IFC’s Billion Dollar Milestone in the Middle East and North Africa: Creating Opportunities, Addressing Challenges
IFC, the private sector arm of the World Bank Group, recently announced new transactions that take its annual investments in the Middle East and North Africa to over the $1 billion mark for the first time. To support private sector–led growth in the region, IFC is pursuing new investment opportunities and expanding advisory services to improve the business-enabling environment.
With the recent announcements of a $70 million loan to the Arabian Yemen Cement Company and a $40 million loan and a 5 percent equity stake in Omar Effendi, Egypt’s recently privatized retail chain, IFC’s investments in the region reached $1.2 billion in fiscal 2007.
Lars Thunell, IFC Executive Vice President and CEO, said, “The Middle East and North Africa is a strategic region for IFC. Our investments and advisory services create new jobs, addressing the main challenge in a region with high unemployment. Our projects demonstrate the opportunities that the private sector can provide. Moving forward, we will continue to support private sector investments in the region and continue to work with the region’s governments to help create a business environment that attracts further private sector capital.”
IFC has increased its local presence to address gaps in the region’s markets. IFC’s strategy in the Middle East and North Africa focuses on improving the business environment, facilitating companies’ access to finance, and encouraging private sector involvement in infrastructure. IFC also supports the cross-border emergence of regional champions as they invest in less developed countries across the region. Priorities include reducing the constraints the private sector faces in conflict-affected and frontier countries. Through the Lebanon Reconstruction Program, for example, some 3000 local companies will get new loans for working capital, expansion, and other needs; the program fulfills a pledge IFC made at a Lebanon donor meeting in January 2007. In frontier countries—high-risk or low income economies—IFC has helped establish numerous microfinance institutions, for example Pakistan’s Tameer Bank, which has over 30,000 clients.
“IFC is showing that improvements in the region’s postconflict countries and other difficult markets can have a significant development impact. This can be done commercially and prudently, in collaboration with like-minded partners,” said Michael Essex, IFC Director for the Middle East and North Africa. “The region’s future growth and its capacity to create meaningful jobs for young people depend on a sustained commitment to improving the business climate and opening sectors to private sector investment,” he added.
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