IFC’S ROLE AND ADDITIONALITY:
IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. By promoting open and competitive markets and providing investment and advisory support to private sector clients, we seek to create opportunities for progress in emerging markets. We help people work, prosper, and live better and longer lives. We aim to maximize our role and additionality so that IFC has a stronger development impact.
What is IFC’s Additionality?
IFC is uniquely positioned to make a difference for the many people at the base of the global economic pyramid. We are the largest multilateral financial institution investing in private enterprises in emerging markets, with activities in 130 countries. We combine financing that helps local businesses grow quickly and sustainably with advice that helps them innovate, raise standards, mitigate risk, and share knowledge across industries and regions. Our affiliation with the World Bank Group gives us additional leverage in terms of skills and experience. We call this unparalleled set of comparative advantages our “additionality.” It is the main reason our clients choose to work with us.
Objective and Rationale:
The objective of this primer is to help assess and communicate IFC’s role and additionality more systematically and effectively, to our clients externally and to our Board and Senior Management internally. The primer provides a systematic thought process and a framework to identify and assess IFC’s role, additionality, and development impact throughout the project cycle, from business development to supervision. It does not, however, provide an all-inclusive list of every factor contributing to development impact and additionality, as each client or project has its own unique characteristics and needs. The approach taken in the primer can be summarized by the following questions: 1. Why have we chosen to work with this client? 2. Can you put the project into a larger context, in relation to IFC and World Bank strategies and other projects in the country or sector? 3. What is IFC’s additionality for our client in this project? Is our money really needed? Why is the private sector not willing or able to undertake this project on its own? What risks are we taking that others are not? What services are we providing that commercial financiers are not? Figure 1 illustrates the conceptual framework for IFC’s additionality, with the emphasis on how this affects client selection as well as development impact. The main sections of the primer outline how to identify and describe IFC’s additionality.
Updated: May 7, 2009
FIGURE 1: IFC’S ROLE AND ADDITIONALITY – CONCEPTUAL FRAMEWORK
Maximizing our additionality through strategic selection of the client or project will lead to a stronger development impact. Why has this client chosen to work with us? Describe IFC’s additionality.
Why have we chosen to work with this client?
Put the client/project in a larger, strategic context.
IFC’s Client Strategy
1. What is the client’s strategy given the country and sector context? 2. What does the client need to implement its strategy successfully? 3. Why is the private sector not willing to undertake this project on its own? Why is there a need for IFC?
Why do we want to work with
How does this client or project
help IFC achieve our own country
/ department / sector strategy?
How does the relationship with
this client fit with WBG strategy?
The Role of Commercial Financiers
What do commercial financiers
offer this client?
The Role of Commercial
The Role of IFC
What do we offer to this client?
a) Risk mitigation; b) knowledge/innovation;
c) standard setting; or d) policy work.
IFC Country & Sector Strategy
What is IFC’s strategy in the country / sector?
What has IFC done so far in the country /...
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