Private-lending arm looks set for a tune-up
The International Finance Corporation, the World Bank's affiliate for private-sector investment, could be ripe for an infusion of new capital, as World Bank president James Wolfensohn recently signalled (Euromoney, September 2001). There's just one catch. Key players among the 186 member governments that are the IFC's current shareholders - the G7 in particular - have been in no mood to contribute new funds.
Peter Woicke, the IFC's executive vice-president, has a few tricks up his sleeve to deal with the problem. Woicke thinks ethical funds could find investing in the IFC quite appealing if the agency were to raise its sights and aim for returns of 10%. "I could well imagine," says Woicke, "that some of the ethical funds would say 'that's a good return.'" The IFC currently tries to earn 8% on equity, but rarely succeeds.
Woicke says the ethical funds would appreciate the social and environmental standards the IFC insists on before investing in specific projects.