IFC ties up with Bank of Tokyo-Mitsubishi

The International Finance Corp. (IFC) has entered into an agreement with Bank of Tokyo-Mitsubishi UFJ in tapping private sector investments in emerging markets.

The two financial institutions will focus primarily on sustainable energy finance, trade finance, investment funds, syndicated loans, project finance and co-investment in financial institutions.

The IFC is the private investment arm of the World Bank while Bank of Tokyo-Mitsubishi UJF is Japan’s leading bank, with around 1,100 domestic branches and offices, more than 400,000 corporate customers, and about 40 million individual customers. It also has the largest overseas network of any Japanese bank, comprising about 100 offices and subsidiaries in more than 40 countries worldwide.

IFC vice president for Europe, Central Asia and Global Financial Markets Jyrki Koskelo said that the two institutions will strengthen ties with Japanese firms interested in expanding in developing nations.

“We will utilize our current programs, such as the Global Trade Finance Program, and jointly develop new programs for sustainable energy finance,” Koskelo said.

The IFC has been emphasizing the importance of making key investments with the private sector in emerging markets, which include the Philippines.

IFC Philippine resident representative Jesse O. Ang said the funding priority will be given to private sector investments in infrastructure, agribusiness, power and the financial sector.

It is also prepared to do advisory services to create value for clients and government partners and foster sustainable, results-oriented development especially in energy.

IFC has allocated $564 million as new commitments to the Philippines for fiscal year 2008-2009. In the previous period, the IFC allocated $130 million.

Banks awash with cash could be tapped to redirect some of their lending activities to the small and medium enterprise (SME) sector. The IFC, through its advisory team, would entice banks to influence SMEs in running businesses as well as present energy-efficiency methods in doing business.

It has also been active in directly lending or guaranteeing part of the lending to the power sector. This year, the IFC would put emphasis on the development of renewable energy like solar, wind and biogas.