IFC has made important gains supporting private sector-led growth to support sustainable development in most challenging contexts
22/01/2024 - Washington, D.C. Private sector-led development is imperative to deliver sustainable development results at scale and address climate change and other global challenges. The International Finance Corporation (IFC)’s institutional vision, IFC 3.0, has been instrumental in positioning IFC to create markets, crowd-in finance and deliver development results, according to a recent assessment report from the Multilateral Organisation Performance Assessment Network (MOPAN).
MOPAN’s assessment of the IFC’s organisational performance — launched today with the World Bank Group Executive Board in Washington, DC. — looks closely at IFC's institutional transformation to implement IFC 3.0 and pivot to creating markets. The report tells the story of IFC's transformation, including the introduction of new teams, tools, processes and instruments such as the “upstream approach” and IDA Private Sector Window. Despite a highly uncertain global context caused by the COVID-19 pandemic and the war in Ukraine, IFC's transformation is now yielding results, including new investment and mobilisation in the most difficult contexts. Notably, IFC’s investments in fragile and conflict-affected states have nearly tripled over the assessment period.
“MOPAN's assessment of IFC demonstrates the importance of the private sector in contributing to sustainable development, harnessing the private sector to identify solutions to the most pressing global issues as governments face mounting fiscal pressures”, said Suzanne Steensen, Head of the MOPAN Secretariat.
The report highlights IFC's role as a leader among Development Financial Institutions in a number of important areas, including private capital mobilisation, blended finance, transparency and management of environmental and social risk. In particular, the report highlights innovative approaches introduced to facilitate IFC’s pivot toward creating markets, including the introduction of the upstream approach, the Anticipated Impact Monitoring and Measurement (AIMM), Country Private Sector Diagnostics (CPSDs) and country-driven budgeting, among others. IFC's Performance Standards, through the Equator Principles, remain the de facto standards for the management of environmental and social risks in private sector operations. Their strategic approach to working in partnership to harmonise approaches and promote good practices is a model for wider Multilateral Development Bank (MDB) coordination going forward.
However, implementing IFC 3.0 in an uncertain global context has had some implications for their performance. IFC exceeded its budget control targets due to resource needs to deliver institutional changes alongside lower than expected loan and fee income. Growth in mobilisation and the investment portfolio was slower than expected. As the impact of the COVID-19 pandemic and the war in Ukraine subsides, IFC is now starting to see the full results of its transformation. These include a growing pipeline of upstream engagements to create markets, strong growth in commitments in challenging contexts and record levels of mobilisation. These positive achievements have been complemented by steady improvement in development outcomes and consistently high levels of client satisfaction with the services IFC delivers.
[more findings available for download, below]
The MOPAN assessment of IFC comes after a recent MOPAN assessment of the World Bank Group, released last year in conjunction with the Bank’s Evolution Roadmap.
For further information on MOPAN, or about this MOPAN Assessment of IFC and the World Bank, please contact: Cara.YAKUSH@mopanonline.org.