When I joined the International Finance Corporation in March 2016, my motivating mantra was “to put development at the heart of IFC and IFC at the heart of development.”
My agenda for leading the institution has been shaped by my 33-year career in development — most of it at the World Bank — and my strong belief that the private sector is crucial to creating opportunities for people to lift themselves out of poverty.
Take Zambia, a country where only one-fifth of the population has access to electricity and drought has taxed hydropower facilities. With IFC and the World Bank’s support, the first large-scale solar plant is now operational, powering 30,000 households and businesses and diversifying the energy mix.
Scaling up private investments to poor countries, which we were mandated to do under our capital increase, is both a vital necessity and a massive opportunity outlined by world leaders in Addis Ababa, Ethiopia, in 2015.
But it is not easy. In development, success is never guaranteed. There are often trade-offs to make and hoops to jump through, and we hold ourselves to the highest possible standards.
I feel IFC is better equipped today to take on the biggest challenges in development.
We now start with assessing the potential development impact of an investment. There is no such thing as a silver bullet when it comes to measuring impact, but our system gives us the best tool yet for focusing on projects with the most potential to change lives and transform economies.
Looking back, I can say that going against the current is hard but necessary at times.—
Investors also need favorable business climates and regulations, stable institutions, and low sovereign risk. Projects require abundant human, financial, and physical capital. Many of these conditions are absent in poor countries.
To remedy that, we have endeavored to create the best environment to attract private finance. The World Bank and IFC are working closer together to promote reforms and work out financial mechanisms — including blended finance — capable of unlocking investment opportunities. And we have built our macroeconomic knowledge to better target our investments.
Even with our six-plus decades of experience, though, one of the biggest issues in development is the lack of bankable projects. To address this critical roadblock, IFC has expanded its focus on working “upstream,” developing projects from scratch and working more like an entrepreneur than a banker, to attract investors.
We also take great responsibility and pride in working closely with the communities we serve. These communities, and the civil society groups that represent them, understand local problems and regional specificities, and they are able to lay out priorities and practical solutions for addressing them.
Communities operate in close partnership with local governments and other institutions to help deliver services and build critical infrastructure. As such, they represent a vital source of information on where to focus our efforts. We need to work with these partners to fulfill our common mission of enabling inclusive and sustainable development.
But our drive to achieve greater accountability and transparency adds a layer of complexity to our work. For instance, our environmental, social, and governance criteria are in many cases so strict and the due diligence work so demanding that they prevent us from going to these markets.
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And it is sometimes the case that our investments have unintended negative impacts on communities and the environment.
The reality of development is complex and sometimes messy. In such a world, high standards often expose the need for continued improvement and more accountability. Some development interventions carry negative externalities — consequences that affect other parties. We recognize that and the need for addressing them proactively. That is why civil society organizations are so indispensable.
This complexity is another reason that has prompted me to focus on improving transparency and accountability during my time at IFC.
We have created a new environment and social risk and policy department and conduct more frequent and comprehensive reporting to our board and stakeholders. We work hard to ensure complaints are swiftly addressed.
And we continue to push for more reforms, strengthening information disclosure requirements related to financial intermediaries and introducing targets to ensure our blended resources are used most efficiently.
This week, I will hold my last meeting with civil society organizations in my current role. Now, we need these organizations to continue to partner with us, not only to keep IFC accountable, but to search for solutions that are mutually agreeable and benefit communities on the ground. It will take pragmatism, goodwill, and trust, but I am confident that together, we can succeed. Civil society groups have continuously supported IFC’s work while I served as CEO.
I recently announced my retirement, effective Oct. 1. Looking back, I can say that going against the current is hard but necessary at times. I firmly believe that IFC can make a huge difference in the poorest countries, but we must now put our new thinking and structure into action and bring much more private investment to countries that need it desperately. We owe it to people in those countries and to our shareholders.