Israeli companies have much to gain from investing in private-sector development
in poor countries, according to a senior representative of the World Bank
Group’s International Finance Corporation.
In addition to the obvious
financial rewards, there is also the added value of helping to boost employment
and services in countries that need such assistance, Oliver Griffith, head of
communications for IFC’s Western Europe office, told The Jerusalem Post during a
visit to Israel Tuesday. Griffith, who was here to participate in the annual
Agritech conference in Tel Aviv, said he hoped to attract interest from local
clean-tech and agriculture firms.
The International Finance Corporation
was established in 1956 and is the largest multilateral source of loan and
equity financing for private-sector projects in the developing world.
finances and provides advice for private-sector ventures in partnership with
private investors and, through advisory work, helps governments create
conditions that stimulate the flow of both domestic and foreign private savings
IFC investments have more than doubled since 2005. The
IFC invested a record $19 billion in more than 500 projects in 102 countries in
2011, including $6.5b. mobilized from other investors. Advisory services project
expenditures totaled $207 million across 642 projects with an approved value of
The organization has had relatively limited experience with
Israeli sponsors since first working with a partner here in 1974. Overall, it
has provided financing of $186.4m. plus syndications of $107.4m. to support 18
Israeli projects in 14 countries. Sixty percent of those projects have been in
the manufacturing and services industry, with the remainder in infrastructure
and financial markets.
Two partnerships with Israeli companies are still
ongoing. Archimedes Global launched a project in 2011, with a $3m. IFC
investment, to support the development of the health insurance sector in Eastern
Europe and Central Asia. Home Center began a $138.5m. project in 2008, supported
by a $67m. IFC loan package, to develop a chain of do-it-yourself stores in
In 2003, the IFC partnered with leading Israeli construction and
engineering company Ashtrom to support the second phase of the redevelopment and
expansion of Jamaica’s Sangster International Airport. In 1997, it supported
Ormat Industries’ project to build, operate and own a 24-MW geothermal power
project in Guatemala’s Quetzaltenango Province.
Griffith said the IFC
would welcome interest from Israeli companies from all industries, provided
their projects are commercially viable. But he warned that his organization
expects partners to comply with eight strict performance standards that deal
with environmental impact, labor conditions, health and safety, land
acquisition, indigenous rights and cultural heritage.
“Sometimes it is
difficult to work with the IFC because of our strict performance standards,”
“[But] a lot of companies want to work with us because of
those standards, because they know that if we do the environmental due
diligence, they won’t have problems when they invest. For example, if you have a
mining project, and you cut off the top of a sacred mountain and the population
goes against it, the mine can end up shutting down and the company can lose