IFC Syndications MCPP Initiatives

8th Annual MDB Heads of Syndications Meeting June 13 - 14, 2017

IFC Syndications MCPP Initiatives Meaghan McGrath IFC Chief Counsel

Managed Co-Lending Portfolio Program (MCPP) 

The Managed Co-Lending Portfolio Program (MCPP) is an IFC Syndications product that allows institutional investors the opportunity to passively participate in IFC’s future loan portfolio.

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Investors provide capital on a portfolio basis, which can be deployed by IFC in individual investments across all regions and sectors in accordance with IFC’s strategy and processes, as well as subject to the investors’ desired eligibility criteria.

Managed Co-Lending Portfolio Program (MCPP) 

MCPP investor approval is sought pre-mandate; project appraisal, approval, commitment, and supervision are managed directly by IFC with the MCPP investor passively following IFC decisions.

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MCPP complements IFC’s existing B Loan and Parallel Loan platforms. Through MCPP IFC can expand its base of colending partners to include investors that do not have the capacity to invest on a “deal by deal” basis.

MCPP - Basic Sovereign Investor Administrative Agreement Loan Agreement and Portfolio Management

Sovereign Investor

IFC Trust Fund

IFC as Implementing Entity

Borrower

MCPP – Basic Institutional Investor

B-Lender

Facility Participation Agreement Fund

Loan Agreement and Portfolio Management

Borrower

Addressing Emerging Market Infrastructure Challenges – Private Sector Solutions 

It is estimated that $1 trillion dollars a year of financing is needed to build modern infrastructure in emerging markets.

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The bulk of this investment requires the provision of long term financing, especially loans.

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Fewer banks are willing to provide long term loans.

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Therefore, unlocking capital flows to infrastructure from new sources, in particular institutional investors, became a high priority.

SAFE Program 

In 2013, the People's Bank of China, through SAFE, its State Administration for Foreign Exchange, pledged $3 billion under the MCPP platform to be committed over a six-year period.

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In one-and-a-half years, $1.5 billion was disbursed in 60 investments across the IFC’s portfolio in 30 different countries.

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This collaboration is particularly significant because the IFC used it as a template to launch the MCPP Infra Initiative.

MCPP Infra Initiative Raise $5 Billion in 5 Years 

MCPP Infra is designed for institutional investors seeking to increase their exposure to emerging-markets infrastructure.

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It is a platform on which private institutional investors and the IFC co-invest in infrastructure loans in emerging markets.

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IFC will originate, approve, and manage the portfolio of loans that will mirror IFC’s own portfolio in infrastructure.

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This structure is unprecedented, as until now infrastructure funds involving multilaterals and private institutional investors have mostly focused on private equity-style investment.

IFC and Allianz - $500 million 

On October 5, 2016, Allianz and IFC signed a partnership to make Allianz our first partner in the MCPP Infra Initiative.

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Allianz will invest $500 million, to be co-invested alongside IFC debt financing for infrastructure projects in emerging markets worldwide.

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With support from Sida, IFC will provide a limited first-loss guarantee on the investments to meet the risk-reward profile that institutional investors require.

Other MCPP Infra Investors 

IFC is in the process of finalizing contracts with:

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Prudential, for a commitment of $500 million

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AXA, for a commitment of $500 million

Thank You Meaghan McGrath mmcgrath@ifc.org

Samatar Yonis syonis@ifc.org

IFC Legal Department Washington D.C.