Latest news with #InternationalFinanceCorporation
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First Post
3 days ago
- Business
- First Post
Is World Bank making the mistake IMF has made with Pakistan?
Critics warn the World Bank may be repeating the IMF's errors by offering large-scale financial support without enforcing meaningful, long-term reforms read more The World Bank has unveiled a $40 billion long-term financial support package for Pakistan under its new Country Partnership Framework (CPF), extending its planning horizon from five to 10 years (2026–2035). This marks a significant deepening of engagement with a country persistently troubled by economic instability and chronic governance failures. Official documents say that the CPF aims to bolster public services, attract private investment, and support sectors such as education, healthcare, clean energy, and climate resilience. The first phase will channel $20 billion in public sector loans, while the International Finance Corporation (IFC) will mobilise the remaining $20 billion to spur private sector participation. STORY CONTINUES BELOW THIS AD While the CPF aligns with Pakistan's declared development priorities, serious concerns persist regarding the country's inefficient and inequitable tax system—a challenge the World Bank itself has acknowledged, calling for urgent reforms to ensure fiscal sustainability and responsible use of foreign assistance. But Pakistan has a dubious record: Terrorism, misuse of Funds, and international warnings Critics warn the World Bank may be repeating the IMF's errors by offering large-scale financial support without enforcing meaningful, long-term reforms. The IMF recently released $1 billion to Pakistan despite strong objections from India and others, who cited Pakistan's history of misusing funds and sheltering extremist elements. India has consistently accused Pakistan of diverting international loans and grants to sponsor terrorism, particularly across the border into India, and has highlighted Pakistan's repeated failure to honour its commitments to curb terror financing. India's Defence Minister Rajnath Singh publicly urged the IMF and other global lenders to reconsider their support, warning that such funds risk being siphoned off to finance terrorist infrastructure. Following these protests, the IMF imposed 11 stringent conditions on Pakistan, demanding reforms in governance, fiscal discipline, and transparency. Pakistan's high-risk profile for money laundering and terror financing has been flagged by the Financial Action Task Force (FATF), which placed the country on its 'grey list' due to 'strategic deficiencies' in its anti-money laundering and counter-terror financing regimes. STORY CONTINUES BELOW THIS AD Pakistan remains a key conduit for the funding and sheltering of terrorist groups, with porous borders and weak regulatory oversight facilitating crimes such as smuggling, drug trafficking, and extortion—all of which help finance terrorism. Siphoning of international aid There is a well-documented history of Pakistan diverting international aid, including IMF and World Bank loans, to fund military and extremist activities. Reports indicate that arms imports and terror financing activities have increased in years when Pakistan received large-scale international assistance. Pakistan's Inter-Services Intelligence (ISI) and military have been repeatedly implicated in channelling funds—often sourced from international loans—towards terror groups operating in the region. The risk for the World Bank Without robust accountability measures and strict conditionality, the World Bank risks seeing its CPF funds absorbed into the same cycle of mismanagement and extremism sponsorship that has plagued previous IMF bailouts. Pakistan observers warn that with absent structural reforms and effective monitoring, international funds may once again fail to yield genuine progress for the Pakistani people, instead perpetuating instability in the region. STORY CONTINUES BELOW THIS AD The World Bank's new economy-booster move risks repeating the IMF's mistakes by providing substantial financial support to Pakistan without adequate safeguards, despite the country's well-documented record of sheltering, sponsoring, and protecting terrorism—often by misappropriating international loans and grants intended for development.
Shafaq News
3 days ago
- Business
- Shafaq News
Iraq eyes major Baghdad Airport expansion
Shafaq News/ On Thursday, Iraqi Prime Minister Mohammed Shia al-Sudani called for the modernization of Baghdad International Airport, aiming to match the capital's stature amid rising passenger demand. According to a statement from the prime minister's media office, al-Sudani chaired a meeting with representatives from the International Finance Corporation (IFC), government advisors, and the head of Iraq's Civil Aviation Authority. The discussion confirmed that bidding documents are finalized and that a request for proposals will soon be issued to qualified companies, with competitive dialogue rounds planned to select the most suitable offer. Al-Sudani also stressed the importance of bringing the airport's services and infrastructure in line with international standards, emphasizing the protection of current employees' rights, the enhancement of their skills, and the creation of new job opportunities. Moreover, development consultants presented the project's key features, including the construction of a new terminal designed to handle 8.5 million passengers annually, with traffic expected to reach 15 million before 2040. The planned upgrades further include modernizing runways and aprons, streamlining passenger flow, unifying VIP terminals, and strengthening operational oversight.
Time of India
4 days ago
- Business
- Time of India
L Catterton to raise $600 million India focused fund
Representative image (AI) MUMBAI: Private equity (PE) firm L Catterton backed by French luxury brand LVMH is raising a $600 million India-focused fund as it looks to tap into opportunities in a growing market where a spate of new-age firms are building consumer focused brands and services. International Finance Corporation (IFC), a World Bank affiliate has proposed to invest up to $30 million in the fund alongside an additional co-investment of up to $30 million, it said in a recent disclosure. L Catterton did not respond to queries. L Catterton will invest in seven to nine companies through the fund, largely mid-sized and operating in the consumer space with cheque sizes ranging from $25-$150 million. The fund will back companies building in the food and beverages, retail and restaurants, consumer services (including healthcare) spaces besides funding up and coming consumer brands. The PE firm has traditionally been consumer focused and has made more than 275 investments globally. Its India portfolio includes a mix of startups such as Sugar Cosmetics, Drools and bigger players such as Jio Platforms. L Catterton which had been routing its investments in India through Asia fund last year roped in former Hindustan Unilever (HUL) chief executive officer Sanjiv Mehta to build a new investment vehicle for the India market. The PE firm's Asia platform formed a new joint venture partnership with Mehta for the same. Several PE and VC (venture capital) investors have been raising funds for the India market even as deployment of large cheques have so far been tepid amid evolving global macro developments. Last month, homegrown investment firm A91 Partners closed a $665 million fund while disclosure made by VC firm Accel earlier this year showed that it raised a $650 million fund focused on the region. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Observer
25-05-2025
- Business
- Observer
No development strategy can ignore the climate
After decades of industrialisation powered by fossil fuels, the costs of climate change are becoming ever more apparent in both the Global South and the Global North. In Germany, flooding in 2021 left 190 people dead, displaced 40,000, and caused $40 billion in damage. And in Brazil, the 2024 Rio Grande do Sul flood claimed 183 lives and displaced more than 600,000 people, and Amazon wildfires destroyed an area the size of New Jersey and wreaked havoc on the regional economy, destroying livestock and agriculture, and causing tourism to plummet. Even as US President Donald Trump has loudly proclaimed America's withdrawal from the Paris climate agreement (again), a silent revolution is taking place just about everywhere else. Most countries know that they cannot ignore climate change in pursuing their economic development agendas. They understand that climate policies boost investment in important industries such as energy and manufacturing, support the development of new technologies that enhance productive capacities, and improve job quality. They also understand that climate and development financing are not at odds with one another or moving on separate tracks; rather, they are closely aligned with goals of driving productivity growth and social development. This is certainly true for most countries served by the World Bank and its regional peers. These countries are demanding financing and expertise for 'climate-smart' investments. They want to develop renewable energy sources as part of a broader strategy to improve energy access, cut emissions, and reduce dependencies. And they are strengthening the resilience of their infrastructure to more frequent floods, droughts, and storms, ultimately saving far more than they would spend on disaster recovery. In response to these demands, the World Bank Group announced, in 2024, that it will raise its climate-finance target to 45 per cent of its total loan portfolio. At the United Nations Climate Conference in Baku (COP29) last November, multilateral development banks collectively committed to providing $120 billion in annual climate financing for low- and middle-income countries by 2030. To be sure, humankind has made real progress in slowing climate change over the past few decades. But now more than ever, partnerships between development banks and their clients are crucial to restore destroyed natural resources, and to develop new industries, standards, designs, and technologies to cope with a changing climate. For example, the International Finance Corporation, the private-sector arm of the World Bank Group, was instrumental in designing climate-friendly 'green' building standards. Now, buildings constructed according to these standards are cheaper to operate. Not only do they have lower energy and maintenance costs; they are more resilient to damage and tend to outperform in terms of property value. As the host of the next climate summit, COP30, the Brazilian government is implementing important structural reforms that recognise climate-change adaptation, mitigation, and biodiversity protection as essential drivers of productivity and growth. And in March, the World Bank, in close collaboration with the Inter-American Development Bank and the Asian Infrastructure Investment Bank, announced a $1 billion loan to support these efforts. Among other things, this project will establish Eco Invest Brazil, an initiative to offer currency hedging (protection against exchange-rate volatility) for green investments, thus creating the structural conditions for more private investment in the country's green transformation. Moreover, the project provides cash transfers to vulnerable families engaged in forest protection, thus combining climate action and social inclusion. Uruguay is another good example of a country that is aligning its economic and development policies with climate goals. The country's first sustainability-linked bond, issued in 2022, attracted 188 investors from around the world, far exceeding supply. In recognition of this success, the World Bank Group's Board of Directors approved an innovative $350 million loan that linked financing conditions to ambitious environmental targets, lending further momentum to the country's pursuit of a more sustainable economy built on robust, resilient growth. Meanwhile, the Philippines, one of the countries most vulnerable to natural disasters, has set the gold standard in disaster-risk financing with World Bank support. Facing frequent earthquakes and severe climate-related weather events, the Philippines has suffered billions in annual losses. So, to protect public finances and strengthen resilience, it developed a sophisticated risk-management strategy that includes innovative tools like Cat (catastrophe) bonds and parametric insurance (which pays according to the scale of the event, not the size of the loss). As extreme weather becomes more frequent, such preparedness is essential – not only for national stability but also to reduce reliance on international aid. Despite polarising political rhetoric, there is no going back. Developing countries will continue to grapple with persistent poverty and inequality, and the effects of climate change will only intensify. Since these challenges overlap and reinforce each other, they require integrated solutions. That is why most countries are no longer treating climate action as a separate agenda. They are embedding adaptation and mitigation within their development strategies and aligning economic growth, job creation, and social inclusion with environmental sustainability. This shift is well underway. It is driven not by ideology, but by necessity and pragmatic governance. @Project Syndicate, 2025 Marcos Vinicius Chiliatto The writer is World Bank Group Executive Director for Brazil, Colombia, the Dominican Republic, Ecuador, Haiti, Panama, the Philippines, Suriname and Trinidad and Tobago Michael Krake The writer is World Bank Group Executive Director for Germany
Business Insider
24-05-2025
- Business
- Business Insider
EU backs Central African trade growth with €40 million corridor upgrade
The European Union is reinforcing its commitment to Africa's economic development with a €40 million investment aimed at modernizing the Douala N'Djamena trade corridor. The EU is investing €40 million to modernize the Douala N'Djamena trade corridor, a key route in Central Africa. This initiative is part of the EU's Global Gateway strategy to promote sustainable infrastructure globally. Upgrading the corridor is expected to lower trade costs, increase efficiency, and strengthen EU-Africa partnerships. This strategic route connects Douala, Cameroon's largest port and economic hub, to N'Djamena, the capital of Chad, facilitating trade and transport across Central Africa. This investment is part of the EU's Global Gateway initiative, a comprehensive strategy to promote sustainable infrastructure projects globally by mobilizing public and private sector financing. Specifically, the funding for the Douala N'Djamena corridor is structured under a guarantee mechanism developed jointly by the EU and the International Finance Corporation (IFC). This mechanism is designed to reduce investment risks and encourage private sector participation in critical infrastructure projects. Koen Doens, Director General for International Partnerships at the European Commission, emphasized the broader objectives of this corridor upgrade. According to Doens, the project is not solely about improving trade logistics; it also aims to strengthen regional integration, generate employment opportunities, and enhance stability throughout Central Africa. These goals align with the EU's evolving approach towards Africa transitioning from traditional aid giving to fostering strategic partnerships and investments that support sustainable development and economic sovereignty. Inside the Douala-N'Djamena trade route The Douala N'Djamena corridor plays a crucial role in linking landlocked Chad with international markets through Cameroon's port facilities, thereby facilitating the movement of goods, services, and people. Enhancing this corridor is expected to reduce transit times and transport costs, which have historically hindered trade efficiency and economic growth in the region. While specific details of the infrastructure improvements were not outlined in the announcement, the investment likely encompasses upgrades to transport infrastructure and border management systems, given the corridor's role as a major trade artery. Improving these elements can significantly impact the ease of doing business, attract further private investment, and promote intra-African trade. Coordination between the European Union and the governments of Cameroon and Chad is central to the success of this project. The EU is focused on ensuring that financial resources are managed with transparency and accountability, supporting governance reforms to maximize the development impact. This initiative represents a clear shift in the EU's Africa policy, signaling a move away from one-way aid models towards partnership-based engagement.
