IFC focuses on sustainable investment in South Asia

Kathmandu, Aug. 17

The International Finance Corporation (IFC)'s sustained investments in South Asia continued to have strong impact in the fiscal year 2021, with support for medical facilities, vaccines and supplies, and to hard-hit micro, small, and medium enterprises (MSMEs), it said on Tuesday.

Issuing a statement, the World Bank organisation said that its investment also spurred investments in renewable energy, affordable housing, and distressed assets resolution.

“In the midst of a difficult year with massive and ongoing social and economic disruptions caused by COVID-19, IFC committed over US$3.8 billion, including mobilization and short-term finance, in South Asia as of June 2021,” read the statement.

In India, IFC’s largest client country globally, total commitments at the end of June stood at $1.7 billion representing an increase of over 51 per cent from last year. Likewise, in Bangladesh, IFC made total commitments of $791 million, an increase of almost 33 per cent from last year.  

"The COVID-19 crisis has drastically impacted the region’s private sector, which has severely affected the region’s most vulnerable people,” said IFC's Vice President for Asia and the Pacific region, Alfonso Garcia Mora.

"COVID-19 has laid bare the region’s existing vulnerabilities in the financial sector, disrupting businesses—particularly micro, small, and medium enterprises—and leaving so many people exposed. That’s why we’ve focused our attention on supporting moves to improve resilience on multiple fronts, as all indications are that the road to recovery will be long,” he added.

IFC has committed $590 million in COVID-response deals in South Asia—with additional deals worth over $100 million in the pipeline. 

“The impact of the pandemic coupled with the region’s vulnerability to climate change, has highlighted the need for a collaborative, resilient and climate-friendly recovery that can withstand future shocks,” said IFC’s new Regional Director for South Asia, Hector Gomez Ang. “This is especially important for South Asia, which is home to three of the top five countries in terms of vulnerability to climate change globally.”

 While South Asia is one of the fastest growing regions in the world, estimates suggest that climate impacts could reduce its annual gross domestic product by an average of 1.8 per cent by 2050, rising to 8.8 per cent by 2100 if the countries fail to take adequate measures. 

Published in The Rising Nepal daily on 18 August 2021.