International Finance Corporation (IFC).ppt

International Finance Corporation

1. Conservation Finance
Activities
International Finance Corporation
Sustainable Conservation Finance
Retreat
Harbourtowne, Maryland
February 2002

2. IFC Overview
Private Sector Arm of World Bank Group
Investment bank that provides equity, debt & advisory services
(e.g., development of concessions)
In FY 2001, IFC approved US$ 3.7 billion of investments in 240 projects
As GEF Executing Agency, IFC has a $129M portfolio (12
projects) and $20M p.a. pipeline
Highly innovative projects that have pioneered the use of non-grant
financing (e.g., loans, guarantees, contingent finance, equity)

3. IFC’s Approach
to Conservation Finance
IFC approaches conservation finance from a private sector angle.
IFC’s projects aim to generate sustainable conservation financing
by catalyzing viable businesses.
IFC searches for instances where there is a business case to
support biodiversity conservation.
IFC seeks innovative business models.
IFC seeks to finance projects on a commercial basis; IFC tries to
minimize concessional funds.

4. IFC’s Approach
to Conservation Finance
IFC develops projects that provide long-term
conservation finance via:
Concession Fees (e.g., river concessions, tourism concessions in
parks)
Ecotourism Fees
Business Profits

5. IFC’s Biodiversity Investments
Terra Capital Fund
 $15 M private equity fund for LAC ($4 M IFC + $5 M GEF)
Small and Medium Scale Enterprise Program
 Provides loans of up to $1M to financial intermediaries (e.g., CI, TNC) who on-lend for
shade-grown coffee, ecotourism, organic agriculture, etc.
Conservera Amazónica (Peru)
 $4 M FSC-certified hearts-of-palm project in the Amazon Rainforest
Ecotourism Investments
 Equity investments and loans for lodges in or near conservation areas (e.g., Boundary
Hill, Inka Terra, A&K); in some cases GEF grants are used to catalyze incremental
biodiversity-benefiting activities

6. Terra Capital Fund
Equity Investments to Date
Certified Pure Ingredients
Organic berry farming (Chile)
Muaná Alimentos
FSC-certified hearts-of-palm company; located in the Amazon river estuary (Island of
Marajo, Brazil)
Tobasa Bioindustrial
Harvesting and processing of babassu coconut in the Amazon (Tocantins State, Brazil)
CIAPAR
Organic vegetables farming (Sao Paulo, Brazil)
Frezzi
Organic grapes in Argentina

7. Symbio
Polish company that assists small-scale farmers in buffer zones to convert to
organic agriculture
Symbio buys the products and sells them into EU wholesale market, making a margin on
the sale
Symbio’s principle barrier to growth is the inability to acquire working
capital (WC)
Banks won’t provide a credit line due to high perceived risks, lack of familiarity with
organic sector, and weak balance sheet
3-4 year guarantee is being offered to Polish bank so that it extends WC
credit line to Symbio
Guarantee will be scaled down each year as Symbio strengthens its balance sheet and
meets financial performance indicators
Example SME Investment:

8. IFC/GEF Biodiversity Pipeline
Komodo National Park Concession
Concession awarded to JV (which involves TNC and will receive no financial returns). GEF grant will help
cover management costs during initial years; it will be scaled down and eliminated after 7 years as park
revenues increase.
EcoEnterprises Fund
TNC-managed investment fund and technical assistance facility for small-scale ventures in Latin America
with strong links to local NGOs
Kijani Initiative
Investment Fund and Business Development Facility for biodiversity projects in Africa
European Conservation Farming Initiative
Investment fund and Tech. Assistance Facility to catalyze shift to
conservation farming in Central and Eastern Europe

9. Asian Conservation Corporation
& Foundation
The Asian Conservation Foundation (ACF) will fund conservation
activities run by local NGOs in priority areas in the Philippines
GEF and other grant funding will be used for 5-7 years
The Asian Conservation Corporation (ACC) is a holding company
that takes majority (or significant minority) equity stakes in for-
profit ventures that can provide biodiversity benefits in priority areas
The ACC will pass board resolutions or include clauses in its share purchase
agreements that obligate investee companies to fundthe ACF after
its grant funding runs out.

10. Fly-Fishing Concessions
in Mongolia and Kamchatka
Eg-Uur Watershed (Mongolia)
Mongolia-American JV will receive concession to operate fly fishing trips on
pristine river; GEF funds will catalyze conservation activities for surrounding
watershed; conservation activities will be sustained by ongoing concession fees.
Kamchatka Wild Salmon Center Project (Russia)
Innovative financial mechanism (e.g., dedicated credit line or guarantee
facility) to get domestic and foreign outfitters to jointly develop sustainable
sport fishing operations on watersheds throughout the Kamchatka Peninsula.
Project will develop concessions and a certification system for
environmentally-friendly sport fishing operations.

11. Poison Dart Frog Ranching
IFC is catalyzing a new Peruvian venture that
will save rainforest & alleviate poverty via
sustainable production of poison dart frogs
By overcoming the limiting factor (i.e., # of
suitable breeding sites) the project can
produce a surplus population for export to
U.S. and Europe.
Profits will fund park rangers & community
projects

12. IFC’s Staff
IFC has only several individuals who focus on conservation
finance, but we can leverage:
Many in-house economists, engineers, lawyers, environmental & social
specialists, and investment officers (IFC is the highest concentration of
MBAs in Washington!);
Biodiversity expertise of the World Bank & IUCN (Deborah Vorhies is
based at IUCN headquarters);and
Top consultants for project development purposes.

13. IFC’s Expertise
regarding Conservation Finance
Business Appraisal:
Tremendous in-house capabilities regarding financial, technical,
environmental, social, legal, and economic analysis.
Extensive investment experience in many sectors & countries
Concession Design:
IFC can leverage its experience with water, electricity, & tourism
concessions
Investment Structuring:
IFC can structure equity, quasi-equity, debt, guarantees, etc. for for-
profit ventures in developing countries.

14. IFC’s Needs & Potential Role
in Conservation Finance Alliance
IFC’s Needs:
IFC is looking for viable business opportunities
that will benefit biodiversity conservation.
IFC’s Potential Contributions:
For viable projects, IFC could provide significant
financial engineering expertise as well as
commercial and/or concessional financing