World Bank accepts risk to aid poor nations

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FT Syndication Service
LONDON: The International Finance Corporation, the private sector arm of the World Bank, is willing to accept more risk and greater volatility in returns as it steps up its push into the poorest countries, IFC chief executive Lars Thunell has told the Financial Times.
In an interview, Mr Thunell said "the risks are higher, volatility is higher and the cost of doing business is higher" in the poorest countries compared with middle income countries where the IFC has traditionally done most of its business.
But he added: "If you do it right and take some equity, because nobody else is there it can also be rewarding."
Last year equity investments made up more than a fifth of the IFC's total financing commitments.
The IFC is at the forefront of World Bank president Robert Zoellick's strategy for the bank group, which envisages ramping up IFC operations, particularly in the poorest countries, and integrating them more closely with the bank's public sector arms to create conditions for private sector-led growth.
Mr Thunell said the IFC had increased its capacity to work in poor countries by moving staff into field offices and building up its government advisory business. This includes counselling governments on how to simplify business regulations and create dispute settlement mechanisms.