Devex Invested: A close-up look at IFC's creative investments

When you’re curled up on the couch watching a movie or dancing to your favorite song, you’re probably not thinking about the impact on the world economy. But it turns out that the creative industries — think music, film, and fashion — account for about 3% of global gross domestic product and employ more workers between 18 and 25 than any other industry. Development finance institutions have been thinking about that statistic in recent years. Back in 2022, International Finance Corporation chief Makhtar Diop told me that he wanted IFC to invest more in this sector. So I decided it was time for a close-up of what has happened given that new mandate. • First, the numbers: IFC has made a handful of investments, spending about $114 million of its own money and bringing in private funding for a total of $500 million in commitments to the industry. That includes a visual effects company expanding India operations, an Indian audio company, and a digital African platform for artisans to sell their wares. • Diop himself has also invested quite a bit of time on the subject. He’s released over 20 podcast episodes interviewing movie stars and musicians, chatting about everything from guitar riffs to fighting poverty. It’s unclear exactly how that ties to the formal investing program, and IFC declined to comment on the podcast’s cost. • IFC seems to have a ways to go in getting the word out — several creative industry business founders told me they didn’t know much about its efforts. IFC’s German Cufré, who leads its creative industries work, told me building up investments in the sector is not without its challenges. But the case for doing so is clear. “What is really becoming crystal clear to all of us is that this is a sector that has substantial potential,” he told me. “There’s usually this perception that this is ancillary, an afterthought nobody really cares about, but it is a major driver of employment and growth.” Read: Lights, camera, but where’s the action on IFC’s creative investments? Meet me at SOCAP I’m in San Francisco this week for the SOCAP conference focused on impact investing and social entrepreneurship. It’s got a laid-back vibe, with an outdoor courtyard meeting area and entrepreneurs walking the halls and looking for collaborations and potential funders. Some interesting things I’ve picked up so far: • Development Finance Corporation deputy chief climate officer Aparna Shrivastava played a bit of a role reversal. Instead of fielding pitches from entrepreneurs looking for cash, during one presentation she asked the audience to reach out with climate adaptation investments, particularly if there are funds in the space looking for support. • DFC launched a push to accelerate its climate adaptation efforts at climate change conference COP 27 last year, but Shrivastava said: “In my opinion, it hasn’t accelerated enough. And so we’re actually going back to the drawing board to figure out how we can do more and do it faster.” • Gender-lens investing is a key track that I’m following, and I was especially interested to hear more following a recent report from the NGO Publish What You Fund that found that development finance institutions are not disclosing some information about their 2X gender investments. This is especially concerning as those standards are more widely adopted and are built on to create a certification, Publish What You Fund told me. It’s critical to first understand the actual impact of those investments and how they are moving the needle, so more transparency is needed, they said. Current 2X standards look at whether a company is founded by women, the percent ownership or management that is women, and whether the business benefits women. Some of those percentages are low, 2X Global’s director of partnerships and impact Robert Meloche conceded, but those standards have helped catalyze billions of investments. But it is worth asking how deep the impact is and whether the standards make regional differences and adjustments, he said Monday at SOCAP. 2X Global is looking at how to get to more “thoughtful and progressive sort of measurements as opposed to just sort of raw how many women are on the boards,” Meloche said. That’s what the organization is now piloting as it tries to create a more robust standard. + Are you at SOCAP? Shoot me a message at adva.saldinger@devex.com if you’d like to meet in person. EIB financing in Gaza, West Bank As Israel’s war in Gaza rages, the European Investment Bank is monitoring the situation on the ground in case any of its projects may be affected. EIB has provided about €416 million ($442 million) of financing for private sector investment by Palestinian partners over the last decade. Much of this went to local banks and microfinance institutions, and there was one initiative to put solar panels on schools in the West Bank. EIB does not provide any public sector support in Gaza and has not financed any public investment there since Hamas assumed control in 2007. As a designated terrorist entity, Hamas is cut off from European Union assistance and has never benefited from EIB support, a bank spokesperson said, adding that extra checks are underway on projects in Gaza. “The EIB joins the EU and echoes its leaders in condemning in the strongest possible terms the multiple and indiscriminate attacks across Israel by Hamas,” the spokesperson said. “We are following the situation closely and will consider how both EU decisions and the situation on the ground impact future project approvals.” Related: A funding tracker of who’s sending aid to Gaza Funding shortfall Remember a few weeks ago when we wrote about all those funds at the World Bank? The Global Financing Facility is one of them. It has raised some $445 million to support the health of women, children, and adolescents through 2025, short of the $800 million it needs, the facility announced last week. But GFF director Juan Pablo Uribe believes there’s still time to hit that fundraising target by the end of the year. “With our commitments, with ongoing conversations, with our new partners coming in, we will not only reach but surpass [it] in the coming months,” he said at the close of a recent pledging event. Read: GFF raises more than half of $800 million goal but time is running out ICYMI: Does the World Bank have too many trust funds? (Pro) + Not a Devex Pro member yet? Access all our exclusive reporting and analysis by starting your 15-day free trial of Pro today What we’re reading More climate finance is needed, but where should it come from? [Devex] Loss and damage talks break down over push for World Bank to host fund. [Devex] Barbados and beyond: EU’s lending arm working on string of ‘debt-for-climate’ swaps. [Reuters] Belt and Road Initiative: Is China’s trillion-dollar gamble worth it? [BBC] Vince Chadwick contributed to this edition of Devex Invested.