The IFC, founded in 1956, is the World Bank Group’s private-sector arm. IFC’s stated purpose is to further economic development by encouraging the growth of productive private enterprise in member countries, particularly in the less developed countries. In this way, the IFC complements the activities of the World Bank (WB), which constitutes the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).
As part of the WBG, IFC seeks to end extreme poverty and boost shared prosperity on a livable planet, reinforced by its institutional strategy IFC 3.0, introduced in 2016. IFC has worked toward these goals through direct investment (investment services (IS)) as well as the mobilisation of capital from other lenders and investors. It also offers advisory services (AS) to businesses and governments to build capacity and encourage private investment and works “upstream” to create the conditions that unlock investment opportunities in member countries. As the largest private sector-facing MO, IFC also has a leadership role in establishing international standards for impact investment among International Financial Institutions (IFIs) and disseminating knowledge from its global operations.
Implementing IFC 3.0 has required a fundamental reshaping of IFC’s business model over the course of the assessment period. These include:
(i) Introduction of new organisational structures and analytical products to identify opportunities to promote private sector-led development;
(ii) Creation of new tools and processes to promote a focus on development impact and promote investment in challenging markets, such as the Anticipate Impact Monitoring and Measurement (AIMM) framework;
(iii) Introduction of upstream work and IFC Country Strategies and Country-driven budgeting to help identify and expand bankable investments in challenging markets;
(iv) An enhanced focus on blended finance and private capital mobilisation, including through the IDA Private Sector Window; and
(v) A realignment of staff, resources and corporate results frameworks to the renewed strategic vision, including greater decentralisation of staff and changes to investment decision-making processes.
MOPAN's 2023 assessment takes stock of how IFC has implemented IFC 3.0, identifying some areas of opportunity going forward. These include enhancing the efficiency of investment decision-making, harnessing AIMM to assess results for global themes, strengthening client grievance mechanisms and creating a more supportive organisational culture for WBG collaboration to support an enabling investment environment in IFC's member countries.
