The 2018-2020 Strategy 3.0 of the World Bank Group’s International Finance Corporation (IFC) launches New Platforms to Create Markets; New Institutions; New Tools; and a new internal organization. It will be important to watch the development of one IFC platform -- the Managed Co-Lending Portfolio Program – since it is spearheading efforts to create infrastructure as an asset class.
As the cascade is implemented, the IFC Financial Intermediary portfolio is also important to watch. As described by Inclusive Development International (IDI), IFC funneled $50 billion into financial intermediaries (FI) such as commercial banks, private equity funds and hedge funds between 2010 and 2015, but audits show how little is known about the impacts of these investments. And, lax supervision by IFC of its FI operations resulted in FIs financing projects that IFC would not finance for its own account, such as investments in coal.
The World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) – continues its rapid expansion of products to attract the private sector with political risk insurance (PRI) and credit enhancement products. MIGA’s 2018-2020 strategy describes expanding the issuance of these products in Fragile and Conflict-Affected States (FCS) and for climate change mitigation and adaptation. By 2020, 28% of its new issuances would be climate-related.
Different types of guarantees, which transfer risk from the private to public sector, are in fashion.
The project bond has been certified as a “green and social bond” by Vigeo EIRIS.