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Dubai: International Finance Corporation (IFC), the private sector arm of the World Bank Group, will invest more than $1.5 billion in the Middle East and North Africa (Mena) in 2008, Michael G Essex, the IFC director for the region, told Gulf News.
"Our primary objective in the Middle East and North Africa region is to encourage intra-regional capital flows, particularly into emerging markets from the capital rich countries of the region. As part of these initiatives, we take equity participation in projects along with private sector partners," said Essex.
In 2007 IFC invested more than $1.2 billion in 45 companies across Mena, covering a dozen countries and accounting for about 15 per cent of IFC's investments across the world. Overall, IFC invested $8 billion from its own account last year and mobilised an additional $4 billion while its commitment to sub-Saharan Africa more than doubled to $1.4 billion.
While IFC's operations in the Gulf is focused more on channelising capital from the region to emerging markets that are more in need of capital, the agency is also actively involved in transforming the banking and financial services sector with special focus on capital markets development.
Developing the housing finance market is a key priority for IFC, which not only provides funding but also offers global expertise, experience in structuring transactions, and a wide range of partners. "We are involved in the development of housing finance sector across the Gulf region. There is an urgent need to improve the housing finance services to bring the benefit of housing to larger number of people in the region," he said.
Saudi Arabia
During a recent visit to Saudi Arabia, Lars Thunell, executive vice-president and CEO of IFC, signed a memorandum of understanding with three of the country's leading savings institutions - the Public Investment Fund, the General Organisation for Social Investment, and the Public Pension Agency - as a first step to establishing a housing finance facility.
The facility, to be formed by IFC and local public agencies, will provide long-term funding to banks and housing finance institutions to help them provide affordable financing to lower- and middle-income people.
IFC's housing finance transactions in Saudi Arabia include an investment of $27 million alongside three leading Saudi companies to launch the Saudi Home Loans Company, which offers Sharia-compliant financing to middle- and lower-income borrowers. IFC also arranged for India's HDFC to train the Saudi Home Loans Company in credit risk management, operations, and management information systems.
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