IFC may boost investments in Pakistan to support economy

ISLAMABAD: The World Bank’s private- sector lending arm said on Wednesday it could increase its investments in Pakistan to revive the country’s struggling economy.

“The IFC (International Finance Corporation) is looking into the possibility of increasing annual investment for Pakistan to support the country’s economy,” a government statement quoted Hans Peter Lankes, IFC’s vice president economics and private sector development, as saying. Lankes said IFC’s much of the focus is on improving energy and power infrastructure and supporting housing sector in Pakistan as well as bolstering financial inclusion and long-term finance for development of the private sector.

Lankes met Makhdum Khusro Bakhtyar, minister for planning, development and reform and senior officials of the ministry and apprised them on the IFC’s programme in support of Pakistan.

“IFC is one of the largest investors in Pakistan’s power sector and had made substantial commitments in this regard and the corporation will continue to contribute to the development of Pakistan.”

Minister Bakhtyar said the government is committed to facilitate private sector development for achieving sustained economic growth.

“Pakistan values its partnership with the IFC and appreciated its contribution and support for development of the private sector in the country,” the minister said. He said IFC could help in further enhancing private investment in Pakistan for growth and development. Bakhtyar said a strong private sector was indispensable for ending poverty, employment generation and boosting shared prosperity across Pakistan.

“SMEs are identified as drivers of economic growth in our future growth strategy… the IFC could look into increasing private investment in this sector.”

Meanwhile IFC will invest $2.5 million in Sarmayacar, one of the first early-stage venture capital funds supporting tech-driven startups in Pakistan, to help boost entrepreneurship and spur economic growth.

"The early stage of local venture capital ecosystems is often the most crucial building block for sustaining healthy entrepreneurship and innovation, which helps to drive economic growth and create quality jobs,” Nadeem Siddiqui, IFC’s senior manager for Pakistan and Afghanistan was quoted in a statement as saying.

"Our aim is to support these entrepreneurs by helping to bridge issues around insufficient seed capital and strengthen the entrepreneurial ecosystem in Pakistan." Of the total amount, $2 million is equity commitments from Startup Catalyst, IFC’s global programme that backs accelerators and seed funds in emerging markets, the statement said, adding that through this initiative, the corporation supports startups that provide innovative solutions to development problems and create quality jobs.

The remaining $500,000 is from the Women Entrepreneurship Finance Initiative (We-Fi), that provides support to women entrepreneurs in developing countries by building their capacity, providing them access to financial services as well as domestic and global markets. We-Fi, which is hosted by the World Bank Group, is a partnership between governments, development banks and stakeholders, both public and private.

“The investment by IFC will boost the country’s entrepreneurship ecosystem by increasing market competition and will also encourage entrepreneurs to expand into new markets,” the statement said.