May 8, 2017
On May 8, the Japan International Cooperation Agency (JICA) signed a memorandum with the International Finance Corporation (IFC)* for promoting co-financing by both agencies to the private sector in developing countries. The signing took place at JICA’s headquarters in Chiyoda-ku, Tokyo, between the IFC Vice President, Nena Stoiljkovic, and the JICA Senior Vice President, Kenichi Tomiyoshi.
There is a strong demand for investment that utilizes private enterprise funding and expertise in developing countries in a variety of fields, including infrastructure development, healthcare, agricultural business, microfinance, small and medium enterprises, and fighting climate change, but due to barriers such as high country risks, it is difficult for private enterprises in developing countries to obtain long-term financing from general financial institutions.
To meet such financing needs, JICA is deepening cooperation and partnership ties with the IFC, which has a great deal of experience in providing finance for the private sector in developing countries. JICA signed a Master Cooperation Agreement with the IFC in April 2015, has decided on a cooperative work process in co-financing projects, and has worked to make the co-financing process faster and more efficient. In March 2017, the Sirajganj Independent Power Plant Project was approved as the first co-financing project for a combined cycle gas thermal power plant (output: approximately 400 megawatts) in the private sector in Bangladesh.
The memorandum, which will further advance these efforts, incorporates measures to strengthen the partnership with the IFC in the project formation and due diligence process, including harmonization of due diligence procedures and periodic consultative meetings to strengthen communication. Through these efforts JICA and IFC aim to expand the total amount of co-financing to 1.5 billion dollar (for each agency) over the next five years.
JICA will continue contributing to solving development issues while responding to financing needs in the private sector in developing countries.
The IFC, a member of the World Bank Group, is one of the largest global development institution focused on the private sector in emerging markets. IFC supports private companies in approximately 100 countries around the world to help the private sector end extreme poverty and boost shared prosperity