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The World Bank's International Finance Corporation (IFC) will invest US$500mn in MENA companies, according to vice-president Dimitris Tsitsiragos
Tsitsiragos said the organisation is keen on expanding its global footprint by bolstering partnerships with companies it has already invested in, while seeking out new companies ripe for investment.
”We want to make companies regional champions and contribute to economic stability. It is important that each region has globally competitive companies and this includes MENA,” added the V-P.
The organisation is a shareholder in Dubai-based utilities company Metito and has also provided hundreds of millions of dollars in financial support to UAE-based ports operator Gulftainer and Saudi Arabian power company ACWA Power International.
According to statistics, the MENA region accounts for only two per cent of world exports and four per cent of global inflows from FDI, excluding oil and gas. Restrictions on ownership, political instability and red tape are reasons cited by investors to avoid doing business in the region, added reports.
By providing initiatives to create jobs, develop infrastructure and enabling easy access to finance for SMEs, IFC hopes to overcome barriers in business and trade, Tsitsiragos said.
In 2013, IFC made nearly US$500mn in inter and intra-regional investments, concentrated in infrastructure and primarily GCC companies. It provided a US$30mn loan to Gulftainer to help the company expand in Iraq and loaned nearly US$50mn to Metito. IFC also supported Abu Dhabi-based energy company Taqa with its US$133mn investment in a gas-fired power plant in Ghana.
This year, IFC’s investment focus would include investing in new companies, as well as strengthening existing partnerships. “We are looking at repeating investments with them. We don’t see it as a one-time transaction, but a partnership in investing in what can be a difficult area,” added the World Bank body.