The International Finance Corporation (IFC) is keen to double its lending in India to $2.5-3 billion over the next couple of years, putting money in newer areas such as renewables, climate change themes, circular economy, and logistics. IFC's Managing Director Makhtar Diop backs a greater emphasis on the development agenda that includes supporting frontier states and helping MSMEs. Edited excerpts from an interview with Deepshikha Sikarwar & Vinay Pandey: ..
India is already IFC's largest programme. What kind of exposure are you looking at and what are the key areas of interest?
IFC would and should be doing more in terms of financial commitment because India's economy is at a stage where we can bring in more. India can take advantage of supply chain evolution to localise supply chains. On the manufacturing side, India has a good opportunity now to bring in FDI. Renewable energy and energy transition also present an opportunity. IFC will extend financing to MSMEs to build capacity and contribute to India's efforts to become a manufacturing hub. IFC is also keen tie up with cities as part of sub-national financing.
IFC is a private sector investor with a strong development agenda. How do you marry the two objectives?
IFC is the largest global development institution focused on the private sector in emerging markets. In FY22, IFC committed a record $32.8 billion to private firms and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with a global compounding crisis. We focus on development while making profits.
Within the development mandate, is there enough private investment opportunity in the market?
India is now the fifth largest economy. FDI is resuming and the country is expected to grow in the medium-term at 7%. The Indian economy has shown a good rebound after the pandemic. There is a willingness in the government to make improvements, to make it easier for firms to do business. Some measures have been taken to simplify procedures at the firm level. What the private sector sees as fast-growing areas are those around the climate change economy. The circular economy is also taking centre stage. These are some of the areas where investments would come in the near future. There is an emphasis in India to be a significant part of global supply chains. This is a medium-term ambition. There is also an opportunity to be a part of the semiconductor supply chain. In healthcare and pharmaceuticals, from traditional drugs to vaccines of the future, to genomics. Over 20% of our portfolio here is in disruptive technology because we see an opportunity to combine the research and innovations in India with digitalisation to play an important role in devising newer types of medicines-that are more targeted, based on genomics, and tailored to diverse populations.
In India, we are looking at renewables. We would also look at frontier states. How we can help them to attract more private investments. We are very ambitious about India. We are looking to double our commitments to $1.3 to 2.5-3 billion over the next two years. We are looking to engage more with NaBFID and in infrastructure development at scale.
Read more at: https://economictimes.indiatimes.com/news/economy/finance/were-very-ambitious-about-india-says-international-finance-corporation-md/articleshow/94336220.cms
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