International Finance Corp., a private equity arm of World Bank, on Feb. 6 held the Maximizing Finance for Development Seminar in Seoul with the aim of attracting more Korean investments in infrastructure projects in emerging markets, especially Africa.
The IFC has stepped up efforts to mobilize private and commercial financing to support investments in client countries and maximize financing for their development with a new approach called Maximizing Finance for Development.
“The world needs to spend annually more than US$3 trillion on infrastructure by 2030 to maintain the projected growth. Of this total amount, the emerging markets need US$1.9 trillion,” said Cho Hyun-chan, regional industry head for infrastructure and natural resources for the Asia-Pacific region. “We are working to attract more private sector capital and expertise to improve power, water, transportation, and telecommunications systems in developing countries.”
Cho expressed high expectations about more investments from Korean firms that would also help increase the country’s impact and role in global development. According to the IFC, Korean firms have invested US$4 billion on more than 80 projects since 1969.
“In the past, Korean firms used to participate in EPC (engineering, procurement and construction) projects only, but more recently they are required to be more involved in the project like purchasing stakes. The IFC, equipped with decades of experiences and networks, can help them access to local partners and governments,” he added.
During the event, the IFC also introduced its new Private Sector Window fund, a US$2.5 billion financing facility that aims to offer private companies cheaper and de-risked financing in their investments in the world’s most fragile countries.
“The focus will be on large-scale infrastructure and public-private partners as well as strategic sectors such as agribusiness, so it offers an opportunity for Korean and other Asian companies for potential win-win scenarios, where capital earns a higher return and the developing countries receive much needed investment and expertise,” said Milissa Day, the PSW regional chief.
More than 200 executives from Korean infrastructure and financial firms attended the event. They showed keen interest in the PSW fund’s criteria for selecting partnering firms and details of additional guarantees for high-risk investments.
By Lee Ji-yoon (email@example.com