1. SUSTAINABLE VALUE CHAIN
FINANCE

2. IFC – over $100 Billion Invested in
Emerging Markets since 1956
 Largest multilateral source of loan/equity
financing for the emerging markets private IFC FY10 Highlights
sector
Portfolio * $48.8 billion
 Founded in 1956 with 182 member countries Committed * $18.0 billion
Mobilized $ 5.3 billion
 AAA rated by S&P and Moody’s
# of companies 1776
 Provides financing (equity, quasi-equity, # of countries (portfolio) 129
loans, risk management and local currency # of countries (committed) 104
products) and advisory services
* Includes for IFC’s own account and mobilization
 Takes market risk with no sovereign Advisory Services $300 m
guarantees
Composition of FY10 Transaction Volume
 Promoter of environmental, social, and Sub-Saharan
Middle East &
Africa Global
corporate governance standards N.Africa
19% 1%
12%
South Asia
 Resources and know-how of a global 8%
development bank + flexibility of a merchant Europe &
bank Central Asia
23%
 Holds equity in over 800 companies worldwide Latin
East Asia and America
the Pacific 24%
12%
2

3. IFC’s Global Reach
IFC has reach in 100+ country and regional advisory services offices worldwide
Drawing on our experience and lessons-learned, we share sector best practices to the benefit of our
clients
Dakar
Nairobi
3

4. Our Beliefs
Private sector solutions for sustainability and inclusive development
WATER:
ENERGY: Low carbon
TRANSPORTATION: Capture, treatment, conservation AIR & ENVIRONMENT: Emission
generation, energy
Vehicles, systems, fuels and , wastewater treatment, water control, trading and offsets
efficiency, storage, smart grids.
logistics efficiency, access to water
BUILDINGS: Low carbon MANUFACTURING: Green chemicals, AGRICULTURE & FORESTRY: RECYCLING & WASTE: Recycling
strategy, energy RE/EE supply chain, cleaner Sustainable Value Chains, EST and waste treatment services,
efficiency, sustainable materials. production. standards, Land mgmt, low resource efficiency
carbon and adaptation strategies,
biomass
Can only scale and have impact if
significant private sector participation is achieved

5. Sustainable Value Chains: Current Reality
1. Increasing recognition of the risks and opportunities value chain
sustainability practices represent to lead companies
2. Increasing recognition of the role lead companies can play in
international development
3. Increasing recognition of the business case for sustainability; many
investment opportunities pay for themselves in 2-3 years from savings
4. Many companies are making public statements of commitment to this
effect but are struggling to make tangible progress
5. Considerable challenges to sustainability upgrades – limited
awareness, access to technology, implementation capacity and lack of
long term financing key obstacles IFC is trying to address

6. Sustainability Value Chain Finance: IFC Approach

7. Sustainable Global Value Chains: A Collaboration
1. Value Chain Lead Company
 Role:
 Engages firms in its value chains
 Provides incentives to supply chain partners
• Price incentives/financing
• Stronger contracts
• Preferred supplier status
• other
 Benefits:
 Reduced operational risk
 Reduced regulatory risk
 Reduced green-house gas emissions associated with company
 Improved reputation and public relations
 Brand differentiation
 Better relationship with suppliers and distributors

8. Sustainable Global Value Chains: A Collaboration
2. Producers & Distributors in the Value Chain
 Role:
 Implement sustainability upgrade
 Benefits:
 Improved profitability & competitiveness
 Meet lead company requirements
 Improved reputation
 Reduced regulatory risk

9. Sustainable Global Value Chains: A Collaboration
3. Financial Intermediary
 Role:
 Offers sustainability finance solutions to suppliers and
distributors in lead company’s value chain
 Benefits:
 Offering new product to address needs of blue chip clients
 Reduced risk of large clients
 Pipeline development and new business opportunity
 Differentiation from competitors
 Reduced greenhouse gas impact of portfolio

10. Sustainable Global Value Chains: A Collaboration
4. IFC
 Role:
 Provide financial support to address financing gaps (credit
lines, risk sharing, portfolio guarantees, etc.) for value chain
sustainability upgrades
 Capacity building for value chain producers and distributors
in various areas of sustainability upgrades
 Benefits:
 Scaling up sustainability finance in order to meet climate
change and poverty reduction objectives

11. Annexes : Examples

12. Examples
 Food retailer or food brand company concerned about the
environmental and social practices of its suppliers and sub-suppliers, a
considerable reputational and operational risk, wants to improve
visibility and encourage the improvement of environmental and social
practices (including energy efficiency, renewable energy, water
conservation, etc) in its entire value chain, including at the level of
farmers, processors, manufacturers and logistics providers in its value
chain
 Large electronics company is kept responsible by the public for
greenhouse gas emissions in its entire value chain, even though it
does not own most of the companies involved. Therefore it decides to
encourage value chain companies to implement greenhouse gas
emissions reducing investments, such as energy and resource
efficiency measures.

13. Examples (cont’d)
 Paper brand is worried about the source of its pulp, in particular the
reputational issues related to the deforestation of old growth forests.
Therefore it decides to move towards the use of certified wood which
requires its suppliers to make investments in sustainability measures
and certification.
 Chain restaurant wants to improve its image and promote green
construction retrofits of its franchisees and make its supply chain
more sustainable.
 Consumer goods brand is considering reaching remote areas with
its products and developing a distribution network, but wants to do it
in a responsible way.