometimes be based on ERNST & YOUNG et Associés estimates rather than clients’ audited financial statements, it is essential to ensure that data reported are consistent with IFC’s own definitions and calculation methodologies. Additional tests on a few major contributors of the Reach data should be performed to increase data reliability. Eric Duvaud Partner, Cleantech and Sustainability 99 IFC Annual Report 2014 FINANCIAL SUMMARY The overall market environment has a significant influence on IFC’s financial performance. The main elements of IFC’s net income and comprehensive income and influences on the level and variability of net income and comprehensive income from year to year are: Elements Significant Influences Net income: Yield on interest earning assets Market conditions including spread levels and degree of competition. Nonaccruals and recoveries of interest on loans formerly in nonaccrual status and income from participation notes on individual loans are also included in income from loans. Liquid asset income Realized and unrealized gains and losses on the liquid asset portfolios, which are driven by external factors such as: the interest rate environment; and liquidity of certain asset classes within the liquid asset portfolio. Income from the equity investment portfolio Global climate for emerging markets equities, fluctuations in currency and commodity markets and company-specific performance for equity investments. Performance of the equity portfolio (principally realized capital gains, dividends, equity impairments, gains on non-monetary exchanges and unrealized gains and losses on equity investments). Provisions for losses on loans and guarantees Risk assessment of borrowers and probability of default and loss given default. Other income and expenses Level of advisory services provided by IFC to its clients, the level of expense from the staff retirement and other benefits plans, and the approved administrative and other budgets. Gains and losses on other non-trading financial instruments Principally, differences between changes in fair values of borrowings, including accounted for at fair value IFC’s credit spread, and associated derivative instruments and unrealized gains associated with the investment portfolio including puts, warrants and stock options which in part are dependent on the global climate for emerging markets. These securities are valued using internally developed models or methodologies utilizing inputs that may be observable or non-observable. Grants to IDA Level of the Board of Governors-approved grants to IDA. Other comprehensive income: Unrealized gains and losses on listed equity investments Global climate for emerging markets equities, fluctuations in currency and debt securities accounted for as available-for-sale and commodity markets and company-specific performance. Such equity investments are valued using unadjusted quoted market prices and debt securities are valued using internally developed models or methodologies utilizing inputs that may be observable or non-observable. Unrecognized net actuarial gains and losses and Returns on pension plan assets and the key assumptions that underlay unrecognized prior service costs on benefit plans projected benefit obligations, including financial market interest rates, staff expenses, past experience, and management’s best estimate of future benefit cost changes and economic conditions. IFC Annual Report 2014 100 Net unrealized losses on non-trading financial NET INCOME instruments accounted for at fair value totaled $43 million in FY14 (net gains of $441 million IFC reported income before net unrealized in FY13 and net losses of $355 million in FY12) gains and losses on non-trading financial resulting in income before grants to IDA of instruments accounted for at fair value and $1,739 million in FY14, as compared to grants to IDA of $1,782 million in FY14, as $1,350 million in FY13 and $1,658 million in compared to $909 million in the year ended FY12. Grants to IDA totaled $251 million in June 30, 2013 (FY13) and $2,013 million in the FY14, as compared to $340 million in FY13 year ended June 30, 2012 (FY12). and $330 million in FY12. Net gains attribut- The increase in income before net unreal- able to non-controlling interests totaled ized gains and losses on non-trading financial $5 million in FY14 ($8 million losses in FY13 instruments accounted for at fair value and and $0 in FY12). Accordingly, net income grants to IDA in FY14 when compared to FY13 attributable to IFC totaled $1,483 million in FY14, and in FY13 when compared to FY12 was princi- as compared with $1,018 million in FY13 and pally as a result of the following (US$ millions): $1,328 million in FY12. Increase (decrease) IFC’s net income for each of the past five FY14 vs FY13 fiscal years ended June 30, 2014 is presented Higher gains on equity investments below (US$ millions): and associated derivatives, net 336 $ Lower other-than-temporary impairments NET INCOME (LOSS) on equity investments and debt securities 206 For the years ended June 30 (US$ millions) Lower provisions for losses on loans, guarantees and other receivables 155 2010 1,746 Higher income from liquid asset 2011 1,579 trading activities 99 2012 1,328 Other, net 77 2013 1,018 Overall change $ 873 2014 1,483 101 IFC Annual Report 2014 The table below presents selected financial data for the last five fiscal years (in millions of US dollars, except where otherwise stated): As of and for the Years Ended June 30 2014 2013 2012 2011 2010 Consolidated income highlights: Income from loans and guarantees, realized gains and losses on loans and associated derivatives $ 1,065 $ 996 $ 993 $ 802 $ 759 (Provision) release of provision for losses on loans & guarantees (88) (243) (117) 40 (155) Income from equity investments and associated derivatives 1,289 732 1,548 1,601 1,595 Income from debt securities and realized gains and losses on debt securities and associated derivatives 89 69 71 67 89 Income from liquid asset trading activities 599 500 313 529 815 Charges on borrowings (196) (220) (181) (140) (163) Other income 461 441 448 222 176 Other expenses (1,418) (1,401) (1,207) (981) (853) Foreign currency transaction gains (losses) on non-trading activities (19) 35 145 (33) (82) Income before net unrealized gains and losses on non-trading financial instruments accounted for at fair value and grants to IDA 1,782 909 2,013 2,107 2,181 Net unrealized gains and losses on non-trading financial instruments accounted for at fair value (43) 441 (355) 72 (235) Income before grants to IDA 1,739 1,350 1,658 2,179 1,946 Grants to IDA (251) (340) (330) (600) (200) Net income 1,488 1,010 1,328 1,579 1,746 Less: Net (gains) losses attributable to non-controlling interests (5) 8 – – – Net income attributable to IFC $ 1,483 $ 1,018 $ 1,328 $ 1,579 $ 1,746 IFC Annual Report 2014 102 As of and for the Years Ended June 30 2014 2013 2012 2011 2010 Consolidated balance sheet highlights: Total assets $ 84,130 $ 77,525 $ 75,761 $ 68,490 $ 61,075 Liquid assets, net of associated derivatives 33,738 31,237 29,721 24,517 21,001 Investments 38,176 34,677 31,438 29,934 25,944 Borrowings outstanding, including fair value adjustments 49,481 44,869 44,665 38,211 31,106 Total capital $ 23,990 $ 22,275 $ 20,580 $ 20,279 $ 18,359 Of which Undesignated retained earnings $ 20,002 $ 18,435 $ 17,373 $ 16,032 $ 14,307 Designated retained earnings 194 278 322 335 481 Capital stock 2,502 2,403 2,372 2,369 2,369 Accumulated other comprehensive income (AOCI) 1,239 1,121 513 1,543 1,202 Non-controlling interests 53 38 – – – Financial ratios:a Return on average assets (GAAP basis)b 1.8% 1.3% 1.8% 2.4% 3.1% Return on average assets (non-GAAP basis)c 1.8% 0.9% 2.8% 1.8% 3.8% Return on average capital (GAAP basis)d 6.4% 4.8% 6.5% 10.1% 8.2% Return on average capital (non-GAAP basis)e 6.5% 3.1% 9.9% 11.8% 6.0% Overall liquidity ratiof 78% 77% 77% 83% 71% External funding liquidity levelg 359% 309% 327% 266% 190% Debt to equity ratioh 2.7:1 2.6:1 2.7:1 2.6:1 2.2:1 Total reserves against losses on loans to total disbursed portfolioi 6.9% 7.2% 6.6% 6.6% 7.4% Capital measures: Total Resources Required ($ billions)j 18.0 16.8 15.5 14.4 12.8 Total Resources Available ($ billions)k 21.6 20.5 19.2 17.9 16.8 Strategic Capitall 3.6 3.8 3.7 3.6 4.0 Deployable Strategic Capitalm 1.4 1.7 1.8 1.8 2.3 Deployable Strategic Capital as a percentage of Total Resources Available 7% 8% 9% 10% 14% a. Certain financial ratios, as described below, are calculated excluding the effects of unrealized gains and losses on investments, other non-trading financial instruments, AOCI, and impacts from consolidated Variable Interest Entities (VIEs). b. Net income for the fiscal year as a percentage of the average of total assets at the end of such fiscal year and the previous fiscal year. c. Net income excluding unrealized gains and losses on certain investments accounted for at fair value, income from consolidated VIEs, and net gains and losses on non-trading financial instruments accounted for at fair value, as a percentage of total disbursed loan and equity investments (net of reserves) at cost, liquid assets net of repos, and other assets averaged for the current period and previous fiscal year. d. Net income for the fiscal year as a percentage of the average of total capital (excluding payments on account of pending subscriptions) at the end of such fiscal year and the previous fiscal year. e. Net income excluding unrealized gains and losses on certain investments accounted for at fair value, income from consolidated VIEs, and net gains and losses on non-trading financial instruments accounted for at fair value, as a percentage of paid in share capital and retained earnings (before certain unrealized gains and losses and excluding cumulative designations not yet expensed) averaged for the current period and previous fiscal year. f. IFC’s overall Liquidity Policy states that the Corporation would at all times maintain a minimum level of liquidity, plus undrawn borrowing commitments from the IBRD, that would cover at least 45% of the next three years’ estimated net cash requirements (target range of 65-95%). g. IFC’s objective is to maintain a minimum level of liquidity, consisting of proceeds from external funding to cover at least 65% of the sum of (i) 100% of committed but undisbursed straight senior loans; (ii) 30% of committed guarantees; and (iii) 30% of committed client risk management products. As of FY13 Q3, IFC’s management decided to modify the External Funding Policy by eliminating the cap on the operational range of 65% to 85%. h. Leverage (Debt/equity) ratio is defined as the number of times outstanding borrowings plus outstanding guarantees cover paid-in capital and accumulated earnings (net of retained earnings designations and certain unrealized gains/losses). i. Total reserves against losses on loans to total disbursed loan portfolio is defined as reserve against losses on loans as a percentage of the total disbursed. j. The minimum capital required consistent with the maintenance of IFC’s AAA rating. It is computed as the aggregation of risk-based economic capital requirements for each asset class across the Corporation. k. Paid in capital plus retained earnings net of designated retained earnings plus general and specific reserves against losses on loans. This is the level of available resources under IFC’s risk-based economic capital adequacy framework. l. Total resources available less total resources required. m. 90% of total resources available less total resources required. 103 IFC Annual Report 2014 COMMITMENTS In FY14, total commitments were $22,404 million, compared with $24,853 million in FY13, a decrease of 10%, of —  which IFC commitments totaled $17,261 million ($18,349 million  F Y13) and Core Mobilization totaled $5,143 mil- lion ($6,504 million — F Y13). FY14 and FY13 commitments and Core Mobilization comprised the following (US$ millions): FY 14 FY 13 Total commitments1 $ 22,404 $ 24,853 IFC commitments Loans $ 7,579 $ 8,520 Equity investments 2,324 2,732 Guarantees: Global Trade Finance Program 7,007 6,477 Other 321 482 Client risk management 30 138 Total IFC commitments $ 17,261 $ 18,349 Core Mobilization Loan participations, parallel loans, and other mobilization Loan participations $ 2,043 $ 1,829 Parallel loans 730 1,269 Managed Co-lending Portfolio Program 320 – Other mobilization 606 480 Total loan participations, parallel loans and other mobilization $ 3,699 $ 3,578 AMC Equity Capitalization Fund $ 7 $ 214 Sub-debt Capitalization Fund 516 209 ALAC Fund 84 210 Africa Capitalization Fund – 92 Russian Bank Cap Fund 2 43 Catalyst Funds 75 – Global Infrastructure Fund 146 – Total AMC $ 830 $ 768 Other initiatives Global Trade Liquidity Program and Critical Commodities Finance Program $ 500 $ 1,096 Public Private Partnership 114 942 Infrastructure Crisis Facility – 110 Debt & Asset Recovery Program – 10 Total other initiatives $ 614 $ 2,158 Total Core Mobilization $ 5,143 $ 6,504 Core Mobilization Ratio 0.30 0.35 Core Mobilization Ratio  — For each dollar that IFC committed, IFC mobilized (in the form of loan participations, parallel loans, other mobilization, the non-IFC portion of structured finance and the non-IFC commitments in Initiatives, and the non-IFC investments committed in funds managed by AMC) $0.30 in FY14 ($0.35 in FY13). Beginning in FY15, IFC plans to change its current practice of reporting the cumulative commitment volume of its short-term finance (STF) business over the course of a fiscal year, and then aggregating that with its long-term finance (LTF) commitment volumes to reporting STF business based on the average annual outstanding portfolio of its STF business in a fiscal year, and report that separately from its LTF business. Had the new practice been applied to FY14, GTFP and GTSF, included in loans and guarantees, would have been lower by $4.3 billion in FY14 (lower by $4.6  billion — F Y13). 1 Debt security commitments are included in loans and equity investments based on their predominant characteristics. IFC Annual Report 2014 104 AMC The activities of the funds managed by AMC at June 30, 2014 and June 30, 2013 can be summarized as follows (US$ millions unless otherwise indicated): Equity Sub-Debt Africa Russian Global Capitaliza- Capitaliza- ALAC Capitaliza- Bank Cap Catalyst Infrastruc- tion Fund tion Fund Fund tion Fund Fund Funds ture Fund Total Assets under management as of June 30, 2014 $1,275 $1,725 $1,000 $182 $550 $418 $1,200 $6,350 From IFC 775 225 200 – 250 75 200 1,725 From other investors 500 1,500 800 182 300 343 1,000 4,625 For the year ended June 30, 2014 Disbursements from investors to Fund: From IFC 8 77 21 – 9 3 32 150 From other investors 5 514 83 3 10 15 165 795 Disbursements made by Fund 21 544 89 – 4 12 172 842 Disbursements made by Fund (number) 3 8 9 – 2 17 6 45 Equity Sub-Debt Africa Russian Global Capitaliza- Capitaliza- ALAC Capitaliza- Bank Cap Catalyst Infrastruc- tion Fund tion Fund Fund tion Fund Fund Funds ture Fund Total Assets under management as of June 30, 2013 $1,275 $1,725 $1,000 $182 $550 $282 $500 $5,514 From IFC 775 225 200 – 250 75 100 1,625 From other investors 500 1,500 800 182 300 207 400 3,889 For the year ended June 30, 2013 Disbursements from investors to Fund: From IFC 336 33 63 – 38 1 1 472 From other investors 217 223 252 94 46 2 3 837 Disbursements made by Fund 546 249 297 91 78 – – 1,261 Disbursements made by Fund (number) 7 5 12 4 2 – – 30 105 IFC Annual Report 2014 onnecte LETTER TO THE BOARD OF GOVERNORS The Board of Directors of IFC has had this annual report prepared in accordance with the Corporation’s by-laws. Jim Yong Kim, President of IFC and Chairman of the Board of Directors, has submitted this report with the audited financial statements to the Board of Governors. The Directors are pleased to report that, for the fiscal year ended June 30, 2014, IFC expanded its sustainable development impact through private sector investments and advice. IFC Annual Report 2014 106 STAY CONNECTED Web and Social Media Resources IFC’s website, www.ifc.org, IFC Online Photography: Cover: Illusion CGI Studio IFC website provides comprehensive ifc.org Insert: Ray Rayburn/WB Photolab Page 2: Iwan Bagus information on every aspect Annual Report Page 6: Illusion CGI Studio Page 8: GS/Gallery Stock of our activities. It includes ifc.org/AnnualReport Page 9: Amani Willett/ Gallery Stock contact information for offices Social Media Index Page 10: Kurt Stallaert/ ifc.org/SocialMediaIndex Gallery Stock worldwide, news releases Page 11: Richard Hamilton Smith/ Facebook Gallery Stock and feature stories, data on facebook.com/IFCwbg Page 12: Steve Cole/Getty Page 13: Will Sanders/Getty results measurement, disclosure Twitter Page 14: Christian Kober/Getty Page 15: GS/Gallery Stock documents for proposed twitter.com/IFC_org Page 16: GS/Gallery Stock Page 17: Tom Nagy/Gallery Stock investments, and key policies LinkedIn Page 18: Leren Lu/Getty on.ifc.org/ifcLinkedIn and guidelines. Page 19: Catherine Hyland/ Gallery Stock Google+ Page 20: Gallery Stock: Jens gplus.to/IFCwbg The online version of IFC’s Goerlich (2), Peter Guenzel; Cityscape Digital; Panos: Scribd Annual Report 2014 provides scribd.com/IFCpublications Georg Gerster, Qilai Shen Getty: Fuse; World Bank: downloadable PDFs of all YouTube Imal Hashemi/Taimani Films, UNICEF Burundi/ materials in this volume and youtube.com/IFCvideocasts Colfs, John Hogg, Graham Crouch, Scott Wallace translations as they become Credits Page 22: Iwan Bagus Page 30: Bridge International available. It is available at IFC Annual Report Team: Bruce Moats Academies Page 31: Kruno Blažinovi, ECOM www.ifc.org/ annualreport. The Director, External and Corporate Coffee, Joseph Rebello Relations, World Bank Group Page 32: Seven Energy website also provides more Lisa Kopp Page 34: Fedecredito Page 35: Finca Afghanistan information on sustainability, Head, Brand Management Page 36: Bridge International Joseph Rebello Academies including a Global Reporting Chief Editor Page 38: Del Campo; Richard Caines (inset) Initiative index. 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