In the past year, the International Finance Corporation has invested significantly in its so-called upstream work — bringing on hundreds of new staffers, setting up regional teams, and creating new incentive systems — in an effort to help create investment opportunities.
It’s a shift from IFC’s standard approach of investing more reactively and turning away potential investments that didn’t fit a specific mold. That old system, critics say, resulted in IFC underinvesting in low- and lower-middle-income countries, as well as focusing too much on closing deals and too little on development impact.
But now IFC is trying to change that — at least somewhat. As part of the institution’s “3.0 strategy,” launched in 2016, along with the commitment as part of its capital increase to significantly raise its investment in the lowest-income and most fragile countries by 2030, IFC has been staffing up and operationalizing its upstream approach: trying to create a pipeline of potential future projects through a mix of funding and technical assistance.