ifc annual report 2013—the power of partnerships

Creating opportunity where it’s needed most

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IFC

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IFC Financial Highlights

Dollars in millions, as of and for the years ended June 30*

2013 2012 2011 2010 2009

Net income (loss) attributable to IFC $ 1,018 $ 1,328 $ 1,579 $ 1,746 $ (151)

Grants to IDA $ 340 $ 330 $ 600 $ 200 $ 450

Income before grants to IDA $ 1,350 $ 1,658 $ 2,179 $ 1,946 $ 299

Total assets $ 77,525 $ 75,761 $ 68,490 $ 61,075 $ 51,483

Loans, equity investments and debt securities, net $ 34,677 $ 31,438 $ 29,934 $ 25,944 $ 22,214

Estimated fair value of equity investments $ 13,309 $ 11,977 $ 13,126 $ 10,146 $ 7,932

KEY RATIOS

Return on average assets (GAAP basis) 1.3% 1.8% 2.4% 3.1% -0.3%

Return on average capital (GAAP basis) 4.8% 6.5% 8.2% 10.1% -0.9%

Cash and liquid investments as a percentage of next three years’ estimated net cash requirements 77% 77% 83% 71% 75%

Debt- to-equity ratio 2.6:1 2.7:1 2.6:1 2.2:1 2.1:1

Total resources required ($ billions) $ 16.8 $ 15.5 $ 14.4 $ 12.8 $ 10.9

Total resources available ($ billions) $ 20.5 $ 19.2 $ 17.9 $ 16.8 $ 14.8

Total reserve against losses on loans to total disbursed loan portfolio 7.20% 6.60% 6.6% 7.4% 7.4%

* See Management’s Discussion and Analysis and Consolidated Financial Statements for details on the calculation of these numbers:

http://www.ifc.org/ifcext/annualreport.nsf/Content/AR2013_Financial_Reporting

IFC Operational Highlights

Dollars in millions, for the year ended June 30

2013 2012 2011 2010 2009

NEW INVESTMENT COMMITMENTS

Number of projects 612 576 518 528 447

Number of countries 113 103 102 103 103

For IFC’s own account $ 18,349 $ 15,462 $ 12,186 $ 12,664 $ 10,547

CORE MOBILIZATION*

Syndicated loans1 $ 3,098 $ 2,691 $ 4,680 $ 1,986 $ 1,858

Structured fi nance – – – $ 797 $ 169

IFC initiatives & other $ 1,696 $ 1,727 $ 1,340 $ 2,358 $ 1,927

Asset Management Company (AMC) Funds $ 768 $ 437 $ 454 $ 236 $ 8

Public- Private Partnership (PPP)2 $ 942 $ 41 – – –

Total core mobilization $ 6,504 $ 4,896 $ 6,474 $ 5,377 $ 3,962

INVESTMENT DISBURSEMENTS



COMMITTED PORTFOLIO

Number of fi rms 1,948 1,825 1,737 1,656 1,579



ADVISORY SERVICES

Advisory Services program expenditures $ 232.0 $ 197.0 $ 181.7 $ 166.4 $ 157.8

Share of program in IDA countries5 65% 65% 64% 62% 52%

*Financing from entities other than IFC that becomes available to client due to IFC’s direct involvement in raising resources.

1. Includes B- Loans, Parallel Loans and A- Loan Participation Sales (ALPS).

2. Third- party financing made available for public-private partnership projects due to IFC’s mandated lead advisor role to national, local, or other government entity.

3. Includes B- Loans and Agented Parallel Loans.

4. Includes B- Loans, A- Loan Participation Sales (ALPS), Agented Parallel Loans, and Unfunded Risk Participations (URPs).

5. All references in this report to percentages of advisory program expenditures in IDA countries and fragile and conflict- affected areas exclude global projects.

In FY13, our investments climbed to an all- time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges.

1,500

500

1,000

–500

0

2,000

Net Income (Loss) Attributable to IFCDollars in millions

12 131109 10

60,000

40,000

20,000

0

80,000

Total AssetsDollars in millions

12 131109 10

PhotographyPage 4: Ray Rayburn/WB Photolab Page 6: Iwan BagusPage 8–9: Iwan BagusPage 18–19: Margie Politzer/Getty 0–21: Eightfi sh/GettyPage 22–23: Commerce and

Culture Agency/GettyPage 24–25: Dan Josephson/Getty Page 34: Vaner Cassaes Page 35: Sonata DkharPage 36: AbengoaPage 37: Gerardo Salazar (top);

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Kushang Singh (right) Page 46: Tran Thiet DungPage 47: Mackenzie KellerPage 50: Rebecca PostPage 51: Azito Energie (left);

Abhay (right) Page 52: Lisa DadlaniPage 53: Apollo Tyres Page 54: loveguli/Getty Page 58: Andrew Testa/PanosPage 59: Roshan (top);

Eric Dufl os (bottom) Page 60: Joseph Montezinos Page 61: Sirli BenarolyaPage 62: Ric Francis Page 63: Evgeniya Shatunova (top);

Ric Francis (bottom)Page 65: Eudes Santana Page 70: Anam AbbasPage 78: Pallon Daruwala

IFC ONLINE

IFC websiteifc.org

Annual Reportifc.org/AnnualReport

Social Media Indexifc.org/SocialMediaIndex

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CREDITS

IFC Annual Report TeamBruce MoatsDirector, External and Corporate Relations, World Bank Group

Lisa Kopp Chief of Brand Marketing and Production

Joseph RebelloChief Editor

Aaron RosenbergChief of Public Affairs

Inae RiverasEditorial Consultant

Katherine KlabenConsultant

DesignAddisonwww.addison.com

IllustrationPage 12–13: Thomas PorostockyPage 14–15: James TaylorPage 16–17: James Taylor

PrintingUNIMACunimacgraphics.com

IFC’s website, www.ifc.org, provides comprehensive information on every aspect of our activities. It includes con-tact information for offi ces worldwide, news releases and feature stories, data on results measurement, disclosure documents for proposed investments, and key policies and guidelines aff ect-ing IFC and our client companies.

The online version of IFC’s Annual Report 2013 provides downloadable PDFs of all materials in this volume and translations as they become available. It is available at www.ifc .org/ annualreport. The website also provides more information on sustain-ability, including a Global Reporting Initiative index.

STAY CONNECTEDWEB AND SOCIAL MEDIA RESOURCES

_ 111THE POWER OF PARTNERSHIPS

IFC Year in Review

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries.

Established in 1956, IFC is owned by 184 member countries, a group that collectively determines our policies. Our work in more than 100 developing countries allows companies and fi nancial institutions in emerging markets to create jobs, generate tax revenues, improve corporate governance and environmental performance, and contribute to their local communities.

IFC’s vision is that people should have the opportunity to escape poverty and improve their lives.

ABOUT IFC

IFC Annual Report 2013

THE POWER OF PARTNERSHIPS _ 1

Leadership Perspectives

A Letter fromWORLD BANK GROUP PRESIDENT JIM YONG KIM

We are at an auspicious moment in history. Thanks to the successes of the past few decades and a favorable economic outlook, developing countries now have an unprecedented opportunity: the chance to end extreme poverty within a generation. This opportunity must not be squandered.

Earlier this year, we in the World Bank Group set two specifi c and measurable goals for ourselves and our partners in the development community: eff ectively ending extreme poverty by shrinking the share of people living on less than $1.25 a day to 3 percent by 2030, and promoting shared prosperity by raising the incomes of the poorest 40 percent of the population in every developing country.

These are ambitious goals, and success is far from inevitable. Nearly fi ve years after the global fi nancial crisis began, in 2008, the world’s economic recovery remains fragile. Developed countries struggle with high unemployment and weak economic growth. Developing countries are growing more slowly than before the crisis. Moreover, the fi ght against poverty will become increasingly diffi cult as we push toward our target, since those who remain poor will be the hardest to reach.

Other challenges could pose new threats to poverty reduction. Confl ict and political instability present major risks, because they increase poverty and create long- term obstacles to development. Moreover, a warming planet could increase the prevalence and size of drought- aff ected areas, and make extreme weather events more frequent, with unpredictable costs in terms of lives and fi nancial resources.

Yet, I remain optimistic that achieving the goals is within our reach. Doing so will require systemic and relentless collaboration from the World Bank Group, our 188 member countries, and other partners.

IFC will play an important role by mobilizing the power of the private sector to create jobs and opportunity where they are needed most.

4 _ IFC ANNUAL REPORT 2013

This year, IFC provided a record of nearly $25 billion in fi nancing for private sector development, $6.5 billion of which was mobilized from investment partners. Nearly half of IFC’s 612 investment projects took place in the poor-est countries served by the International Development Association. More than $5 billion went to support private sector development in Sub- Saharan Africa, and more than $2 billion went to South Asia.

IFC Asset Management Company, an IFC subsidiary that mobilizes capital from third- party investors for invest-ment in developing countries, increased its assets under management to $5.5 billion. This represents a signifi cant milestone for a company set up just four years ago. In addition, IFC mobilized more than $3 billion from other investors in the form of syndicated loans.

This Annual Report shows the crucial role IFC has played in providing support for small and medium entrepre-neurs, expanding access to fi nance for the poor, creating jobs, and generating opportunities for women.

In Côte d’Ivoire, for example, IFC arranged a fi nancing package that will allow the Azito power plant to increase energy production by 50 percent without using additional gas. This will help reduce power shortages in the country and support its economic recovery. In Latin America, IFC is extending quality healthcare to poor communities in the Brazilian state of Bahia with a highly innovative public- private partnership model. And, working under a joint strategy with the World Bank, IFC is bringing new opportunity to Myanmar, a country whose economic development has lagged signifi -cantly behind that of its East Asian counterparts.

IFC is also making important strides in helping the private sector address climate change. Earlier in 2013, IFC issued the world’s largest “green” bond, raising $1 billion that will be directed to climate- related projects across the globe. In addition, IFC helped over 10 building developers in Asia, Latin America, and other regions adopt more energy- effi cient designs. These are the types of steps we must take to ensure that climate change does not wipe out the hard- won develop-ment gains the world has achieved in recent decades.

—JIM YONG KIMWorld Bank Group President

This year, IFC provided a record of nearly $25 billion in fi nancing for private sector development, $6.5 billion of which was mobilized from investment partners.


Leadership Perspectives

A Letter fromIFC EXECUTIVE VICE PRESIDENT AND CHIEF EXECUTIVE OFFICERJIN- YONG CAI

Across the world, the challenges of development are vast�—� and growing. So are the needs of entrepreneurs, investors, and businesses in developing countries, which struggle to overcome constraints in fi nance, infrastructure, employee skills, and the regulatory environment.

For IFC, this represents a tremendous opportunity: to engage the creativity and resources of the business community to change the world for the better. By helping companies over-come obstacles to sustainable growth, we help them create opportunity and improve lives. We enlist them as partners in the global eff ort to end extreme poverty and promote shared prosperity.

We believe strongly in the power of partnerships to make a transformational diff erence. As the world’s largest global development institution, we worked this year with nearly 2,000 private sector clients and a wide array of govern-ments, donors, and other stakeholders. The result was another record year for IFC�—� we invested and mobilized more money for private sector development than ever before, helping sustain development in more than 100 countries.

Our new investments climbed to an all- time high of nearly $25 billion in FY13, including funds mobilized from other investors, providing capital to more than 600 projects and companies across the world. We invested $18.3 billion for our own account and mobilized $6.5 billion from other investors. In a time of declining offi cial aid fl ows to developing countries, these investments had an impact in every region of the world.

We now have an investment portfolio of nearly $50 billion in nearly 2,000 companies in 126 countries. This diversifi cation has contributed to our strong risk- adjusted returns�—� and to our development impact.

At the end of 2012, our investments provided jobs for 2.7 million people in developing countries. With our support, our clients treated 17.2 million patients, educated 1 million students, and improved opportunities for 3.1 million farmers. They generated power for 52.2 million customers, and distrib-uted water to 42 million.


We focused strongly on promoting prosperity in the world’s poorest and most fragile regions.

In FY13, nearly half of our projects�—� totaling more than $6 billion�—� were in the poorest countries served by the World Bank’s International Development Association, most of them in Sub- Saharan Africa. About two- thirds of our advisory pro-gram expenditures were in IDA countries. Our investments in fragile and confl ict- aff ected regions climbed to nearly $600 million.

Our Advisory Services achieved signifi cant results for our clients�—� businesses and governments alike. Development- eff ectiveness ratings for Advisory Services reached a record of 75 percent while client- satisfaction ratings climbed to an all- time high of 90 percent. The advice we provide is a crucial element of the value we bring to our clients, and in FY13 we achieved notable progress in providing client solutions that integrate investment and advice�—� we had active advisory projects with 250 investment clients.

In FY13, our advice helped mobilize almost $1 billion in private investment through public- private partnerships, which are expected to improve infrastructure and health services for millions of people. In addition, we helped more than 40,000 small and medium enterprises obtain $4.5 billion in fi nancing secured with movable property, through our work with collateral registries. We also provided training and capacity- building to about 350,000 people�—� including farmers, entrepreneurs, and managers of small and medium enterprises.

In addition, IFC Asset Management Company continued to grow, increasing its assets under management to $5.5 billion across six investment funds, with a strong mix of reputable investors. It has launched two new funds�—� including the IFC Catalyst Fund, which focuses on climate- smart investments, and the Global Infrastructure Fund, which will invest scarce

equity risk capital in the critically important infrastruc-ture sector.

I am confi dent IFC can achieve even greater impact going forward. This year was my fi rst as IFC’s CEO, and I traveled to nearly three dozen countries�—� in every region of the world�—� to meet with our clients and staff . I saw fi rst-hand what we can achieve by being ambitious, unafraid of risk, client- focused, and open to new ideas. We can tackle the big problems that have long hindered development�—� such as access to fi nance, energy and climate change, and food security.

IFC is a unique organization, one that has managed to combine a businesslike commercial approach with a pas-sionate, focused commitment to achieving meaningful and measurable development impact. Strong, profi table growth builds resources for greater development impact in the future.

Developing countries need transformative solu-tions. Working with our partners, IFC is well positioned to provide them.

—JIN- YONG CAIIFC Executive Vice Presidentand Chief Executive Offi cer

We believe strongly in the power of partnerships to make a transformational diff erence.


MANAGEMENT TEAMOur seasoned team of executives ensures that IFC’s resources are deployed eff ectively, with a focus on maximizing development impact and meeting the needs of our clients. IFC’s Management Team benefi ts from years of development experience, a diversity of knowledge, and distinct cultural perspectives�—�qualities that

enhance IFC’s uniqueness. The team shapes our strategies and policies, positioning IFC to help improve the lives of more poor people in the developing world. Our executives are vital in maintaining IFC’s corporate culture of performance, accountability, and engagement.

Jingdong Hua

Vice President, Treasury and Syndications

Janamitra Devan

Vice President, Financial and Private Sector Development

Jean Philippe Prosper

Vice President, Sub-Saharan Africa, Latin America and the Caribbean

Saadia Khairi

Vice President, Risk Management and Portfolio

Karin Finkelston

Vice President, Asia-Pacifi c

Dorothy Berry

Vice President, Human Resources, Communications, and Administration


Ethiopis Tafara

Vice President, General Counsel

Dimitris Tsitsiragos

Vice President, Europe, Central Asia, Middle East and North Africa

Jin-Yong Cai

IFC Executive Vice President and CEO

Nena Stoiljkovic

Vice President, Business Advisory Services

Gavin Wilson

CEO, IFC Asset Management Company

Rashad Kaldany

Vice President and Chief Operating Offi cer

Jorge Familiar Calderon

Vice President and Corporate Secretary(not pictured)


With a global presence inmore than 100 countries,a network of more than 900 fi nancial institutions, and nearly 2,000 privatesector clients, IFC is uniquely positioned to create opportunity where it’s needed most.

We use our capital, expertise, and infl uence to help change the world for the better�—� to eliminate extreme poverty and to boost shared prosperity.

ANNUAL REPORT 2013


That’s the power of partnerships.


Partnerships take connectionsNo institution can solve the challenges of development on

its own. But IFC has a distinctive power to bring together

a variety of players to address the challenges collectively.

We work with our network of partners to craft innovative

solutions that make good things happen in diffi cult places.


We can end extreme poverty in a generation and

boost shared prosperity.


Partnerships take ambitionIn a world in which the needs of developing countries

far exceed the available resources, it takes ambition to

make a lasting difference in the lives of the poor. We are

stepping up to the challenge, unafraid to take risks, and

fi nding new ways to maximize our development impact.


Partnerships take focusOur clients hold the key to sustainable private sector

development in the poorest countries and regions of

the world. We use our distinctive combination of broad

global knowledge and deep local expertise to align

their needs with the opportunities for transformational

development in emerging markets.


In all our projects, we aim to do the things that no one else is able or inclined to. We seek to achieve maximum impact�—� profi tably and effi ciently, while ensuring we have the funds required to continue our growth.


Partnerships canimprove livesOur work helps expand employment, improve health

and education, and broaden access to fi nance for

those who need it most. In 2012, our clients supported

2.7 million jobs, treated 17.2 million patients, and

expanded opportunities for more than 3 million farmers.

2.7million jobs were supported by IFC clients in 2012.

17.2million patients were treated by IFC clients.

3.1million farmers benefi ted from our work with clients.


Partnerships canpromote prosperityWe help create the conditions needed for sustained

prosperity. In 2012, our advice helped governments

in 43 countries adopt 76 reforms to strengthen the

investment climate. Clients we invested in distributed

power to nearly 46 million customers and contributed

about $27 billion to government revenues.

$27billion in government revenues, generated by IFC clients.

46million customers received power because of IFC investments.

76investment-climate reforms achieved in 43 countries.


Partnerships can transform the worldHarnessing the creativity of the private sector, we

can help end extreme poverty — within a generation.

We can help lift the incomes of the poorest 40 per-

cent of the population — in every developing country.

Achieving these goals would change the world.


Our record investments and advice helped achieve signifi cant impact for the poor. Nearly half our investment projects were in the world’s poorest countries. We helped our clients support 2.7 million jobs and provide more than $265 billion in loans to micro, small, and medium enterprises in 2012. Our advice helped governments in 43 countries adopt 76 reforms related to the investment climate.

IFC’S GLOBAL IMPACT

$4.8BILLIONLatin America and the Caribbean


$25 BILLION in investments, including $18.3 billion in commitments for our own account

$3.3BILLIONEurope andCentral Asia

$1.7BILLIONSouth Asia

$3.5BILLIONSub-Saharan Africa

$2.9BILLIONEast Asia andthe Pacifi c

$2.0BILLIONMiddle East andNorth Africa


FY13 COMMITMENTS BY ENVIRONMENTAL AND SOCIAL CATEGORY

Commitments Number of Category ($ millions) Projects

A $884 17

B $5,490 167

C $6,764 269

FI $1,751 48

FI-1 $450 14

FI-2 $2,203 59

FI-3 $807 38

Total $18,349 612

IFC’S LARGEST COUNTRY EXPOSURES1

June 30, 2013 (Based on IFC’s Account)

Committed % of Country Portfolio Global(Global Rank) ($ millions) Portfolio

India (1) $4,453 9%

China (2) $3,002 6%

Turkey (3) $2,856 6%

Brazil (4) $2,690 5%

Russian Federation (5) $2,145 4%

Mexico (6) $1,584 3%

Nigeria (7) $1,334 3%

Egypt, Arab Republic of (8) $1,130 2%

Ukraine (9) $963 2%

Colombia (10) $947 2%

1. Excludes individual country shares of regional and global

projects.

FY13 COMMITMENTSDollar amounts in millions

Total $18,349 (100%)

BY INDUSTRY

Trade Finance $6,477 (35.3%)

Financial Markets $3,647 (19.9%)

Infrastructure $2,247 (12.2%)

Consumer & Social Services $1,635 (8.9%)

Manufacturing $1,314 (7.2%)

Agribusiness & Forestry $1,278 (7.0%)

Funds $890 (4.9%)

Telecommunications & Information Technology $472 (2.6%)

Oil, Gas & Mining $389 (2.1%)

BY REGION

Latin America and the Caribbean $4,822 (26.28%)

Sub-Saharan Africa $3,501 (19.08%)

Europe and Central Asia $3,261 (17.77%)

East Asia and the Pacific $2,873 (15.66%)

Middle East and North Africa $2,038 (11.11%)

South Asia $1,697 (9.25%)

Global $156 (0.85%)

Some amounts include regional shares of investments that are officially classified

as global projects.

BY PRODUCT

Loans1 $8,519 (46.43%)

Guarantees2 $6,959 (37.93%)

Equity3 $2,732 (14.89%)

Risk-management products $138 (0.75%)

1. Includes loan-type, quasi-equity products.

2. Includes trade finance.

3. Includes equity-type, quasi-equity products.

COMMITTED PORTFOLIOFor IFC’s own account as of June 30, 2013

Total $49,617 (100%)

BY INDUSTRY

Financial Markets $14,563 (29%)

Infrastructure $9,358 (19%)

Manufacturing $6,385 (13%)

Agribusiness & Forestry $4,251 (9%)

Consumer & Social Services $4,215 (8%)

Funds $3,733 (8%)

Trade Finance $3,081 (6%)

Oil, Gas & Mining $2,359 (5%)

Telecommunications & Information Technology $1,667 (3%)

Other $5 (0%)

BY REGION

Europe and Central Asia $10,994 (22%)

Latin America and the Caribbean $10,993 (22%)

Sub-Saharan Africa $7,833 (16%)

East Asia and the Pacific $7,726 (16%)

Middle East and North Africa $5,793 (12%)

South Asia $5,582 (11%)

Global $696 (1%)

Amounts include regional shares of investments that are officially classified as global projects.


WEIGHTED AND UNWEIGHTED INVESTMENT SERVICES DOTS SCORES

FY11 582

$21,181

FY12 668

$26,610

FY13 716

$29,674

FY13 INVESTMENT SERVICES DOTS SCORE BY INDUSTRY

IFC Total 716 (29,674)

Funds 84 (1,199)

Infrastructure 101 (4,805)

Financial Markets 219 (11,813)

Agribusiness & Forestry 79 (3,215)

Oil, Gas & Mining 28 (2,200)

Consumer & Social Services 94 (2,045)

Telecommunications & Information Technology 31 (1,067)

Manufacturing 80 (3,329)

Numbers at the left end of each bar are the total number of companies rated.

Numbers in parentheses represent total IFC investment ($ millions) in those projects.

FY13 INVESTMENT SERVICES DOTS SCORE BY REGION

IFC Total 716 (29,674)

Latin America and the Caribbean 159 (8,007)

East Asia and the Pacific 98 (3,922)

Middle East and North Africa 80 (3,283)

Europe and Central Asia 168 (8,477)

Sub-Saharan Africa 121 (3,094)

South Asia 81 (2,707)


Numbers in parentheses represent total IFC investment ($ millions) in those projects.

FY13 ADVISORY SERVICES PROGRAM EXPENDITURESDollar amounts in millions

Total 231.9 (100%)

BY REGION

Sub-Saharan Africa 65.4 (28%)

East Asia and the Pacific 38.5 (17%)

Europe and Central Asia 36.4 (16%)

South Asia 33.6 (14%)

Latin America and the Caribbean 25.5 (11%)

Middle East and North Africa 20.4 (9%)

Global 12.2 (5%)

BY BUSINESS LINE

Investment Climate 74.8 (32%)

Access to Finance 62.6 (27%)

Sustainable Business 55.0 (24%)

Public-Private Partnerships 39.5 (17%)

67%

76%

68%

75%

66%

FY11

FY12

FY13

73%

Unweighted Weighted

79%

73%

70%

68%

64%

56%

55%

49%

66%

74%

70%

65%

64%

61%

60%

66%

IFC’S CLIENT LEADERSHIP AWARDEvery year, IFC recognizes an organ-ization that refl ects our values and symbolizes our shared commitment to sustainable development. We present our Client Leadership Award to a corporate client that best demonstrates leadership, innovation, and operational excellence.

This year, the award went to Vegpro Group, a dynamic agribusiness company in Kenya. It has been an IFC client for nearly two decades.

Vegpro is engaged in a tricky market: supplying fresh food to supermarkets in the European Union. As shoppers demand high- quality, ready- to-eat vegetables, growers must assure year- round supply and quick delivery while complying with strict environmental and safety standards.

But the company’s creative approach has transformed it into Kenya’s largest vegetable producer, with an annual turnover of $100 million. All of the fresh produce it supplies to the retail market is certifi ed, which usually means higher income for suppliers�—� 4,000 of whom are small- scale farmers.

Vegpro is one of Kenya’s largest private employers, with 7,000 employees. About three- quarters of them are women�—� who enjoy starting wages that are almost 50 percent higher than the average daily minimum, in addition to benefi ts such as free primary healthcare and counseling.

Numbers at the left end of each bar for unweighted DOTS score are the total number of

companies rated. Numbers at the left end of each bar for weighted DOTS score represent

total IFC investment ($ millions) in those projects. FY11 and FY12 weighted scores have

been restated to reflect methodology changes (see page 82).


IFC ANNUAL REPORT 2013 RESULTS SUPPLEMENT

IFC Report Builder Results 050328 IFC_RB13_Results_Region_v4 09/16/13 page 1

Results by Region

EAST ASIA AND THE PACIFIC

Poverty is declining in East Asia and the Pacific, but one third of the region’s population remains poor. IFC’s work in the region focuses on supporting sustainable development — led by the private sector — to ensure that economic growth reaches all segments of society.

Our commitments in East Asia and the Pacific reached a record $3.4 billion in FY13, including $500 million mobilized from other investors. Advisory Services spending in the region climbed to $38.5 million.

IFC’s projects have created jobs and opportunity for those who need them most. In 2012, our clients supported 716,000 farmers, helped educate more than 2,000 students, and provided employment opportunities for over 700,000 people in the region.

FY13 DEVELOPMENT OUTCOME SCORES

Development Outcome 70%

66%

Financial Performance 58%

50%

Economic Performance 65%

60%

Environment & 71%

Social Performance 67%

Private Sector 81%

Development Impact 77%


East Asia and the Pacific IFC

PROJECT FINANCING AND PORTFOLIO, BY REGION

EAST ASIA AND THE PACIFIC $ millions, for the years ending June 30 FY131 FY121

IFC commitments 2,873 2,548

Loans 1,085 1,021

Equity 354 343

Guarantees and risk management 1,435 1,184

Core Mobilization Commitments* 502 376

Total commitments 3,376 2,924

Committed portfolio for IFC’s account 7,726 7,216

Committed portfolio for Loan Syndications** 849 788

Total committed portfolio 8,575 8,004

* Including Loan Syndications (B-Loans, Parallel Loans, and ALPS), IFC Initiatives, AMC, Other Mobilization by Decision, and

Public-Private Partnerships (PPP) Mobilization, as applicable for this Region.

Including B-Loans and Agented Parallel Loans.

1 Amounts include regional shares of investments that are officially classified as global projects.

LARGEST COUNTRY EXPOSURES1 IN FY13: EAST ASIA AND THE PACIFIC

COMMITTED PORTFOLIO ($ millions)

RANK WITHIN REGION COUNTRY FY13 FY12

1 China 3,002 2,429

2 Indonesia 916 919

3 Philippines 749 1,055

Based on IFC’s Account, as of June 30, 2013.

1 Excludes individual country shares of regional and global projects.

98

716

98

719

98

719

97

702

98

714

**



Results by Region

EAST ASIA AND THE PACIFIC (continued)

DEVELOPMENT REACH

EAST ASIA AND THE PACIFIC PORTFOLIO

CY11 CY12

MSME Loans (number of loans) 4,089,379 4,449,260

MSME Loans (amount in $ million) 51,485 77,015

Power Generation (millions of customers)* 19.2 22.3

Water Distribution (millions of customers) 11.5 10.0

Gas Distribution (millions of customers)** 20.4 31.1

Phone Connections (millions of customers) 2.4 4.3

Farmers Reached 1,401,178 716,280

Patients Reached*** 1,928,443 2,699,059

Students Reached 1,675 2,122

Employment 713,448 728,098

Domestic Purchase of Goods and Services ($ million) 16,079.6 12,176

Payments to Government ($ million) 4,076 5,434

* CY11 total Power Generation customers revised due to the restatement of one client value in East Asia and the Pacific.

One client in East Asia and the Pacific contributed 31.14 million of Gas Distribution customers in CY12.

One client in East Asia and the Pacific contributed 1,948,956 to Patients Reached in CY12.

**

***



Results by Region

EUROPE AND CENTRAL ASIA

IFC invested $4.2 billion in Europe and Central Asia in FY13, including nearly $1 billion mobilized from other investors. Through our investment and advisory programs, we focused on supporting the poorest countries, improving lives in fragile and conflict-affected areas, and facilitating projects related to climate change.

About half of our total commitments in the region were directed to the financial sector, which enabled us to expand access to finance for businesses and individuals, especially in underserved countries and regions.

We invested more than $1 billion in projects that target micro, small, and medium enterprises, and nearly the same amount in the manufacturing, agribusiness, and services sectors. Investments in the infrastructure and natural-resources sectors totaled more than $700 million.



66%


50%


60%

Environment & 64%


Private Sector 72%



Europe and Central Asia IFC


EUROPE AND CENTRAL ASIA $ millions, for the years ending June 30 FY131 FY121


Loans 1,927 1,677

Equity 277 288

Guarantees and risk management 1,057 951

Core Mobilization Commitments* 944 1,092



Committed portfolio for Loan Syndications** 4,792 3,957




Including B-Loans, ALPS, and Agented Parallel Loans.


LARGEST COUNTRY EXPOSURES1 IN FY13: EUROPE AND CENTRAL ASIA



1 Turkey 2,856 2,329

2 Russian Federation 2,145 2,263

3 Ukraine 963 811



168

716

168

719

169

719

164

702

167

714

**



Results by Region

EUROPE AND CENTRAL ASIA (continued)

DEVELOPMENT REACH

EUROPE AND CENTRAL ASIA PORTFOLIO

CY11 CY12



Power Generation (millions of customers) 1.68 1.3

Water Distribution (millions of customers)* 6.6 5.2

Gas Distribution (millions of customers) 0.2 0.4

Power Distribution (millions of customers) 14.8 10.9


Farmers Reached 209,611 361,833

Patients Reached** 3,654,620 4,530,360


Employment 412,629 423,938



* One client in Europe and Central Asia contributed 4.4 million of Water Distribution customers in CY12.

CY11 total Patients Reached revised due to the restatement of one client value in Europe and Central Asia.**



Results by Region

LATIN AMERICA AND THE CARIBBEAN

IFC provided a record $6.5 billion to 129 projects in Latin America and the Caribbean in FY13, including $1.7 billion mobilized from other financial institutions. Our priorities in the region include expanding access to finance and encouraging good environmental and social performance. We also work to boost competitiveness and strengthen regional integration.

Our clients in the region supported nearly 680,000 jobs and helped educate about 900,000 students last year. In the financial sector, they provided nearly 15 million loans valued at about $82 billion to micro, small, and medium enterprises.

Supporting smaller economies is a priority for us — we invested $1 billion in such economies in Central America and the Caribbean in FY13. We also invested more than $400 million in projects in the frontier regions of north and northeast Brazil and the Amazon.

DEVELOPMENT REACH

LATIN AMERICA AND THE CARIBBEAN PORTFOLIO

CY11 CY12









Patients Reached 1,819,454 2,153,212


Employment 680,870 678,982





66%


50%


60%

Environment & 70%


Private Sector 82%



Latin America and the Caribbean IFC


LATIN AMERICA AND THE CARIBBEAN $ millions, for the years ending June 30 FY131 FY121


Loans 2,234 1,284

Equity 959 564


Core Mobilization Commitments* 1,750 1,292







Including B-Loans, ALPS, Agented Parallel Loans, and Unfunded Risk Participation (URP) (FY13 only).


LARGEST COUNTRY EXPOSURES1 IN FY13: LATIN AMERICA AND THE CARIBBEAN



1 Brazil 2,690 2,572

2 Mexico 1,584 1,188

3 Colombia 947 954



159

716

161

719

160

719

150

702

159

714

**



Results by Region

MIDDLE EAST AND NORTH AFRICA

By supporting private sector development, IFC has played an important role in addressing the challenges facing the Middle East and North Africa. Our commitments in the region totaled $2.8 billion in FY13, including more than $760 million mobilized from other investors — in spite of the region’s political uncertainty.

We continued to implement an integrated Investment and Advisory Services strategy, making access to finance a priority. In FY13, our clients provided about 1.9 million loans to micro, small, and medium enterprises in the region, totaling over $13 billion.

Improving the region’s investment climate has also been a strategic priority for us. So has strengthening education. In several countries, we rolled out the E4E Initiative for Arab Youth, a program designed to equip youth with the skills and training that employers want most.

DEVELOPMENT REACH

MIDDLE EAST AND NORTH AFRICA PORTFOLIO

CY11 CY12





Power Distribution (millions of customers)* 11.4 10.7





Employment 108,731 244,491



* One client in Middle East and North Africa contributed 10.22 million of Power Distribution customers in CY12.



66%


50%


60%

Environment & 66%


Private Sector 69%



Middle East and North Africa IFC


MIDDLE EAST AND NORTH AFRICA $ millions, for the years ending June 30 FY131 FY121


Loans 547 949

Equity 404 363

Guarantees and risk management 1,088 897










LARGEST COUNTRY EXPOSURES1 IN FY13: MIDDLE EAST AND NORTH AFRICA



1 Egypt, Arab Republic of 1,130 1,153

2 Pakistan 827 929

3 Jordan 625 656



80

716

79

719

80

719

76

702

77

714

**



Results by Region

SOUTH ASIA

IFC has been delivering substantial impact in South Asia, despite challenging local conditions that include rising income inequality and severe poverty.

In FY13, our total commitments in the region totaled nearly $2.5 billion, up almost 60 percent from the previous year. Resources mobilized by IFC from other investors tripled, to $764 million. Advisory Services expenditures reached $33.6 million.

To help the region grow out of poverty, IFC worked to increase access to finance, infrastructure, and markets. Our clients provided phone access to more than 120 million customers and delivered the equivalent of $23.7 billion in loans to micro, small, and medium enterprises.

Climate change is another priority for IFC in South Asia, especially because of the region’s vulnerability to rising temperatures. Our projects aimed at achieving energy efficiency, particularly in agriculture and irrigation.

DEVELOPMENT REACH

SOUTH ASIA PORTFOLIO

CY11 CY12







Phone Connections (millions of customers)* 97.4 120.5



Employment 326,569 327,431


Payments to Government ($ million) 861 902

* One client in South Asia contributed 112.7 million of Phone Connections customers in CY12.



66%


50%


60%

Environment & 75%


Private Sector 84%



South Asia IFC


SOUTH ASIA $ millions, for the years ending June 30 FY131 FY121


Loans 1,006 678

Equity 264 320

Guarantees and risk management 427 314




Committed portfolio for Loan Syndications** 1,091 570




Including B-Loans, Agented Parallel Loans, ALPS, and Unfunded Risk Participation (URP).


LARGEST COUNTRY EXPOSURES1 IN FY13: SOUTH ASIA



1 India 4,453 3,965

2 Bangladesh 602 270

3 Sri Lanka 204 178



81

716

82

719

81

719

84

702

81

714

**



Results by Region

SUB-SAHARAN AFRICA

IFC’s total commitments in Sub-Saharan Africa topped $5.2 billion in FY13, including nearly $1.8 billion mobilized from other investors.

Our work aims to promote sustainable, inclusive growth across the region. We build on the momentum in more successful countries, helping improve the investment climate and expand access to finance. In others, we help to put in place some of the essential building blocks of private sector development: basic infrastructure to support agribusiness and manufacturing competitiveness.

Our clients created more than 250,000 jobs in the region last year. They also reached 675,000 farmers, an increase of more than 70 percent from the previous year.

The region accounted for nearly 30 percent of IFC’s Advisory Services expenditures in the fiscal year, receiving $65.4 million.



66%


50%


60%

Environment & 60%


Private Sector 76%



Sub-Saharan Africa IFC


SUB-SAHARAN AFRICA $ millions, for the years ending June 30 FY131 FY121


Loans 1,691 1,042

Equity 349 358











LARGEST COUNTRY EXPOSURES1 IN FY13: SUB-SAHARAN AFRICA



1 Nigeria 1,334 1,106

2 South Africa 900 646

3 Ghana 849 726



121

716

122

719

122

719

123

702

123

714

**



Results by Region

SUB-SAHARAN AFRICA (continued)

DEVELOPMENT REACH

SUB-SAHARAN AFRICA PORTFOLIO

CY11 CY12

MSME Loans (number of loans) 450,560 799,343



Water Distribution (millions of customers)* 4.9 5.1




Patients Reached 933,800 915,069

Students Reached** 138,921 118,993

Employment 255,833 254,013



* CY11 total Water Distribution customers revised due to the restatement of one client value in Sub-Saharan Africa. One client in Sub-Saharan Africa contributed 4.7 million of Water Distribution customers in CY12.

One client in Sub-Saharan Africa contributed 107,000 of Students Reached in CY12. **

Results by Advisory

ACCESS TO FINANCE


IFC Report Builder Results 050328 IFC_RB13_Results_Advisory_v2 09/13/13 page 1

IFC helps increase the availability and affordability of financial services for individuals and for micro, small, and medium enterprises. We help our financial clients provide broad-based financial services and build the financial infrastructure necessary for sustainable growth and employment.

At the end of FY13, we had an active portfolio of 263 projects — valued at $342.6 million — that promoted access to finance in 72 countries. In FY13, our advisory program expenditures reached about $62.6 million, of which 61 percent was in countries eligible to borrow from the International Development Association — or IDA, the World Bank’s fund for the poorest, and 13 percent was in fragile and conflict-affected areas.

PROGRAM EXPENDITURES BY PRODUCT

ACCESS TO FINANCE: SELECTED 2012 HIGHLIGHTS

• We worked with 149 financial intermediaries, in partnership with IFC Investment

Services, that provided over 14.2 million microfinance and SME loans (15 percent in IDA

countries), totaling nearly $103 billion.

• We supported 20 financial intermediaries, in partnership with IFC Investment Services,

that provided 207,000 housing finance loans, totaling more than $7.3 billion.

• We helped improve financial markets infrastructure through working with collateral

registries that enabled over 40,000 SMEs to receive $4.5 billion in financing secured

with movable property, and helped create, strengthen, or license four credit bureau

operators.

• We helped firms avoid greenhouse gas emissions estimated at 2.3 million metric

tons annually (calculation based on methodologies in place before adoption of a

standardized methodology in 2012).

Microfinance$13.4 million

Sustainable Energy Finance$9.4 million

SME Banking$8.0 million

Retail Payments and Mobile Banking$4.7 million

Credit Bureaus$4.3 million

Other$22.8 million



Results by Advisory

INVESTMENT CLIMATE

IFC helps governments implement reforms that improve the business environment and encourage and retain investment, thereby fostering competitive markets, growth, and job creation. We also help resolve legal and policy weaknesses that inhibit investment.

At the end of FY13, IFC had an active portfolio of 143 investment- climate projects in 65 countries, valued at $288.9 million. In FY13, our advisory program expenditures in these projects totaled $74.8 million, of which 76 percent was in IDA countries, and 29 percent was in fragile and conflict-affected areas.


INVESTMENT CLIMATE: SELECTED 2012 HIGHLIGHTS

• We helped governments in 43 countries adopt 76 investment climate reforms

(55 reforms in IDA countries, including 26 reforms in fragile and conflict-

affected situations).

• Of the 76 reforms, 14 reforms supported entrepreneurs with starting a business;

12 helped businesses comply with license and permit requirements; and five were

agribusiness-sector reforms.

• We helped governments with industry-level reform and investment promotion, resulting

in an estimated $750 million in new investments.

Business Regulation$19.8 million

Business Taxation$8.3 million

Industry-specific IC: Real Sectors$8.0 million

IC for Infrastructure & Social Sectors$7.4 million

Trade Logistics$6.3 million

Other$25.0 million



Results by Advisory

PUBLIC-PRIVATE PARTNERSHIPS

IFC provides support for governments to design and implement public-private partnerships in infrastructure and other basic public services. Our advice helps maximize the potential of the private sector to increase access to public services such as electricity, water, healthcare, and education while enhancing their quality and efficiency.

At the end of FY13, we had an active portfolio of 103 PPP projects in 53 countries, valued at about $126 million. In FY13, our advisory program expenditures in the area reached $39.5 million.


PUBLIC-PRIVATE PARTNERSHIPS: SELECTED 2012 HIGHLIGHTS

• We helped governments sign nine public-private partnership contracts (six in IDA

countries, including one in fragile and conflict-affected situations).

• These partnerships are expected to improve access to infrastructure and health services

for over 3 million people (1.7 million in fragile and conflict-affected situations), and

mobilize $750 million in private investment ($430 million in IDA countries, including

$390 million in fragile and conflict-affected situations).

Advisory Mandate$32.4 million

PPP—Other$3.8 million

PPP Upstream Work$3.0 million

Post Advisory Mandate Support$0.4 million



Results by Advisory

SUSTAINABLE BUSINESS

IFC works with clients to promote sound environmental, social, governance, and industry standards; catalyze investment in clean energy and resource efficiency; and support sustainable supply chains and community investment. We work in several sectors including agribusiness and forestry; manufacturing and services; infrastructure; oil, gas, and mining; and financial markets.

At the end of FY13, we had an active portfolio of 157 sustainable-business projects in 58 countries, valued at $279.7 million. In FY13, our advisory program expenditures related to this area totaled $55 million.


SUSTAINABLE BUSINESS: SELECTED 2012 HIGHLIGHTS

• We helped 3 million people receive off-grid lighting; enabled 1.3 million people to gain

access to village phones; and provided training to almost 350,000 people (76 percent in

IDA countries), including to farmers, entrepreneurs, and managers of small and medium

enterprises.

• We assisted firms to improve their corporate governance practices, which contributed

to additional financing of $200 million, of which $150 million was from IFC.

• We enabled firms to avoid greenhouse-gas emissions estimated at almost 1.4 million

metric tons annually (calculation based on methodologies in place before adoption of a

standardized methodology in 2012).

• We assisted clients to sustainably manage almost 300,000 hectares of land.

• We helped clients increase their sales revenues by $156 million.

Farmer and SME Training$14.1 million

Clean Energy$12.9 million

Resource Efficiency$7.4 million

Environmental, Social, and Trade Standards$7.3 million

Corporate Governance$7.1 million

Other$6.2 million

Results by Industry

AGRIBUSINESS & FORESTRY


IFC Report Builder Results 050328 IFC_RB13_Results_Industry_v4 09/13/13 page 1

Agribusiness has an important role to play in poverty reduction. The agricultural sector often accounts for at least half of GDP and employment in many developing countries, which makes it a priority for IFC.

IFC provides support for the private sector to address rising demand in an environmentally sustainable and socially inclusive way. To help clients finance inventories, seeds, fertilizers, chemicals, and fuel for farmers, IFC offers working-capital facilities. To facilitate trade and lower costs, we pursue investments in infrastructure such as warehouses and cold-storage facilities. To bring land into sustainable production, we work to improve productivity by transferring technologies and making the best use of resources.

In FY13, our new commitments in agribusiness and forestry totaled nearly $1.3 billion, accounting for about 7 percent of commitments for IFC’s own account.

DEVELOPMENT REACH

AGRIBUSINESS & FORESTRY PORTFOLIO CY11 CY12

Employment 386,145 421,503

Female Employment 116,987 124,003

Number of Farmers* 3,296,544 3,084,783

Number of MSMEs Reached* ** 1,020,564 2,012,360

Domestic Purchase of Goods and Services ($ million) 4,560 6,697


* Including all reach in IFC.

One client in Latin America and the Caribbean contributed 1,008,864 MSME reached in CY12. **



66%


50%


60%

Environment & 67%


Private Sector 79%



Agribusiness & Forestry IFC

PROJECT FINANCING AND PORTFOLIO, BY INDUSTRY

AGRIBUSINESS & FORESTRY $ millions, for the years ending June 30 FY13 FY12


Loans 1,073 897

Equity 72 64






Total portfolio 4,691 3,902

* Including Loan Syndications (B-Loans, Parallel Loans, and ALPS), IFC Initiatives, AMC, and Other Mobilization by Decision,

as applicable for this Industry.

Including B-Loans, ALPS (FY12 only), and Agented Parallel Loans.

79

716

81

719

81

719

79

702

80

714

**



Results by Industry

CONSUMER & SOCIAL SERVICES

IFC is the world’s largest multilateral investor in private healthcare and education. We work to increase access to high-quality healthcare and education while also supporting job-creating sectors such as tourism, retail, and property. We help improve standards of quality and efficiency, facilitate the exchange of best practices, and create jobs for skilled professionals.

In addition to making direct investments in socially responsible companies, our role includes sharing industry knowledge and expertise, funding smaller companies, raising medical and education standards, and helping clients expand services to lower-income groups.

In FY13, our new commitments in consumer and social services totaled about $1.6 billion, or nearly 9 percent of IFC’s commitments for our own account.

DEVELOPMENT REACH

CONSUMER & SOCIAL SERVICES PORTFOLIO CY11 CY12

Employment 322,844 342,807


Number of Patients* 13,009,309 17,201,088

Number of Students** 937,001 1,036,389

Net Income ($ million) 1,637 1,198

Net Sales ($ million) 16,968 21,145



* CY11 total Patients Reached revised due to the restatement of one client value in Europe and Central Asia.

Including all reach in IFC.**



66%


50%


60%

Environment & 67%


Private Sector 69%



Consumer & Social Services IFC


CONSUMER & SOCIAL SERVICES $ millions, for the years ending June 30 FY13 FY12


Loans 1,310 1,053

Equity 325 268







* Including Loan Syndications (B-Loans, Parallel Loans, and ALPs), IFC Initiatives, AMC, and Other Mobilization by Decision,


Including B-Loans and ALPs.

94

716

94

719

94

719

95

702

95

714

**



Results by Industry

FINANCIAL MARKETS

Sound, inclusive, and sustainable financial markets are vital to development as they ensure efficient resource allocation. IFC’s work with financial intermediaries has helped strengthen financial institutions and overall financial systems. It has also allowed us to support far more micro, small, and medium enterprises than we would be able to on our own.

Working through financial intermediaries enables IFC to encourage them to become more involved in sectors that are strategic priorities such as women-owned businesses and climate change, and in underserved regions such as fragile and conflict-affected states as well as in housing, infrastructure, and social services.

In FY13, our commitments in financial markets totaled about $3.6 billion, about 20 percent of commitments for IFC’s own account.

DEVELOPMENT REACH

FINANCIAL MARKETS PORTFOLIO CY11 CY12

SME loans ($ million)* 181,253 241,299

SME loans (million of loans)* 3.29 5.79

Microfinance loans ($ million)* 19,842 24,028

Microfinance loans (million of loans)* 19.71 21.98

Housing finance loans ($ million)** 6,241 23,614

Housing finance loans (million of loans)** 0.15 0.44

* Portfolio reach figures represent SME and microfinance outstanding loan portfolio of IFC clients as of end of CY11 and CY12, for MSME-oriented financial institutions/projects. 268 and 285 clients were required to report their end-of-year SME and microfinance

portfolios in CY11 and CY12, respectively. 252 and 269 clients did so for CY11 and CY12, respectively. The missing data were extrapolated.

Portfolio reach figures represent housing finance outstanding loan portfolio of IFC clients as of end of CY11 and CY12, for housing finance-oriented financial institutions/projects. 24 and 38 clients were required to report their end-of-year housing finance

portfolios in CY11 and CY12, respectively. 24 and 27 clients did so for CY11 and CY12, respectively. The missing data were extrapolated.

GLOBAL TRADE FINANCE FY08 FY09 FY10 FY11 FY12 FY13

Guarantees Issued (US$ amount)* $1,448 m $2,376 m $3,461 m $4,623 m $5,975 m $6,500 m

Number of transactions 2,153 3,707 4,292 4,699 5,964 6,485

SMEs Supported (by number of transactions) 84% 84% 83% 79% 79% 80%

IDA Countries (US$ amount) $741 m (51%) $1,219 m (51%) $1,761 m (51%) $2,439 m (53%) $2,844 m (48%) $3,316 m (51%)

Africa Volume (US$ amount) $597 m (41%) $635 m (27%) $764 m (22%) $931 m (20%) $1,300 m (22%) $1,442 m (22%)

South-South Trade Supported (by number of transactions) 39% 45% 46% 43% 41% 41%

Total Trade Supported (US$ amount)* $1,877 m $3,075 m $3,971 m $5,599 m $7,524 m $7,764 m

* Adjusted to reflect the historical exchange rate.

**



66%


50%


60%

Environment & 61%


Private Sector 76%



Financial Markets IFC


FINANCIAL MARKETS (INC. TRADE FINANCE AND FUNDS) $ millions, for the years ending June 30 FY13 FY12


Loans 2,324 2,276

Equity 1,806 1,240







* Including Loan Syndications (B-Loans, Parallel Loans, and ALPs), IFC Initiatives, AMC, and Other Mobilization by Decision,


Including B-Loans, ALPs (FY12 only), and Agented Parallel Loans.

219

716

220

719

219

719

206

702

217

714

**



Results by Industry

INFRASTRUCTURE

Modern infrastructure spurs economic growth, improves living standards, and can represent an opportunity to address emerging development challenges, including rapid urbanization and climate change.

It is also an area in which the private sector can make a significant contribution, providing essential services to large numbers of people, efficiently, affordably, and profitably. This is IFC’s focus: supporting private infrastructure projects whose innovative, high-impact business models can be widely replicated.

We help increase access to power, transport, and water by financing infrastructure projects and advising client governments on public-private partnerships. We mitigate risk and leverage specialized financial structuring and other capabilities. In FY13, our new commitments in this sector totaled $2.2 billion, or about 12 percent of commitments for IFC’s own account.

DEVELOPMENT REACH

INFRASTRUCTURE PORTFOLIO CY11 CY12

Employment 448,537 448,094





Airport Passengers (million)* 9.9 18.0

Airline Passengers (million)* 13.6 10.2

Transportation: Shipping, Freight & Cargo (M TEU Containers) 9.9 12.6


* In FY13, IFC adjusted its methodology to better estimate the numbers of airport passengers and airline passengers reached.



66%


50%


60%

Environment & 81%


Private Sector 86%



Infrastructure IFC


INFRASTRUCTURE $ millions, for the years ending June 30 FY13 FY12


Loans 1,845 1,058

Equity 330 339









Including B-Loans, Agented Parallel Loans, and ALPS.

101

716

102

719

101

719

103

702

98

714

**



Results by Industry

OIL, GAS & MINING

Industries that can harness natural resources are vital for many of the world’s poorest countries. They are a key source of jobs, energy, government revenues, and a wide array of other benefits for local economies. In many countries, large-scale sustainable investments in this sector can produce large economic gains.

IFC’s mission in the oil, gas, and mining sector is to help developing countries realize these benefits. We provide financing and advice for private sector clients. We also help governments adopt effective regulations and strengthen their capacity to manage these industries across the value chain.

We support private investment in this sector, and we work to ensure that local communities enjoy concrete benefits. In FY13, our new commitments in the sector totaled $390 million, or about 2 percent of commitments for IFC’s own account.

DEVELOPMENT REACH

OIL, GAS & MINING PORTFOLIO CY11 CY12

Employment 102,747 106,772


Gas Distribution (millions of customers)* 22.4 33.8

Community Development Outlay ($ million) 102 150



* Including all reach in IFC. One client in East Asia and the Pacific contributed 31.14 million of Gas Distribution customers in CY12.



66%


50%


60%

Environment & 62%


Private Sector 82%



Oil, Gas & Mining IFC


OIL, GAS & MINING $ millions, for the years ending June 30 FY13 FY12

IFC commitments 389 491

Loans 336 387

Equity 53 104



Total commitments 736 1,121






Including B-Loans, ALPS, and Unfunded Risk Participation (URP).

28

716

27

719

28

719

29

702

28

714

**



Results by Industry

MANUFACTURING

The manufacturing sector plays a vital role in creating opportunity and reducing poverty in developing countries. IFC’s manufacturing clients tend to create or maintain more employment than those in any other sector.

We have increased our activities in the sector, which includes construction materials, energy-efficient machinery, chemicals, and equipment for solar and wind power. We invest in companies that are developing new products and markets, and restructuring and modernizing to become internationally competitive.

As these industries represent some of the most carbon- intensive sectors, we are helping clients develop and undertake investments that help reduce carbon emissions and energy consumption.

In FY13, our new commitments in the manufacturing sector totaled $1.3 billion, or about 7 percent of commitments for IFC’s own account.

DEVELOPMENT REACH

MANUFACTURING PORTFOLIO CY11 CY12

Employment 368,551 356,854


Net Income ($ million) 3,521 2,635

Net Sales ($ million) 64,843 48,274





66%


50%


60%

Environment & 64%


Private Sector 71%



Manufacturing IFC


MANUFACTURING $ millions, for the years ending June 30 FY13 FY12


Loans 1,270 838

Equity 43 179









B-Loans, ALPS, Agented Parallel Loans, and Unfunded Risk Participation (URP) (FY13 only).

80

716

80

719

81

719

81

702

80

714

**



Results by Industry

TELECOMMUNICATIONS, MEDIA & TECHNOLOGY

Modern information and communication technologies make it easier for the poor to obtain access to services and resources. They expand opportunity and make markets and institutions more efficient. IFC works to extend the availability of such technologies. We channel investments toward private companies that build modern communications infrastructure and information-technology businesses, and develop climate-smart technologies.

IFC increasingly helps clients move beyond their own national borders and into other developing markets. In FY13, our new commitments in this sector totaled about $470 million.

DEVELOPMENT REACH

TELECOMMUNICATIONS & INFORMATION TECHNOLOGY PORTFOLIO CY11 CY12

Employment 88,979 116,461


Phone Connections (millions of customers)* 172 192


* One client in South Asia contributed 112.7 million customers in CY12.



66%


50%


60%

Environment & 64%


Private Sector 68%



Telecommunications & Information Technology IFC


TELECOMMUNICATIONS & INFORMATION TECHNOLOGY $ millions, for the years ending June 30 FY13 FY12

IFC commitments 472 247

Loans 361 159

Equity 103 89



Total commitments 1,052 412







31

716

31

719

31

719

25

702

31

714

**

HOW IFC CREATESOPPORTUNITY

This is what we do best.We work in more than 100 developing countries,

connecting clients and using our expertise to help them achieve sustainable growth�—� by fi nancing private sector investment, mobilizing capital in international fi nancial markets, and providing advice to businesses and governments.

This work enables companies to grow and create jobs, improve corporate governance and environmental perfor-mance, and contribute to their local communities.

We go wherever we are needed most, and deploy our resources wherever they will achieve the greatest impact. In everything we do, we ask ourselves four questions:

» Are we helping reduce poverty and promoting shared prosperity?

» Are we achieving maximum impact? » Are we doing the type of things that no one else is able or inclined to?

» Are we doing so profi tably and effi ciently?

Consider the scale of the challenge:

» Across the world, 1.2 billion people struggle on less than $1.25 a day.

» About 600 million jobs must be created within a decade�—� just to accommodate young people entering the workforce.

» Nearly 1 billion people go hungry each day. » $1 trillion a year in fi nancing is needed to modernize infrastructure in developing countries.

These are needs that can’t possibly be fi lled without tapping the capital and creativity of the private sector. Private enter-prises create nine out of every 10 jobs in developing countries. They spur innovation, produce the goods and services people need to improve their lives, and generate most of the tax revenue that governments need to provide essential services for their citizens.

The private sector, in short, provides the most time- tested means of ending poverty quickly and sustainably.

But private sector development doesn’t occur in a vacuum. It happens only when governments and the private sector can work together to ensure that businesses operate and grow in ways that promote prosperity for all.

INNOVATION, INFLUENCE, DEMONSTRATION, IMPACT

IFC brings a distinctive set of comparative advantages to help reduce poverty and foster inclusive economic growth�—� by leveraging the power of the private sector.

1.2billion people subsist on less than $1.25 a day�—�nearly one out of every fi ve people on the planet.

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It takes creativity to address the most urgent challenges of development�—� to end poverty, to tackle the dangers of climate change, to introduce modern healthcare to remote corners of the world.

For more than half a century, IFC has innovated to strengthen private sector development wherever it’s needed most. We have helped businesses in developing countries create and preserve jobs�—� by providing loans and investment to enable them to grow quickly and sustainably, and by providing advice that helps them to innovate, raise standards, and mitigate risks.

How IFC Creates Opportunity

PARTNERING FOR


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INNOVATION


Healthcare

IMPROVING SERVICES IN THE MOST CHALLENGING AREAS

We are bringing together governments, the private sector, and civil society organizations in innovative ways to help the poor. 17.2

million patients received healthcare through our clients in 2012.


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Outside the Hospital do Subúrbio in the Brazilian city of Salvador, all seems tran-quil: white stucco buildings, manicured lawns, and palm trees swaying in the gentle breeze. Inside, it’s another story.

The state- of-the- art hospital�—� which serves some of the city’s poorest neighborhoods�—� has conducted more than 1.8 million medical procedures since it opened three years ago. It also has created 1,200 jobs under a public- private partnership that IFC helped the government set up. Last year, the hospital was named one of the world’s 100 most innovative proj-ects by KPMG, a consulting fi rm.

Hospital do Subúrbio’s success illustrates what can be achieved when government authorities join forces with the private sector to address a major development challenge. Brazil and other developing countries have achieved remarkable health advances in recent years. Yet signifi cant obstacles remain. The benefi ts often don’t reach people who need them most�—� the poor.

The private sector is an essential part of the solution. In sub- Saharan Africa, where public resources remain scarce, the private sector provides about 60 percent of the fi nancing available for healthcare. A poor woman with a sick child is just

Left: A patient is treated at Hospital do Subúrbio. Brazil’s fi rst public- private partnership in health has dramatically improved emer-gency hospital services for 1 million people in the state of Bahia.

Above: A road show in the Indian state of Meghalaya encourages low-income households to enroll in the state’s universal health insurance program, which IFC supported jointly with the World Bank.

as likely to go to a private hospital or clinic as to a public facility.

In some of the world’s most challenging markets, IFC is helping bring together governments, the private sector, and civil society organizations to improve the quality of healthcare. Since we launched our Health in Africa Initiative in 2007, we have supported legal, regulatory, and institutional reforms to improve patient safety and the quality of private health services in eight countries.

Our advice led to the enactment of the Kenya Health Bill of 2012, which creates equal opportunity for public and private healthcare providers and is expected to result in expanded coverage for up to 20 million Kenyans. In South Sudan�—� where the maternal mortality rate is one of the world’s highest�—� our advice helped the government set up the Drug and Food Control Authority, which will help improve the quality of medicines available in the country.

We also see signifi cant opportunity to improve the quality of healthcare in India’s low- income states. In the state of Meghalaya, where health insur-ance is limited, we helped the government arrange a public- private partnership that makes health insur-ance available to all 3 million of the state’s residents, regardless of income.


The science is unequivocal: without concerted action to reduce greenhouse emissions, the world could grow warmer by 4 degrees Celsius within this century. The consequences could be devastating�—�

unprecedented heat waves, drought, and fl oods that put prosperity out of reach for millions of people in developing countries and roll back decades of prog-ress in development.

Combating the dangers of climate change will be costly: up to $100 billion a year for developing countries. But it can be done if the resources and creativity of the private sector are tapped.

IFC is fi nding ways to unlock private capital for climate- smart projects. We’re helping fi nance the development of innovative technologies and encour-aging a shift toward energy effi ciency and renewable energy. We also provide fi nancing and advice to help countries mitigate and adapt to climate change.

Since 2005, IFC has invested $10.5 billion in climate- related investments, including $2.5 billion just in FY13. We issued the world’s largest “green” bond this year, raising $1 billion specifi cally for climate- related investments�—� an achievement that

Climate Change

ADDRESSING GLOBAL WARMINGIFC is providing fi nancing and advice to help countries mitigate and adapt to a formidable global threat.


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underscored the private sector’s growing demand for triple- A-rated green bonds. We also launched the IFC Catalyst Fund�—� an innovative fund of funds, managed by IFC Asset Management Company, focused on climate- related investments.

In South Africa, we provided an innovative fi nancing package�—� which included $225 million in funds mobilized through loan syndications and $41.5 million in donor funds�—� to support the construction of the region’s fi rst concentrated-solar- power plants. The Khi Solar One and KaXu Solar One projects, which use mirrors to refl ect and concen-trate rays of sunlight to heat steam that can power turbines, will help diversify South Africa’s energy generation away from coal- fi red power.

We are working to address the environmental challenge posed by expanding cities. Buildings account for 15 percent of global greenhouse emis-sions�—� a number that is expected to climb in coming decades as more people in developing countries migrate to cities in search of work.

We see a signifi cant opportunity to make a diff erence by helping construction companies adopt more aff ordable, energy- effi cient designs. Through

our Excellence in Design for Greater Effi ciencies�—� or EDGE�—� tool, we have established an international green- building standard that is helping our clients save money while reducing emissions.

In FY13, we made our fi rst investments through fi nancial intermediaries in new green buildings�—� including mortgages for energy- effi cient homes in India. Along with the World Bank, we have also advised Russian policymakers on ground-breaking legislation that will enable millions of homeowners to obtain new fi nancing for energy- effi ciency improvements.

Above: IFC is support-ing the construction of South Africa’s fi rst con centrated- solar-power plants, which will use mirrors to refl ect and concen-trate sunlight to heat steam that can power turbines.

Above top: The Real Solare housing development in Mexico was one of IFC’s fi rst projects to receive EDGE certifi cation by achieving a 20 percent reduction in energy, water, and materials.

Above bottom: IFC’s investment in the South African solar-power plants will help diversify energy generation away from coal-fi red plants.

$10.5billion has been channeled to climate- related investments since 2005.


Constance Adae’s small shop burned to the ground in Accra. Seeing her business wiped out overnight, she feared the worst�—� not knowing how to recover her lost income or repay her loans.

Adae didn’t know it then, but she had insur-ance built into the loan that fi nanced her business.

Modest payouts arranged by IFC client MicroEnsure enabled Ghana’s Vanguard Assurance to send Adae a rapid settlement. She was able to reopen her shop�—� which sells plastic containers�—� after only a brief interruption.

Innovative solutions have the potential to narrow the access- to-fi nance gap in emerging markets, which is still large. More than 2 billion adults don’t have access to savings accounts or credit, and 200 million small and medium businesses lack access to credit.

Backed by fi nancing from us, MicroEnsure is now partnering with mobile operator Telenor to use its technology platforms as distribution channels to take fi nancial services to even more low- income individuals in Africa and Asia. Its client base is expected to reach 11 million people by 2017, up from 4 million today.

To establish and maintain inclusive fi nancial systems, IFC has built up a network of intermediaries�—� more than 900 fi nancial institu-tions operating in over 100 developing countries. It allows us to support far more micro, small, and medium enterprises than we would be able to on our own. It also enables us to reach sectors that are

Access to Finance

REACHING THE POOR THROUGH FINANCIAL INSTITUTIONSThrough more than 900 fi nancial institutions, IFC has increased access to fi nance for small and medium enterprises�—�and for millions of people.


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Above: Constance Adae’s small shop burned to the ground, but payouts arranged by IFC client MicroEnsure helped her reopen her business after only a brief interruption.

strategic priorities but often lack private sector capital�—� for example, women- owned businesses or underserved regions such as confl ict- aff ected states.

In 2012, our fi nancial- intermediary clients provided more than $265 billion in loans to micro, small, and medium enterprises.

In Haiti, we joined forces with the Microinsurance Catastrophe Risk Organisation, or MiCRO, in a $2 million project that is expected to provide aff ord-able insurance to help 70,000 women micro entrepreneurs protect their liveli-hoods against earthquakes, hurricanes, fl oods, and other natural disasters.

Beyond direct investments in fi nan-cial intermediaries, IFC has also played a catalytic role in expanding access to fi nan-cial services�—� by improving access to credit information, promoting best practices in risk management, and introducing environ-mental and social standards.

We helped Vietnam develop an online registration system that tracks which movable collateral�—� such as machinery or vehicles�—� has been pledged by borrowers to secure their loans. As a result, banks can better assess lending risks, allowing small enterprises without land to obtain loans more easily.

2billion adults don’t have access to savings accounts or credit.

200million small and medium businesses lack access to credit.


PARTNERING FORHow IFC Creates Opportunity

As the world’s largest development institution focused exclusively on the private sector, IFC plays a signifi cant role in infl uencing the course of private sector development.

Our leadership position enables us to help shape the policy agenda. We are helping the Group of 20 advanced and developing economies on a variety of important development matters�—� ranging from food security to access to fi nance for small enterprises. And a growing number of development fi nance institutions are adopting our approach to creating jobs, measuring results, and raising corporate- governance standards.


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INFLUENCE


Job Creation

THE SUREST PATHWAY OUT OF POVERTYOur investment clients directly supported 2.7 million jobs last year�—�and that was only a small part of our overall eff ect on employment.

Above: Once unemployed, Ramu Rawat got a job with IFC client OCL. Today, he supervises 200 workers at his own construction fi rm in one of India’s poorest states.


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Ramu Rawat used to spend his days idling around his village in Odisha, one of India’s poorest states. With no experience to off er, he couldn’t fi nd a job.

Then he noticed the IFC- fi nanced plant that local fi rm OCL India Ltd. had built in his area. Rawat

went to the gate and asked for a job. The company hired him to do some manual work. Recognizing his drive and atti-tude, it put him on his way�—� not just to a job, but to a career. Today Rawat has his own contracting company, supervising 200 workers.

Jobs are the surest path out of poverty. They also are the cornerstone of development�—�boosting living stan-dards, raising productivity, and fostering social cohesion.

Above right: Etileno XXI is Mexico’s fi rst major private sector petrochemicals project in more than 20 years. It is expected to create 3,000 jobs, directly and indirectly.

Yet 200 million people are unemployed today, most of them women and young people in developing countries. Without work, they can’t care for themselves or their families.

Addressing this challenge isn’t possible without the private sector, which accounts for 90 percent of the jobs in developing countries. IFC is playing a leading role in identi-fying ways to help the private sector strengthen employment.

We conducted a study�—� with the support of our donor partners�—� that found that a weak investment climate; inad-equate infrastructure; limited access to fi nance for micro, small, and medium enterprises; and insuffi cient training pose a particular threat to employment. Removing these obstacles would signifi cantly increase job creation. Encouraged by our fi ndings, nearly 30 leading international fi nance institutions pledged to work with us to address the job crisis.

In 2012, our investment clients directly supported 2.7 million jobs. Direct job creation, however, tends to be only a small fraction of our overall employment eff ects. Our study showed that indirect job eff ects�—� through the supply and distribution chains�—� can be large multiples of the direct eff ects.

We also supported fi nancial institutions that provided about $265 billion in loans to micro, small, and medium enter-prises�—� which in turn employed over 100 million people.

This year, we provided $285 million and mobilized an additional $350 million to support Etileno XXI, Mexico’s fi rst major private sector petrochemicals project in more than 20 years. It is expected to create 9,000 jobs during the construction phase and 3,000 direct and indirect jobs when operations start in 2015.

90%of the jobs in the developing world are generated by the private sector.


Six decades of confl ict and economic isolation have impoverished Myanmar�—� three quarters of its people go without elec-tricity, half its roads are impassable when it rains, and large numbers of children

are malnourished.The future, however, looks brighter. In 2011,

the country began a transition to a more democratic form of government and a market- oriented economic system. Those developments off er the potential for a major change: restoring one of the world’s poorest countries to its historic role as one of Asia’s most dynamic economies.

That is a complex undertaking�—� and it will take time. Despite Myanmar’s ample natural resources, the country faces signifi cant obstacles to development. To achieve its potential, it must strengthen economic governance, rebuild infrastruc-ture, modernize its legal and regulatory frameworks, and fi nd ways to bring prosperity to all its people.

Those are areas in which IFC and the World Bank can play a critical role, leveraging the distinctive capabilities of each institution. Working under a joint strategy, our institutions began this year by helping

World Bank Group

COLLABORATING TO REVITALIZE MYANMAR

Through joint initiatives, the World Bank and IFC are leveraging our comparative advantages and enhancing the impact of our work.

Myanmar clear its arrears to the World Bank’s International Development Association, or IDA.

The World Bank is providing $165 million in zero- interest loans to the country to help it address its most urgent needs. This is in addition to an $80 million grant for community- driven devel-opment that enables villagers to improve schools, clinics, roads, and the water supply.

At the same time, IFC is working to improve the investment climate and expand access to fi nance in Myanmar, in order to support the growth of the domestic private sector, attract world- class foreign investors, and stimulate job creation. We also are working with the Bank and the Multilateral Investment Guarantee Agency to promote the country’s essential infrastructure services, with an initial focus on the electricity and telecommunica-tions sectors.

IFC also began to invest in Myanmar for the fi rst time. We provided a $2 million loan to help our Cambodian client ACLEDA Bank set up a new microfi nance institution in the country. The new institution aims to provide loans to more than 200,000 people�—� most of them women entre-preneurs�—� by 2020.

In addition to the loan, IFC is strengthening the institution’s capacity to deliver microfi nance services, enhancing its risk management practices, and helping it to develop a responsible fi nance strategy.


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Nabil al Jabari and his family have run a small grocery store in downtown Cairo for the past six decades. It has a group of devoted customers, but al Jabari wanted to bring in new business.

So he installed an electronic payment system developed by IFC client Fawry, which allows al Jabari’s customers to make purchases with credit cards and to pay cell- phone bills.

That is crucial in a country where almost everyone relies on cash for transactions, a relatively ineffi cient way of doing business. The new system attracted dozens of new customers to his store, raising revenues by 15 percent, al Jabari says.

Small and medium enterprises, or SMEs, are a critical force for prosperity in developing countries, accounting for two- thirds of employment. IFC plays a prominent global role in expanding opportunities for these businesses�—� through our partnership with the Group of 20 leading economies and through our own investment and advisory initiatives.

That is why we invested $6 million in Fawry this year. Our fi nancing will help the fi rm expand its network of 20,000 payment terminals�—� potentially stimulating the growth of many small businesses across Egypt.

We serve as a technical adviser to the G-20 on a variety of initiatives to expand access to fi nance for SMEs. For

Small and Medium Enterprises

HELPING BUSINESSES THRIVE

example, IFC supports the G-20’s Global Partnership for Financial Inclusion and manages the SME Finance Innovation Fund announced by U.S. President Barack Obama in 2010. We also manage the Women’s Finance Hub, a G-20 initiative to share knowledge and best practices on ways to expand access to fi nance for women entrepreneurs.

We provide investment and advi-sory services to such enterprises in about 80 countries, focusing on every phase of their development: improving the investment climate, building management skills, and expanding access to fi nance and markets. In 2012, our clients provided 5.8 million loans to small and medium enterprises, totaling $241 billion.

In India, we advised the state of Bihar in implementing reforms to its tax regime to encourage formalization for small businesses. We also helped it strengthen an online fi ling and payment system. The changes increased tax reve-nues and allowed more small companies to enjoy the benefi ts of joining the formal economy.

In Sri Lanka, we worked with Nation Trust Bank to open the fi rst business- training center in the coun-try’s Eastern Province. Through our SME Toolkit, an online resource that provides training and management tools for small businesses, we are helping up to 30,000 small- business owners become more competitive and reach new markets.

Above: Egyptian entrepreneurs such as Nabil al Jabari are attracting new customers, thanks to an electronic payment system developed by IFC client Fawry.

Above right: Manoj Kumar, owner of a small watch-shop in the Indian state of Bihar, has benefi ted from tax-policy reforms that encour-age small businesses to join the formal economy.

IFC supports the development of small and medium enterprises by improving the investment climate, building managerial skills, and expanding access to fi nance.


Food Security

EXPANDING OPPORTUNITY FOR SMALL FARMERSWe help our clients raise agricultural productivity in developing countries and work to ensure food is available to people who need it most.


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More than 2 billion people�—� a third of mankind�—� depend on food produced by small farmers. Such farmers tend to be the norm in regions of

the world where hunger is greatest.Helping these farmers increase

their productivity and linking them to markets is an essential way to feed the nearly 1 billion people in the world who go hungry every day. It’s essential for managing food stocks at a time when global demand for higher- quality food is rising and when climate change poses risks that could hurt agricul-tural productivity.

Strengthening agribusiness is a priority for IFC�—� because it is essen-tial for food security and because it is essential for raising incomes for the poor, three- quarters of whom live in rural areas.

Our approach is comprehensive. We work with the private sector to increase the supply of aff ordable food and to ensure it is available to people who need it most. We also work with fi nancial institutions, commodity trading fi rms, companies, and civil society organizations to help large and small farmers overcome obstacles to higher productivity and become part of the agriculture supply chain.

Across East Asia and the Pacifi c, for example, IFC has worked with major coff ee buyers�—� such as Ecom Coff ee�—� to help farmers achieve the quality and sustainability certifi cations they need to sell coff ee in international markets. These certifi cations have helped thou-sands of farmers increase productivity and boost revenues.

IFC plays a prominent role in global initiatives to strengthen food security. We manage the private sector window of the Global Agriculture and Food Security Program (GAFSP), a multilateral fund set up to help the Group of 20 leading economies deliver on its food- security commitments. The private sector part of this fund enables IFC to reach even the smallest farmers and rural enterprises, by blending donor fi nancing with commercial credit.

This year, IFC and GAFSP’s private sector window jointly invested $10 million in Root Capital, a social investment fund, to help it expand access to working capital and markets for 300,000 small farmers over the next four years.

Weather, pests and crop disease, land degradation, and market failures can make farming a risky enterprise. Through our innovative Global Index Insurance Facility�—� which we launched with the World Bank and several donor partners�—� we helped about 119,000 small- scale farmers in seven countries in Sub- Saharan Africa and in Sri Lanka to insure their crops and livestock against risks of severe weather events such as fl oods and drought.

Above: Haitian farmer Hermilus Lovana has bene-fi ted from aff ordable insurance provided by IFC client Microinsurance Catastrophe Risk Organisation..

Left: A farmer in Vietnam harvests coff ee for Ecom, a global commodity trading company that uses inclusive business models, helping producers increase productivity and boost revenues.

3.1million farmers were supported by IFC clients in 2012.



PARTNERING FOR

We have a long history of setting a good example.

We were investing in “emerging markets” decades before they became a popular asset class for global investors. In fact, we coined the phrase. In the mid-1980s, we launched the world’s fi rst global investment fund to channel capital toward listed companies in developing countries. The new capital fl ows lifted many local businesses to international prominence, creating jobs that reduced poverty in countless cities and villages.

Today, we continue to demonstrate the rewards of investing in challenging markets.

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DEMONSTRATION


Infrastructure

PROMOTING PROSPERITY IN AFRICA

IFC delivers landmark projects with high impact on the poor�—�notably in frontier countries and regions, where our services are most needed.

Above: Expansion of the Azito Thermal Power Plant, in Côte d’Ivoire, will improve access to electricity for Ivoirians and help sustain the country’s economic growth.


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About 1.2 billion people�—� nearly a fi fth of humanity�—� live without electricity. An estimated 880 million people lack access to safe water, and more than 1 billion people don’t have access to either an all- weather

road or telephone services.Infrastructure shortages in the developing

world are a key constraint to economic growth. With more effi cient infrastructure, millions can benefi t from access to clean water and safe sani-tation. Companies can take their goods to market more quickly and cheaply. Countries with a modern infrastructure are better able to attract foreign investment.

Expanding and modernizing infrastructure are priorities for IFC�—� particularly in Africa, and particularly in the transport and power sectors. We invest in projects that can promote prosperity in some of the poorest countries, and help governments design and implement public- private partnerships.

In Sub- Saharan Africa�—� where the need for infrastructure improvement is most urgent�—� IFC is taking the lead to support the expansion of energy generation. In FY13, we invested more than $1 billion in infrastructure projects in the region, including funds mobilized from other investors. Our work included several innovative solar- power projects (see page 37).

In Côte d’Ivoire, which is emerging from years of political turmoil, we arranged a $345 million package to modernize the Azito Thermal Power Plant. Modernization will enable the plant to generate 50 percent more energy without using any additional gas. The plant will become one of the largest independent power generators in the region, helping ease power shortages and producing signif-icant savings for Ivoirians who now have to rely on expensive backup electricity systems.

We provided $125 million for our own account for the Azito project. Acting as lead arranger, we mobilized the balance from fi ve European devel-opment fi nance institutions and the West African Development Bank.

In areas of Sub- Saharan Africa that are not yet connected to the grid, we’re stepping up our Lighting Africa project with the World Bank and our donor partners. We are helping people switch from ineffi cient and expensive fuel- based lighting sources such as kerosene lamps to more aff ordable and climate- smart alternatives�—� such as solar lamps and dynamo- powered lights similar to those used on bicycles.

The program has already improved access to clean lighting for 6.9 million people in the African continent, avoiding the emission of over 138,000 tons of greenhouse gases�—� equivalent to taking 26,000 cars off the road. We are leading a similar initiative in Asia, aiming to provide off - grid lighting products to 2 million people in rural areas of India by 2015.

Above center: An Azito plant technician performs a check on gas pipes.

Above right: A young girl breaks into a smile on seeing her house well-lit after sunset. IFC’s Lighting Asia program in India is expected to bring lighting to 2 million people.

6.9million have improved access to clean light-ing because of the World Bank’s Lighting Africa project.


Foreign investments in the capital markets of developing countries have increased in recent years. But only a fraction of these investments go to the smallest and poorest countries. Eighty percent of total portfolio fl ows into developing countries go to just 14 of the largest emerging- market countries. Investors

continue to have little interest in smaller countries, where capital markets tend to be less liquid and more risky as a result.

IFC is playing an important role in addressing that imbalance. This year we committed $100 million to a $500 million global fund that brings together large, institutional investors to invest primarily in listed equity securities of private sector fi rms in these smaller markets�—� the so- called Next 50.

Mobilizing capital from other investors is a key component of IFC’s business model. Encouraging additional private sector investment to leverage our activities allows us to achieve more than we could on our own. It also enables us to pool knowledge and expertise.

In FY13, we worked with banks, international fi nancial institu-tions, sovereign funds, pension funds, and other partners to mobilize $6.5 billion for investment in developing countries. We did that through several programs�—� including our Syndicated Loan Program (see page 73)�—�and also through our subsidiary, IFC Asset Management Company, which has $5.5 billion in assets under management across six funds focused on specifi c sectors or regions.

In Sri Lanka, this approach allowed us to increase funding for small and medium enterprises�—� which are critical to rebuilding the economy after decades of confl ict. We provided a $75 million long- term loan to Commercial Bank of Ceylon, the country’s largest private sector bank.

The investment was made through IFC Capitalization Fund�—� a $3 billion global equity and subordinated debt fund established in

Mobilization

OPENING NEW MARKETS FOR PRIVATE INVESTMENT

By bringing together other investors, we combine knowledge and expertise�—�and maximize the development impact of our projects.

2009 by IFC and Japan Bank for International Cooperation. The fund is managed by IFC Asset Management Company.

The investment is expected to increase access to fi nance for up to 16,000 small businesses and generate about 170,000 jobs�—� both directly and indirectly�—� by 2017.

In Bangladesh, we led a consortium of investors to provide about $345 million in fi nancing�—� including $190 million from our own account�—� to telecommunications operator Grameenphone. The investment will help the company extend mobile services to remote areas of the country.

IFC also mobilizes capital through syndicated loans, which allows other investors to participate in the loans we make. In FY13, syndicated loans totaled $3.1 billion, accounting for nearly half of the funds we mobilized.

Above: An employee at a small business supported by Sri Lanka’s Commercial Bank of Ceylon, which received a $75 million loan from IFC and IFC Asset Management Company.

$3.1billion in syndicated loans were issued in FY13, accounting for nearly half of the funds we mobilized.


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For all their economic achievements in recent years, the needs of developing countries remain vast.

Sub- Saharan Africa alone will need investments of over $90 billion per year over

the next decade to meet infrastructure demands such as roads, rail networks, power, and water and sanitation projects. The Middle East and North Africa will need up to $100 billion a year to boost economic competitiveness and sustain recent eco-nomic growth rates.

These needs represent signifi cant opportu-nities for private enterprises from other developing countries�—� which have shown a robust appetite to expand into untapped emerging markets. Developing countries now account for more than a third of foreign direct investment in emerging markets.

Leveraging our global reach, IFC has been an important facilitator of South- South investment�—� which we see as an important way to stimulate regional integration, job creation, and economic development. In FY13, our investments in such projects climbed to nearly $1.7 billion, accounting for nearly 10 percent of IFC commitments for our own account.

By supporting such projects, we help stimu-late the transfer of knowledge and technology from one developing country to another, and expand the availability of previously hard- to-obtain goods

South- South Investment

A VITAL FORCE FOR DEVELOPMENT

Our projects encourage the transfer of technology from one country to another�—� boosting regional integration and job creation.

and services. We also enable regional companies to develop into transnational corporations that can compete on a global level.

We also mobilize funds from other investors to promote South- South investment. In FY13, our syndications program contributed signifi cantly in this area. Emerging- market fi nancial institutions increased their participation in our loan syndi-cations�—� doubling their commitments from the previous year and accounting for 29 percent of the $3.1 billion in IFC syndicated loans for the year.

This year, IFC and two funds managed by IFC Asset Management Company bought a $204 million equity stake in Morocco’s Banque Centrale Populaire to help the bank expand across sub- Saharan Africa�—� where access to fi nance, especially for smaller fi rms, remains a challenge.

We also invested $11 million in a subsidiary of India’s Apollo Tyres to help the company expand production at one of its tire factories in South Africa. The company makes tires for cars, buses, and trucks. Our fi nancing will help Apollo Tyres produce about 13,000 tires a day at its factory in the city of Ladysmith�—� an increase of about a third.

Above: A worker at a factory in South Africa operated by a subsidiary of India’s Apollo Tyres. IFC’s investment will help increase production by a third.


Strong local capital markets are the founda-tion for a prosperous private sector. They reduce countries’ dependence on foreign debt, protecting economies from sudden swings in international capital fl ows.

Such markets create access to long- term local- currency fi nance and help mobilize funds to fi nance infrastructure and other areas essential for the growth of the private sector�—� the key engine of job creation in developing countries.

IFC is a global advocate for effi cient local capital markets, and we play an important role in their development in emerging countries. We often are the fi rst international issuer of local- currency bonds in these countries. In issuing bonds, we work closely with regulators and investors to help improve the regulatory framework, encourage greater partic-ipation in the local markets, and provide a model for other international issuers.

Local Capital Markets

AN EFFECTIVE WAY TO SPUR GROWTH

As the fi rst international issuer of local-currency bonds in many countries, IFC often provides a model for other issuers.


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Over the years, IFC has issued bonds in 12 local currencies�—� including the Brazilian real, the Russian ruble, the Nigerian naira, the Malaysian ringgit, and the Chinese renminbi. We have provided over $10 billion in local-currency fi nancing across 58 currencies�—� more than any other international fi nance institution.

In Nigeria this year, we were the fi rst foreign institution to issue a naira- denominated bond, raising the equivalent of $75 million that will be used to support IFC’s development program in the country. All investors were Nigerian pension funds, asset managers, and banks looking to diver-sify their portfolios. We worked with the Nigerian government and regulators to help them develop a framework that encourages more corporate issuances in the local markets. In addition, we issued the fi rst infl ation- indexed bond by a foreign issuer in Russia.

In China, we have made a total of six local- currency investments so far to expand access to fi nance, promote food safety, and help increase the availability of high- quality and aff ordable drugs. Those investments refl ected an earlier achieve-ment�—� our 2011 agreement with Chinese banks to swap U.S. dollars into Chinese renminbi to provide local-currency loans. We were the fi rst multilateral institution to sign such an agreement.

Smaller enterprises often face the greatest diffi culty in obtaining local- currency fi nancing, a challenge IFC is helping them overcome. In the Dominican Republic this year, we issued the fi rst local- currency bond by an international fi nance institution, raising $10 million that we invested in two microfi nance institutions�—� Fondesa, which tends to make small loans of less than $1,000; and La Nacional, which fi nances low- income mortgages with an average home value of about $30,000.

$10billion in local-currency fi nancing has been provided by IFC.


IFC plays a leading role in development�—� by leveraging the power of the private sector to create opportunity in emerging countries, in ways that promote prosperity for all.

We achieve development impact by venturing where other investors often hesitate to go: in the poorest countries and regions of the world, and in places torn by confl ict and instability. We achieve it by helping our clients fi nd ways to create opportunity across the entire supply chain. We achieve it by rigorously tracking our results against the goals we set for ourselves.


PARTNERING FOR

56 _ IFC ANNUAL REPORT 2013IM

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IMPACT


Confl ict- Aff ected Areas

GENERATING CONDITIONS FOR SUSTAINABLE GROWTH

Broadband Internet is a revolutionary technology�—� capable of empowering indi-viduals, unlocking business opportunities, and boosting economies. In war- torn Afghanistan, however, it’s a technology

beyond the reach of virtually the entire population.IFC is working to change that by helping the

country’s largest mobile- phone operator extend high- speed broadband services to 80 percent of the population in key cities. The $65 million in long- term fi nancing we provided this year to the company, Roshan, will help it acquire a 3G license and strengthen its broadband network.

That will also help Roshan expand the array of innovative services it off ers to improve the lives of ordinary Afghans. One of them is M- Paisa, a mobile- banking service that gives people without bank accounts a quick, safe, and secure way to send and receive money�—� through their phones. Another

Our projects in fragile and confl ict-aff ected areas aim to create jobs and help governments rebuild infrastructure.


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is Roshan’s Telemedicine project, which helps bring better healthcare services to isolated areas of the country.

Confl ict and instability are a leading cause of poverty across the world. Recognizing that most of the world’s poor will live in fragile and confl ict- aff ected areas in coming decades, we are intensifying our focus on creating opportunity in these areas.

In FY13, we invested about $580 million in fragile and confl ict- aff ected areas. Our advisory expenditures in these areas totaled approximately $40 million, or 18 percent of our advisory program.

Our goal is to create jobs, remove constraints to sustainable business growth, and help govern-ments rebuild infrastructure. To do so, we aim to expand the availability of power and credit. We are also helping strengthen the business environment for local enterprises while enabling them to reach new markets.

Our work in fragile and confl ict- aff ected countries often begins with advisory work to lay the foundation for investment. Working with the World Bank and our donor partners, we supported the adoption of over 60 investment- climate reforms in 22 confl ict- aff ected states between 2010 and 2012. More than 40 of these reforms were in Africa.

In Burundi, for example, we helped the country implement reforms that doubled the number of businesses registered�—� to nearly 1,350 in 2012 from 674 in 2010. As the country’s business climate has improved, foreign investment has grown.

Trade fi nance can also make a critical diff er-ence for confl ict- aff ected states, which tend to be locked out of international trade. Since FY10, IFC has supported trade in 24 of these countries, enabling more than $510 million in trade amid chal-lenging conditions.

Above top: IFC is helping Roshan, Afghanistan’s larg-est mobile-phone operator, to expand its network, bringing cellular and Internet services to many people long left off the grid.

Above bottom: A street vendor serves food in Yangon, Myanmar.

$577million was invested in confl ict-aff ected areas during FY13.


Women’s participation in the work-force has grown over the past decades. Yet women remain signifi -cantly under represented.

This inequality is not only unfair. It’s also bad economics. Failing to tap the economic potential of women puts a brake on poverty reduction and limits growth and opportu-nity. Expanding women’s participation can raise productivity and improve a variety of develop-ment outcomes.

IFC works to strengthen women’s roles as leaders, entrepreneurs, employees, consumers, and stakeholders. We provide a combination of invest-ment and advice to help our clients expand access to fi nance for women, deliver business- skills training for women entrepreneurs, and recognize the busi-ness case for creating opportunities for women. We also work with our clients to improve working conditions and to dismantle barriers to women’s participation in business.

This year, we teamed up with The Coca- Cola Company in a $100 million, three- year project to provide access to fi nance for thousands of women entrepreneurs in Africa and other emerging markets. IFC will work through its network of local and regional banking institutions to provide fi nancing

Gender

BOOSTING DEVELOPMENT THROUGH EQUALITYAddressing obstacles to women’s empowerment is an important way to promote shared prosperity and poverty reduction.

and business-skills training to small and medium enterprises that are owned or operated by women across the Coca- Cola value chain. The fi rst step was a $50 million IFC invest-ment in Access Bank Nigeria to help it increase lending to women entrepreneurs.

We also arranged and syndicated a $130 million fi nancing package to support the expansion of Peru’s Belcorp, a door- to-door sales cosmetics company that employs close to 9,000 people�—� 74 percent of them women. The investment will also help the building of a new plant in Mexico and the fi rm’s expansion to new markets in Latin America.

In China, we stepped up our fi nancing to support the growth of Chindex, a leading private healthcare network that has been instrumental in raising the quality of local health services. Founded by two women, the company is dedi-cated to empowering its female staff through leadership and training initiatives. Women make up 75 percent of Chindex’s workforce.

Since 2010, our Banking on Women program has invested more than $600 million in support of women- owned small enter-prises in developing countries. That included a $470 million investment in Brazil’s Banco Itau�—� the program’s largest investment, and its fi rst in Latin America. We provided $100 million from our own account and mobilized $370 million through loan syndications.

IFC also is a lead sponsor of the Global Banking Alliance for Women, an initiative that brings together about 30 fi nancial institutions committed to leveraging the women’s market around the world.

Above: Beatriz Cortez, a beauty consultant affi liated with IFC client Belcorp in Peru, enjoys a light moment with her daughter. Belcorp’s expansion is expected to create signifi cant jobs and entrepreneurial oppor-tunities for women.


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More than two- thirds of the world’s poorest people�—� who survive on less than $1.25 a day�—� live in middle- income coun-tries. These countries also are home to large numbers of people without access

to clean water, reliable power, or decent health and education services.

IFC focuses on the needs of the poor, regardless of their location. Our approach is to help middle- income countries fi nd creative ways to ensure that their rising prosperity is shared by all citizens. We also work to strengthen rural development and address the challenges of unemployment, urbaniza-tion, and climate change.

Supporting companies that adopt inclusive business models is an important element of our work. Over the past nine years, we have invested more than $9 billion in businesses that provide goods, services, and jobs to people at the base of the economic pyramid�—� by integrating the working poor into their supply chains. We have worked with more than 350 inclusive- business clients in more than 80 countries.

This year, we provided a $15.6 million loan to fi nance the construction or renovation of 47 preschool facilities in Chuvashia Republic, a predominantly rural province in Russia. The project will open up spaces for more than 7,000 students and create jobs for teachers�—� many of whom will be women.

In Turkey, we provided fi nancing and advice to help introduce a technology that will enable one of the country’s largest paper companies to expand production without increasing the consumption of water�—� a key input for the paper industry. Our $8 million loan to cardboard maker Modern Karton will help it build a wastewater- recovery system to conserve and reuse water.

Thriving private enterprises in middle- income countries can set an important example for others�—� not only by venturing into less- developed areas of their own country but also by stepping out into poorer countries. IFC helps make that happen.

This year, we invested $6 million in an Istanbul- based education fi rm, Plato, to help it expand vocational training in Turkey and several Middle Eastern and Central Asian countries. The investment was our fi rst under our E4E Initiative for Arab Youth, which aims to strengthen job skills in a region where youth unemployment is high. Plato is expected to strengthen employment opportunities for up to 6,000 students.

Middle- Income Countries

PROMOTING PROSPERITY FOR ALL

Our work in middle-income countries helps them tackle challenges such as urbanization, rural development, and climate change.

Above: Students learn at a Plato training center in Istanbul. IFC’s investment in the education fi rm will help it expand vocational training in Turkey and other Middle Eastern and Central Asian countries.


IDA Countries

CREATING OPPORTUNITY FOR THE POOREST

We focus on improving lives in the world’s most challenging areas. In FY13, nearly half of our projects were in the poorest countries.

Above: IFC’s investment in Kenya Tea Development Agency is fi nancing a new warehouse that is expected to raise farmers’ incomes, create jobs, and provide stability in a sector that benefi ts over 4 million Kenyans.


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In the poorest countries, the need to improve lives is urgent. Unable to attract investment, many of these countries have no option but to rely on offi cial aid�—� which often is not suffi cient.These are the 82 countries eligible to borrow

from the International Development Association, or IDA�—� the World Bank’s fund for the poorest. For IFC, they represent an opportunity to make a critical diff erence where we are needed most.

Our investments in IDA countries have grown nearly tenfold over the past decade, totaling $6.6 billion in FY13 alone. Of this amount, a record $1.2 billion was mobilized through loan syndications. IDA countries accounted for about half of all IFC investment projects and over 60 percent of advisory projects in recent years. In addition, we’ve contrib-uted more than $2.5 billion to IDA’s general fund since 2007�—� including $340 million in FY13.

Through our Global Trade Finance Program, we have provided more than $13 billion in guar-antees to businesses in IDA countries since 2005�—� $3.3 billion in FY13 alone. This enabled small and medium enterprises to obtain much- needed fi nance to expand and join the global trading system.

We aim to invest wherever we can do the most good. In Kenya�—� where tea exports generate more than $1 billion a year in earnings, benefi ting 10 percent of the population�—� we helped the country’s largest producer of black tea, the Kenya Tea Development Agency. Our $12 million investment fi nanced a 200,000-square- foot facility that is expected to raise farmers’ income and provide stability in a sector that accounts for two- thirds of the region’s jobs.

We are helping Lao People’s Democratic Republic develop its hydropower sector as a way to promote economic growth and alleviate poverty. We are supporting the revision of the country’s water law after launching a program to increase the share of new hydro projects that follow high social and environmental standards.

In small IDA countries where the local banking systems tend to be underdeveloped, IFC works with local fi nancial institutions to strengthen their capabilities and help them grow.

Our work with Bai Tushum and Partners, in the Kyrgyz Republic, has enabled it to develop into the country’s fi rst microfi nance bank, serving more than 25,000 customers.

In landlocked Bhutan, we invested $28 million this year in Bhutan National Bank�—� the coun-try’s largest- ever foreign direct investment�—� to strengthen its capacity to serve micro, small, and medium enterprises and help it adopt international best practices in banking and corporate governance.

Above top: In the Kyrgyz Republic, a loan from IFC client Bai Tushum enabled Adalat Murzuraimova to buy cattle and lease land. She has used her farm income to educate her daughter.

Above bottom: Kenya Tea Development Agency obtains its tea from small-scale farmers such as this couple.

$13billion has been com-mitted to IDA countries through IFC’s Global Trade Finance Program since 2005.


Measuring up


OUR STRATEGIC FOCUS AREAS

IFC strives to deliver what cannot be obtained elsewhere. We off er clients a unique combination of investment and advice designed to promote sustainable private sector development in emerging markets. We call that special edge our “additionality.” Using it to maximize our development impact is a cornerstone of our strategy. Our activities are guided by fi ve strategic priorities that allow us to help where we are most needed, and where our assistance can do the most good.

STRENGTHENING THE FOCUS ON FRONTIER

MARKETS

IDA countries, fragile and confl ict situations, and frontier regions of middle-

income countries

ADDRESSING CLIMATE CHANGE AND ENSURING ENVIRONMENTAL AND

SOCIAL SUSTAINABILITY

Developing new business models and fi nancing instruments, and

setting and raising standards

ADDRESSING CONSTRAINTS TO PRIVATE SECTOR GROWTH

IN INFRASTRUCTURE, HEALTH, EDUCATION, AND THE FOOD SUPPLY CHAIN

Increasing access to basic services and strengthening the

agribusiness value chain

DEVELOPING LOCAL FINANCIAL MARKETS

Building institutions, mobilizing resources, and introducing

innovative fi nancial products

BUILDING LONG- TERM CLIENT RELATIONSHIPS IN

EMERGING MARKETS

Using the full range of our products and services to guide clients’ development and assist

cross- border growth

STRATEGIC AREASOF FOCUS


SCORECARD

IFC’s Performance on Strategic Focus Areas

Indicator Performance

FY13 FY12

DEVELOPMENT RESULTS

Investment Companies Rated High (DOTS Score)1 66% 68%

Advisory Projects Rated High2 76% 72%

Focus Areas

FRONTIER MARKETS

IDA: Number of Investment Projects 288 283

IDA: Commitments (millions) $6,649 $5,864

IDA: Share of Advisory Services Program in IDA Countries, %3 65% 65%

Frontier Regions: Number of Investment Projects 59 42

Fragile and Confl ict Situations: Number of Investment Projects 44 45

Fragile and Confl ict Situations: Share of Advisory Services Program, % 18% 18%

Commitments in Sub-Saharan Africa (millions) $3,501 $2,733

Commitments in Middle East and North Africa (millions) $2,038 $2,210

LONG-TERM CLIENT RELATIONSHIPS INCLUDING SOUTH-SOUTH

Number of South-South Investment Projects 47 41

Commitments in South-South Investment Projects (millions) $1,674 $1,515

CLIMATE CHANGE, ENVIRONMENTAL AND SOCIAL SUSTAINABILITY

Climate-related investments (millions)4 $2,509 $1,621

INFRASTRUCTURE, HEALTH AND EDUCATION, FOOD SUPPLY CHAIN

Commitments in Infrastructure, Health and Education, and Agribusiness and Food Supply Chain (millions)5 $6,934 $6,034

LOCAL FINANCIAL MARKETS

Commitments in Financial Markets (millions)6 $10,124 $9,375

Commitments in Micro, Small and Medium Enterprises (millions)7 $7,192 $6,077

Notes:

1. DOTS scores: percentage of client companies with high development outcome ratings as of June 30 of the respective year, based on projects approved over a rolling six-year

period (FY13 ratings are based on approvals from 2004–2009).

2. For Advisory Services, development effectiveness ratings are for calendar years 2012 and 2011.

3. FY12 and FY13 fi gures refl ect improved methodology for measuring Advisory Services expenditures in IDA countries, incorporating regional projects.

4. “Climate-related” is an attribute of a project involving Climate Mitigation, Climate Adaptation and/or Special Climate activities. For more details on these terms and activities,

please visit www.ifc.org/ghgaccounting.

5. Commitments in Infrastructure (excluding Oil, Gas and Mining), Communications & Information Technologies, Subnational Finance, Health & Education, and Agribusiness & Food

Supply Chain.

6. Commitments of IFC’s Financial Markets excluding Investment Funds and Private Equity.

7. Includes direct MSME borrowers, fi nancial institutions with more than 50% of their business clients being MSMEs, and any other investments that specifi cally target MSMEs as

primary benefi ciaries.


CREATING OPPORTUNITY WHERE IT’S NEEDED MOST

IFC and our clients make a wide range of contributions in developing countries. Our clients’ success can have ripple eff ects across an economy, giving many people�—� including the poor�—� a chance to improve their lives.

31.1 MillionCUSTOMERS SUPPLIED

WITH GAS

6.14 Million20-FOOT SHIPPING CONTAINERS

TRANSPORTED (EQUIVALENT)

903,000STUDENTS EDUCATED

684,000MICRO, SMALL, AND MEDIUM

ENTERPRISES REACHED

$12 BillionIN GOODS AND SERVICES PURCHASED

FROM DOMESTIC SUPPLIERS

$83 BillionIN MSME LOANS MADE

$420 MillionIN FINANCING SECURED

WITH MOVABLE PROPERTY FOR 38,000 FIRMS

1.7 MillionPEOPLE EXPECTED TO

RECEIVE IMPROVED ACCESS TO INFRASTRUCTURE SERVICES AND $390 MILLION MOBILIZED

THROUGH PUBLIC-PRIVATE PARTNERSHIPS

$400 MillionIN NEW INVESTMENTS DUE TO INDUSTRY REFORM AND

INVESTMENT-PROMOTION WORK WITH GOVERNMENTS

LATIN AMERICA AND THE CARIBBEAN

EUROPE ANDCENTRAL ASIA

EAST ASIA ANDTHE PACIFIC


244,000JOBS PROVIDED

120 MillionPHONE CONNECTIONS

11.1 MillionCUSTOMERS SUPPLIED WITH POWER

(GENERATION + DISTRIBUTION)

3.6 MillionPATIENTS CARED FOR

620,000FARMERS REACHED

$180 MillionIN NEW FINANCING FOR FIRMS WITH IMPROVED CORPORATE

GOVERNANCE PRACTICES

$310 MillionIN NEW INVESTMENTS DUE TO INDUSTRY REFORM AND

INVESTMENT-PROMOTION WORK WITH GOVERNMENTS

$4 BillionIN FINANCING SECURED

WITH MOVABLE PROPERTY FOR 3,600 FIRMS

3 MillionPEOPLE RECEIVED

OFF-GRID LIGHTING

SUB-SAHARAN AFRICASOUTH ASIAMIDDLE EAST AND

NORTH AFRICA


Our Businessand ExpertiseOur experience — in every region of the world, and in nearly every industry — allows us to provide a unique set of advantages to our clients.


WHERE WE WORK

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries. We are able to apply lessons learned in one region to solve problems in another. We help local companies make better use of their own knowledge, by matching it to opportunities in other developing countries.

OUR OFFICES


IFC INVESTMENT SERVICES

Our investment services provide a broad suite of fi nancial products and services that can ease poverty and spur long- term growth by promoting sustainable enterprises, encouraging entrepreneurship, and mobilizing resources that wouldn’t otherwise be available.

Our fi nancing products are designed to meet the needs of each project. We provide growth capital, but the bulk of the funding comes from private sector owners, who also bear leadership and manage-ment responsibility.

In FY13, we invested about $18.3 billion in 612 projects, of which $6.6 billion went to projects in IDA countries. In addition, we mobilized $6.5 billion to support the private sector in developing countries. We now have a $50 billion portfolio of investment commitments span-ning nearly 2,000 companies in 126 countries.

OUR THREE BUSINESSES

IFC’s three businesses�—� Investment Services, Advisory Services, and Asset Management�—� are mutually reinforcing, delivering global expertise to clients in developing countries.

They give us a special advantage in helping the private sector create opportunity�—� our investment and advice can be tailored to a client’s specifi c needs, and in ways that add value. Our ability to attract other investors brings additional benefi ts, introducing our clients to new sources of capital and better ways of doing business sustainably.

PRODUCT LINES

LOANS

IFC fi nances projects and compa-nies through loans from our own account, typically for seven to 12 years. We also make loans to inter-mediary banks, leasing companies, and other fi nancial institutions for on- lending.

While IFC loans traditionally have been denominated in the cur-rencies of major industrial nations, we have made it a priority to struc-ture local- currency products. IFC has provided local- currency fi nanc-ing in more than 50 local currencies.

In FY13, we made commitments for nearly $8.5 billion in new loans, bringing our total committed loan portfolio to around $31.5 billion.

EQUITY

Equity investments provide devel-opmental support and long- term growth capital that private enter-prises need. We invest directly in companies’ equity, and also through private- equity funds. In FY13, equity investments accounted for nearly $2.7 billion of commitments we made for our own account.

This brought our own- account equity portfolio to $12 billion, on a cash basis, in 819 companies in 118 countries.

IFC generally invests between 5 and 20 percent of a company’s equity. We often encourage the com-panies we invest in to broaden share ownership through public listings, thereby deepening local capital markets. We also invest through profi t- participating loans, convert-ible loans, and preferred shares.


TRADE FINANCE

The IFC Global Trade Finance Program guarantees trade- related payment obligations of approved fi nancial institutions. The program extends and complements the capacity of banks to deliver trade fi nance by providing risk mitigation on a per- transaction basis for more than 200 banks across more than 80 countries.

In FY13, trade fi nance accounted for nearly $6.5 billion of the com-mitments we made for IFC’s own account. Our Global Trade Liquidity Program has supported $24.4 billion in trade in developing countries since it was launched in 2009.

SYNDICATIONS

IFC’s Syndicated Loan Program, the oldest and largest syndicated lending program among multilateral devel-opment banks, is an important tool for mobilizing capital to serve devel-opment needs. In FY13, it accounted for nearly half the funds mobilized by IFC.

In FY13, IFC syndicated about $3.1 billion in B- loans and parallel loans, provided by more than 60 co- fi nanciers�—� including commer-cial banks, funds, and development fi nance institutions. This resulted in a $13.6 billion syndicated loan portfolio.

Borrowers in the infrastructure sector received 51 percent of our total syndications volume. More than a third of fi nancing we pro-vided through syndications�—� a record $1.2 billion�—� went to bor-rowers in IDA countries. We also achieved our highest- ever volume for borrowers in sub- Saharan Africa�—� $868 million.

STRUCTURED FINANCE

IFC uses structured and securitized products to provide cost- eff ective forms of fi nancing that would not otherwise be readily available to clients. Products include partial credit guarantees, structured liquid-ity facilities, portfolio risk transfer, securitizations, and Islamic fi nance. We use our expertise in structur-ing�—� along with our international triple- A credit rating�—� to help clients diversify funding, extend maturities, and obtain fi nancing in their cur-rency of choice.

CLIENT RISK- MANAGEMENT SERVICES

IFC provides derivative products to our clients to allow them to hedge their interest rate, currency, or commodity- price exposures. IFC mediates between clients in develop-ing countries and derivatives market makers in order to provide clients with full market access to risk- management products.

BLENDED FINANCE

IFC sometimes combines conces-sional funds�—� typically from donor partners�—� with our own resources to fi nance initiatives and achieve development impact that would otherwise be unattainable. We have applied this approach in three areas of strategic priority: climate change, agribusiness and food security, and fi nance for small and medium enter-prises. In FY13, we committed more than $155 million of donor funds, catalyzing more than $2.5 billion of IFC and private sector fi nancing.

In FY13, IFC invested about

$18.3billion in 612 projects, of which $6.6 billion went to projects in IDA countries.

During FY13, IFC made commitments for nearly

$8.5billion in new loans.


BUSINESS LINES

ACCESS TO FINANCE

IFC helps increase the availability and aff ordability of fi nancial ser-vices for individuals and for micro, small, and medium enterprises. We help our fi nancial clients provide broad- based fi nancial services and build the fi nancial infrastructure necessary for sustainable growth and employment. At the end of FY13, we had an active portfolio of 263 projects�—� valued at $342.6 million�—� that promoted access to fi nance in 72 countries. In FY13, our advisory program expenditures reached about $62.6 million, of which 61 percent was in IDA countries, and 13 percent was in fragile and confl ict- aff ected areas.

INVESTMENT CLIMATE

IFC helps governments implement reforms that improve the business environment and encourage and retain investment, thereby fostering competitive markets, growth, and job creation. We also help resolve legal and policy weaknesses that inhibit investment. At the end of FY13, IFC had an active portfolio of 143 investment- climate projects in 65 countries, valued at $288.9 mil-lion. In FY13, our advisory program expenditures in these projects totaled $74.8 million, of which 76 percent was in IDA countries, and 29 percent was in fragile and confl ict- aff ected areas.

PUBLIC- PRIVATE PARTNERSHIPS

IFC provides support for govern-ments to design and implement public- private partnerships in infra-structure and other basic public services. Our advice helps maximize the potential of the private sector to increase access to public services such as electricity, water, health, and education while enhancing their quality and effi ciency. At the end of FY13, we had an active portfolio of 103 PPP projects in 53 countries, val-ued at about $126 million. In FY13, our advisory program expenditures in the area reached $39.5 million.

SUSTAINABLE BUSINESS

IFC works with clients to promote sound environmental, social, gov-ernance, and industry standards; catalyze investment in clean energy and resource effi ciency; and sup-port sustainable supply chains and community investment. We work in several sectors including agribusi-ness and forestry; manufacturing and services; infrastructure; oil, gas, and mining; and fi nancial mar-kets. At the end of FY13, we had an active portfolio of 157 sustainable- business projects in 58 countries, valued at $279.7 million. In FY13, our advisory program expendi-tures related to this area totaled $55 million.

IFC ADVISORY SERVICES

Private sector development requires more than fi nance. Experience shows the powerful role advisory services can play in strengthening the development impact of IFC’s investments, unlocking investment by the private sector, and helping businesses expand and create jobs (see page 84).

Companies need more than fi nancial investment to thrive. They need a regulatory environment that enables entrepreneurship. They need advice on best business practices. Our work includes advising national and local governments on how to improve their investment climate and strengthen basic infrastruc-ture. We help companies improve corporate governance, strengthen risk management, and become more sustainable�—� fi nancially, environ-mentally, and socially.

We operate in 105 countries, with more than 660 active proj-ects. Funding comes from donor partners, IFC, and clients. In FY13, advisory services program expendi-tures totaled $232 million, up from $197 million in FY12. In all, 65 per-cent of our program was in IDA countries, and 18 percent in fragile and confl ict- aff ected areas.

We provide advice in

105countries, with more than 660 active projects.

In FY13, our total advisory program expenditures reached more than

$232million, of which 65 percent was in IDA countries and 18 percent in confl ict-aff ected areas.


IFC ASSET MANAGEMENT COMPANY

IFC Asset Management Company LLC, a wholly owned subsidiary of IFC, mobilizes and manages funds for investment in devel-oping and frontier markets. It was created in 2009 to provide investors with access to IFC’s emerging-markets investment pipe-line and to expand the supply of long- term capital to these markets, enhancing IFC’s development goals and generating profi ts for investors by leveraging IFC’s global reach, standards, investment approach, and track record.

As of June 30, 2013, AMC had approx-imately $5.5 billion in assets under management. It manages six investment funds on behalf of a wide variety of institu-tional investors, including sovereign wealth funds, pension funds, and development fi nance institutions.

AMC FUNDS

IFC CAPITALIZATION FUND

The $3 billion IFC Capitalization Fund consists of an equity fund of $1.3 billion and a subordinated debt fund of $1.7 bil-lion. Launched in 2009, the fund helps strengthen systemically important banks in emerging markets, bolstering their abil-ity to cope with fi nancial and economic downturns. The fund is jointly supported by a $2 billion capital commitment from the Japan Bank for International Cooperation and a $1 billion investment from IFC. From its inception through the end of FY13, the fund made 29 investment commitments totaling nearly $2.1 billion.

IFC AFRICAN, LATIN AMERICAN, AND CARIBBEAN FUND

The $1 billion IFC African, Latin American, and Caribbean Fund was launched in 2010 and has commitments from IFC, the Abu Dhabi Investment Authority, the Dutch pension fund manager PGGM, Korea Investment Corporation, State Oil Fund of the Republic of Azerbaijan, a Saudi government fund, and an international pension fund. The fund co- invests with IFC in equity and equity- related investments across a range of sectors in sub- Saharan Africa, Latin America, and the Caribbean. From its inception through the end of FY13, the fund made 19 investment commitments totaling $609.9 million.

THE AFRICA CAPITALIZATION FUND

The $182 million Africa Capitalization Fund was launched in 2010 to invest in sys-temically important commercial banking institutions in Africa. Among its investors are the Abu Dhabi Fund for Development, African Development Bank, CDC Group, European Investment Bank, OPEC Fund

for International Development, and Sumitomo Mitsui Banking Corporation. Since its start through the end of FY13, the fund made six investment commitments totaling $101.8 million.

IFC RUSSIAN BANK CAPITALIZATION FUND

The $550 million IFC Russian Bank Capitalization Fund was launched in 2012 to invest in commercial banking institu-tions in Russia. The fund, which had its fi nal close in June 2013, has commitments from IFC, the Russian Ministry of Finance, and Russia’s Vnesheconombank, or VEB. As of the end of FY13, the fund made two investment commitments totaling $78.2 million.

IFC CATALYST FUND

The IFC Catalyst Fund invests in funds that provide growth capital to companies devel-oping innovative ways to address climate change in emerging markets. It also invests directly in those companies. As of FY13, the investors in the fund include IFC, the United Kingdom’s Department of Energy and Climate Change, the U.K. Department for International Development, the State Oil Fund of the Republic of Azerbaijan, and the Government of Canada.

IFC GLOBAL INFRASTRUCTURE FUND

The IFC Global Infrastructure Fund co- invests with IFC in equity and equity- related investments in the infrastructure sector in emerging markets. As of FY13, the fund’s investors include IFC, the State Oil Fund of the Republic of Azerbaijan, the Transport for London Pension Fund, and an Asian sovereign wealth fund.


OUR INDUSTRY EXPERTISE

AGRIBUSINESS AND FORESTRY

Agribusiness has an important role to play in poverty reduction. The agricultural sector often accounts for at least half of GDP and employ-ment in many developing countries, which makes it a priority for IFC.

IFC provides support for the pri-vate sector to address rising demand in an environmentally sustainable and socially inclusive way. To help clients fi nance inventories, seeds, fertilizers, chemicals, and fuel for farmers, IFC off ers working- capital facilities. To facilitate trade and lower costs, we pursue investments in infrastructure such as ware-houses and cold- storage facilities. To bring land into sustainable production, we work to improve productivity by transferring tech-nologies and making the best use of resources.

In FY13, our new commitments in agribusiness and forestry totaled nearly $1.3 billion, accounting for about 7 percent of commitments for IFC’s own account.

FINANCIAL MARKETS

Sound, inclusive, and sustainable fi nancial markets are vital to devel-opment as they ensure effi cient resource allocation. IFC’s work with fi nancial intermediaries has helped strengthen fi nancial institutions and overall fi nancial systems. It has also allowed us to support far more

IFC’s leadership role in sustainable private sector development refl ects a special advantage�—� the depth and breadth of expertise we have acquired over more than 50 years of helping emerging- market fi rms succeed and grow.

We have moved to leverage our global industry knowledge�—� across our investment and advisory services�—� to tackle the biggest development challenges of the coming years.

micro, small, and medium enter-prises than we would be able to on our own.

Working through fi nancial inter-mediaries enables IFC to encourage them to become more involved in sectors that are strategic priorities such as women- owned businesses and climate change, and in under-served regions such as fragile and confl ict-aff ected states as well as in housing, infrastructure, and social services.

In FY13, our commitments in fi nancial markets totaled about $3.6 billion, about 20 percent of commitments for IFC’s own account.

CONSUMER AND SOCIAL SERVICES

IFC is the world’s largest multilat-eral investor in private healthcare and education. We work to increase access to high- quality health and education while also supporting job- creating sectors such as tour-ism, retail, and property. We help improve standards of quality and effi ciency, facilitate the exchange of best practices, and create jobs for skilled professionals.

In addition to making direct investments in socially responsible companies, our role includes sharing industry knowledge and expertise, funding smaller companies, raising medical and education standards, and helping clients expand services to lower- income groups. In FY13,


our new commitments in consumer and social services totaled about $1.6 billion, or nearly 9 percent of IFC’s commitments for our own account.

INFRASTRUCTURE

Modern infrastructure spurs eco-nomic growth, improves living standards, and can represent an opportunity to address emerg-ing development challenges, including rapid urbanization and climate change.

It is also an area in which the private sector can make a signifi cant contribution, providing essential services to large numbers of people, effi ciently, aff ordably, and profi tably. This is IFC’s focus: supporting pri-vate infrastructure projects whose innovative, high- impact business models can be widely replicated.

We help increase access to power, transport, and water by fi nancing infrastructure projects and advising client governments on public- private partnerships. We mitigate risk and leverage specialized fi nancial struc-turing and other capabilities. In FY13, our new commitments in this sector totaled $2.2 billion, or about 12 percent of commitments for IFC’s own account.

MANUFACTURING

The manufacturing sector plays a vital role in creating opportunity

and reducing poverty in developing countries. IFC’s manufacturing clients tend to create or maintain more employment than those in any other sector.

We have increased our activi-ties in the sector, which includes construction materials, energy- effi cient machinery, chemicals, and equipment for solar and wind power. We invest in companies that are developing new products and markets, and restructuring and modernizing to become internation-ally competitive.

As these industries represent some of the most carbon- intensive sectors, we are helping clients develop and undertake investments that help reduce carbon emissions and energy consumption.

In FY13, our new commitments in the manufacturing sector totaled $1.3 billion, or about 7 percent of commitments for IFC’s own account.

OIL, GAS, AND MINING

Industries that can harness natural resources are vital for many of the world’s poorest countries. They are a key source of jobs, energy, govern-ment revenues, and a wide array of other benefi ts for local economies. In many countries, large- scale sustain-able investments in these industries can create equally large- scale gains in economic development.

In FY13, our commitments in fi nancial markets totaled about

$3.6billion, about 20 percent of commitments for IFC’s own account.

IFC’s mission in the oil, gas, and mining sector is to help developing countries realize these benefi ts. We provide fi nancing and advice for private sector clients, and also help governments adopt eff ective regula-tions and strengthen their capacity to manage these industries across the value chain.

We support private investment in these industries, and we work to ensure that local communities enjoy concrete benefi ts. In FY13, our new commitments in the sector totaled $390 million, or about 2 percent of commitments for IFC’s own account.

TELECOMMUNICATIONS, MEDIA, AND TECHNOLOGY

Modern information and com-munication technologies make it easier for the poor to obtain access to services and resources. They expand opportunity and make markets and institutions more effi cient. IFC works to extend the availability of such technologies. We channel investments toward private companies that build mod-ern communications infrastructure and information- technology businesses, and develop climate- smart technologies.

IFC increasingly helps clients move beyond their own national borders and into other developing markets. In FY13, our new commit-ments in this sector totaled about $470 million.


Our peopleand practicesIFC’s commitment to alleviating poverty and creating opportunity for the developing world’s most vulnerable people is refl ected in our corporate culture.


OUR VISION

That people should have the opportunity to escape poverty and improve their lives

OUR VALUES

Excellence, Commitment, Integrity, Teamwork, and Diversity

OUR PURPOSE

To create opportunity for people to escape poverty and improve their lives by catalyzing the means for inclusive and sustainable growth, through:

» Mobilizing other sources of fi nance for private enterprise development » Promoting open and competitive markets in developing countries » Supporting companies and other private sector partners where there is a gap » Helping generate productive jobs and deliver essential services to the poor and vulnerable

To achieve our purpose, IFC off ers development- impact solutions through fi rm- level interventions (Investment Services, Advisory Services, and the IFC Asset Management Company); pro-moting global collective action; strengthening governance and standard- setting; and business- enabling-environment work.

THE WAY WE WORK

» We help our clients succeed in a changing world » Good business is sustainable, and sustainability is good business » One IFC, one team, one goal » Diversity creates value » Creating opportunity requires partnership » Global knowledge, local know- how » Innovation is worth the risk » We learn from experience » Work smart and have fun » No frontier is too far or too diffi cult

Our history shows we learn from expe-rience and take on new challenges. Our staff is better positioned than ever to maximize IFC’s development impact. More than half of us are based in devel-oping countries, close to the clients and communities we serve. We are also more diverse than ever�—� nearly two- thirds of our staff hail from developing countries.

A strong corporate culture is central to any organization’s ability to succeed and adapt to new challenges. The IFC Way is a way of being, defi ning, and solidifying IFC’s culture and brand, and a process that engages staff at all levels and in all regions to inform management decision making. It includes our vision, our core corporate values, our purpose, and the way we work.

THE IFC WAY


HOW WE MEASURE DEVELOPMENT RESULTS

We are also now studying the extent to which IFC’s activities change the behavior of other market partici-pants in areas unrelated to our own projects. These changes in behav-ior�—� what we call demonstration eff ects�—� may include things like a bank starting to lend in a new sector, a new developer fi nancing a project similar to the one implemented with IFC support, or a government rep-licating reform instituted by an IFC client government.

Understanding the impact of our activities and feeding into our operations the lessons we learn from results measurement continues to be a priority. To strengthen our abil-ity to do this, we began testing and implementing additional monitoring instruments, and additional evalua-tive approaches.

These eff orts will contribute to the achievement of two overarching World Bank Group goals�—� ending extreme poverty by 2030 and boost-ing shared prosperity. We have also continued to work closely with other development fi nance institutions, or DFIs. We are currently leading a collective eff ort aimed at harmo-nizing a set of core indicators for monitoring development results of investment operations.

Our collaboration with DFIs was further strengthened following the launch of IFC’s Jobs Study (see page 43 for more details). About 30 other institutions agreed to collaborate with us to help create more and better jobs. We are now working on implementing the recommendations of the study.

Measuring the results of our work is critical to understanding how well our strategy is working�—� and whether IFC is reaching people and markets that most need our help.

Our results measurement system features three mutually reinforcing components: the IFC Development Goals, a monitoring system to measure development results, and systematic evaluations of the impact of both our investment and advisory work.

Besides development results, we also track IFC’s “additionality”�—� the distinctive advantages and benefi ts of our involvement in a project.

THE IFC DEVELOPMENT GOALS

The IFC Development Goals are targets for reach, access, or other tangible development outcomes that projects signed or committed by IFC are expected to deliver during their lifetime.

Two such goals�—� pertaining to health, education, and fi nancial services�—� moved from testing into implementation in FY13 and are fully integrated into IFC’s corporate scorecard and incentives for man-agement. They will soon apply also to long- term performance awards for staff .

Whether being tested or imple-mented, the IFC Development Goals have proved useful in steering IFC’s business to where it has the biggest impact. The goals also are encourag-ing staff to work across departments and advisory business lines, adopt-ing cross- cutting and programmatic approaches to enhance develop-ment impact.

We plan for one additional goal to be implemented in FY14�—� track-ing the number of people for whom we increase or improve sustainable farming opportunities.

GOALS

MONITORINGEVALUATION


MONITORING AND TRACKING RESULTS

We use our Development Outcome Tracking System to monitor the devel-opment results of IFC’s investment and advisory services.

For Investment Services, DOTS covers�—� after certain exclusions�—� 1,727 companies under supervision. This report focuses on 716 out of about 780 investments approved between 2004 and 2009, which are mature enough to be rated and recent enough to be relevant. The FY13 ratings refl ect our clients’ 2012 data and performance. Every year, the group of investments we report on shifts by one year.

The report also addresses the current reach of all active investments in IFC’s portfolio. Reach indicators measure the number of people reached by IFC clients�—� or the dollar benefi t to particular stakeholders, regardless of IFC’s invest-ment size.

DOTS does not typically track cer-tain projects, including projects that are expansions of existing ones, split projects, and certain fi nancial products such as rights issues.

For Advisory Services, DOTS covers all projects that are active, completed, or on hold, dating back to FY06. The FY13 ratings are defi ned as a review of 149 completion reports fi led in 2012, of which 124 could be assessed. The rolling average is based on a review of 494 completion reports fi led in calendar years 2010 through 2012, of which 396 were assessed.

Advisory projects that could not be assessed for development eff ectiveness were excluded from the analysis, because they were non- client-facing projects or

because their outcome and impact results had not been achieved by the review dates.

We continue to report on development results for our entire portfolio and have them assured by an external fi rm.

EVALUATINGRESULTS

Evaluation has been integral to IFC’s results measurement since 2005, when IFC fi rst began working with external evaluators to generate useful lessons and produce impartial assessments of develop-ment eff ectiveness. By revealing the factors for success or failure, evaluations help us understand what we need to do more of�—� and less of�—� to achieve IFC’s mission.

IFC’s investment in evaluation has grown rapidly, and we now have more than 20 evaluations ongoing at any given time, covering both investment and advisory services. Our evaluations are undertaken at project, programmatic, or thematic levels, as well as at the level of donor- funded facilities, countries, and regions.

Our evaluation strategy is focused on maximizing opportunities for learning. It has four main objectives: (1) to credibly articulate IFC’s development impact; (2) to learn how to maximize the eff ectiveness of IFC interventions; (3) to provide useful business intelligence to clients and part-ners; and (4) to exchange knowledge with others outside IFC.

These strategic objectives shape our evaluation work program. Our portfolio of evaluations is selected to address knowl-edge gaps, learn lessons from successful and unsuccessful initiatives, assess oper-ations never before evaluated, and deliver evaluation services to interested clients. In particular, the new strategy focuses


1: AgribusinessIncrease or improve sustainable farming opportunities

2: Health and EducationImprove health and education services

3. Financial ServicesIncrease access to fi nancial services for individuals, microenterprises, and SME clients

4: InfrastructureIncrease or improve infrastruc-ture services

5: Economic GrowthIncrease the value added by IFC clients to their respective country’s economy

6: Climate ChangeReduce greenhouse emissions

At any given time, there are more than

20evaluations ongoing, covering both investment and advisory services.


attention on the poverty- reduction and job- creation eff ects of our work that typically cannot be captured by monitoring and tracking alone.

The new evaluation strategy complements the work of the Independent Evaluation Group (see page 92)�—� which reports directly to the Board of Directors and is charged with providing its own assessments and lessons of experi-ence. IEG’s evaluations incorporate fi ndings from IFC’s own monitoring and evaluations. IFC’s evalua-tion staff works closely with IEG to discuss work programs, share knowledge, and align eff orts when-ever possible.

INVESTMENT RESULTS

Over the past fi ve years, DOTS ratings have been broadly stable, staying within a fi ve- percentage-point range. In FY13, IFC’s development results for investment services continued to exceed our long- term target of 65 percent, with 66 percent of our investment clients rated high.

Across the world, our clients continued to increase their devel-opment reach. In Latin America and the Caribbean, the number of loans to micro, small, and medium enterprises rose about 110 percent to 14.4 million. In Sub- Saharan Africa, the number of farmers reached increased by almost 80 percent to over 675,000. In the Middle East and North Africa, the number of patients

reached increased by 61 percent to 3.5 million. Meanwhile, our clients in South Asia provided 120 million phone connections, accounting for 63 percent of total phone connec-tions reported by IFC clients.

By region, our strongest perfor-mance was in Latin America and the Caribbean, where the percentage of clients rated high rose 2 points to 74 percent. The progress refl ected stronger performance by clients in Colombia, Mexico, and Peru. It also refl ected improved performance of fi nancial markets operations, as well as solid performance of clients in funds, infrastructure�—� mainly elec-tric power and transportation�—� and consumer and social services (espe-cially health and education).

Our clients in the Middle East and North Africa also showed improved results, with 65 percent of investment operations rated high�—� an increase of 5 points over the previous year. The increase refl ected improved results in fi nan-cial markets, specifi cally in Egypt. The rating also increased because of positive results in the health sector.

In Europe and Central Asia, the share of clients rated high rose to 64 percent from 61 percent�—� mainly because of solid performance by clients in the infrastructure and funds sectors in Russia, and because of continued improvement in the results of manufacturing clients in Turkey.

Our ratings weakened in East Asia and the Pacifi c, Sub- Saharan Africa, and South Asia. In East Asia and the Pacifi c, 70 percent of our clients were rated high, a decline of 10 points from the previous year.

HOW IFC MONITORS RESULTS

DOTS allows for real- time tracking of development results throughout the project cycle. At the outset of a project, IFC staff members identify appropriate indi-cators with baselines and targets. They track progress throughout supervision, which allows for real- time feedback into operations, until project closure.

This report provides the DOTS score�—� the percent-age of projects that have achieved a high rating (in the top half of the rating scale)�—� for IFC overall and by region, industry, and business line.

Ratings are based on qualitative assessments pro-vided by project teams. They are reviewed centrally by the Development Impact Department, with the support of an automated system of fl ags that helps identify deviations from rating requirements.

For Investment Services, the overall DOTS score is a synthesis of four performance areas (fi nancial, economic, environmental and social, and broader private sector development impacts). The weighting of each area is informed by standardized industry- specifi c indicators, comparing actual results against absolute benchmarks. To obtain a high rating, a project must make a positive contribution to the host country’s development.

This year, we excluded trade-fi nance clients from the weighting to ensure methodological consistency in the calculation of both weighted and unweighted scores. Accordingly, we restated the weighted DOTS scores shown on page 29.

For Advisory Services, the overall DOTS score or development- eff ectiveness rating is a synthesis of the overall strategic relevance, effi ciency, and eff ective-ness (as measured by project outputs, outcomes, and impacts). At project completion, intended results are compared with achieved results.

The DOTS score is part of IFC’s corporate score-card and cascades into department scorecards and incentives for individual staff members.


The drop refl ected the deteriorating performance of manufacturing com-panies�—� predominantly in China, where slower growth compressed margins. It also refl ected the weaker performance of clients in fi nancial markets, specifi cally in Indonesia.

In Sub- Saharan Africa, 61 percent of clients were rated high�—� a decline of 3 points that refl ected deteri-oration among clients in Ghana, Tanzania, and Cameroon. Clients in the funds sector showed improved results, while ratings declined in agribusiness and forestry.

In South Asia, 60 percent of our clients were rated high in FY13�—� down from 73 percent in FY12. The decline refl ected the weak perfor-mance of Indian companies, which account for 90 percent of the region’s rated portfolio.

At the industry level, ratings improved for clients in the funds sector, were steady in fi nancial markets, and declined in all other sectors. Clients’ development reach, however, continued to be signifi cant (see page 86).

The funds sector had the best performance, with 79 percent of clients rated high�—� thanks to better performance of new and existing investments, particularly in Europe and Central Asia and in Latin America and the Caribbean. The performance of investments in the fi nancial markets sector remained stable, with 70 percent of clients rated high.

In the infrastructure sector, the share of projects rated high fell by 3 points to 73 percent, mainly because of weaker performance of clients in the warehousing, storage,

shipping, and logistics sectors. Even so, the DOTS score for the sector continued to be well above the IFC average.

In the agribusiness and forestry sector, 68 percent of our clients were rated high�—� a decline of 4 points from FY12. The drop was mostly due to deteriorating ratings of clients in Sub- Saharan Africa and South Asia.

In oil, gas, and mining, 64 percent of clients were rated high, down from 69 percent in FY12. The exit of high- performing clients from the reporting cohort was the main rea-son for the decline this year, while the sector continued to suff er from political uncertainties in the Middle East and North Africa and from the commercial diffi culties of some cli-ents in Latin America.

In the consumer and social services sector, the percentage of investments rated high went from 57 percent to 56 percent amid a dete-rioration in the tourism sector and in East Asia. The percentage of clients rated high in the telecommunica-tions, media, and technology sectors declined a point to 55 percent. Our clients in this sector are often start- ups, so their odds of success generally tend to be lower.

In the manufacturing sector, 49 percent of clients were rated high�—� a decline of 14 points from the previous year. Performance deteri-orated across all regions, with the largest declines occurring among clients in the Middle East and North Africa and in South Asia.

The funds sector had the best per-formance, with

79%of clients rated high�—� thanks to better performance of new and existing investments, particularly in Europe and Central Asia and in Latin America and the Caribbean.


ADVISORY RESULTS

Development eff ectiveness ratings and client satisfaction both reached record highs for IFC Advisory Services in FY13. Development eff ectiveness ratings increased for the fourth consecutive year, with 76 percent of 124 advisory projects that closed during the year and could be assessed for development eff ectiveness being rated high. Outcomes could be assessed for all 124 projects, and impacts could be evaluated for 73 percent of them.

Ratings improved for operations in IDA countries�—� climbing to 78 percent in FY13 from 74 percent in FY12. Ninety percent of clients reported satisfaction with IFC Advisory Services work in FY13.

To strengthen our impact, Advisory Services undertakes programmatic approaches that harness contributions from across our four business lines: Access to Finance, Investment Climate, Public- Private Partnerships, and Sustainable Business. Here are a few selected highlights from 2012 across Advisory Services:

» We helped governments sign nine public-private partnership contracts (six in IDA countries, including one in fragile and confl ict-aff ected situations), expected to improve access to infrastructure and health services for over 3 mil-lion people (1.7 million in fragile and confl ict-aff ected situations), and mobilize $750 million in pri-vate investment. » We helped 3 million people receive off - grid lighting; helped 1.3 mil-lion people gain access to village

phones; and provided capacity building to almost 350,000 people (76 percent in IDA countries), including to farmers, entrepre-neurs, and management of small and medium enterprises. » We helped governments in 43 countries adopt 76 investment climate reforms (55 reforms in IDA countries, including 26 reforms in fragile and confl ict- aff ected situations). » We provided governments with industry- level reform and investment- promotion support that have contributed to an estimated $750 million in new investments. » We helped fi rms improve corpo-rate governance practices, which contributed to additional fi nancing of $200 million, $150 million of which was from IFC. » We worked with 149 fi nancial intermediaries, in partnership with IFC Investment Services, that provided over 14.2 million micro-fi nance and SME loans (15 percent in IDA countries) totaling nearly $103 billion; we also worked with 20 fi nancial intermediaries that provided 207,000 housing fi nance loans, totaling more than $7.3 billion. » We helped improve fi nancial markets infrastructure through working with collateral regis-tries that facilitated over 40,000 SMEs to receive $4.5 billion in fi nancing secured with movable property, and helped create, strengthen or license four credit bureau operators. » We helped fi rms avoid green-house gas emissions estimated at 3.7 million metric tons annually (calculation based on method-ologies in place before adoption of a standardized methodology in 2012).

LEARNING FROM OUR WORK IN CONFLICT- AFFECTED COUNTRIES

To maximize opportunities for learning, IFC increas-ingly conducts global, regional, programmatic, and thematic evaluations and meta- evaluations of our work�—� in addition to evaluations of individual projects.

Recently an external consulting fi rm completed a mid- term review of our Confl ict- Aff ected States in Africa program. The program, also known as CASA, was launched in 2008 to enhance the delivery of IFC Advisory Services in fragile and confl ict- aff ected states. It now serves eight countries�—� Burundi, Central African Republic, Côte d’Ivoire, Democratic Republic of Congo, Guinea, Liberia, Sierra Leone, and South Sudan.

The review found that CASA’s focus on private sec-tor development addresses one of the most important challenges in post- confl ict reconstruction. According to stakeholder feedback, no other agency addresses private sector development in these countries as comprehen-sively as IFC does through the CASA program.

CASA promotes private sector development in one of three ways: fi rst, it facilitates tailored and coordi-nated Advisory Services projects; second, it provides funds to support implementation of projects; and third, it promotes knowledge management, including the dissemination of IFC tools, lessons learned, and best practice.

Based on the review, the consulting fi rm recom-mended that IFC build on the program’s success by going beyond a country- by-country approach and leveraging the distinctive strengths of all four of IFC’s advisory business lines�—� Access to Finance, Investment Climate, Public- Private Partnerships, and Sustainable Business. Such an approach, it said, would help build key relation-ships and enhance CASA’s eff ectiveness.

The fi rm also recommended that IFC extend CASA’s reach by establishing similar programs in new coun-tries and advocating for wider adoption of this model within the World Bank Group. IFC’s senior management has endorsed expanding the program to 18 countries in sub- Saharan Africa and is implementing other recommendations.


DOTS PERFORMANCE CATEGORIES: INVESTMENT SERVICES

Performance Category

General Indicators and Benchmarks

Examples of Specifi c Indicators Assessed against Targets

Financial Performance Returns to fi nanciers, e.g., fi nancial returns at or above weighted average cost of capital

Return on invested capital, return on equity, project implemented on time and on budget

Economic Performance Returns to society, e.g., economic returns at or above 10 percent or the weighted average cost of capital

Economic return on invested capital, number of connections to basic services, loans to small enterprises, people employed, tax payments

Environmental and Social Performance

Project meets IFC’s Performance Standards

Environmental and social management systems, effl uent or emission levels, community development programs

Private Sector Development Impact

Project contributes to improvement for the private sector beyond the project company

Demonstration effects (other fi rms replicating a new approach, product, or service), linkages to other private companies, corporate governance improvements

DOTS PERFORMANCE CATEGORIES: ADVISORY SERVICES

Performance Category

General Indicators and Benchmarks

Examples of Specifi c Indicators Assessed against Targets

Strategic Relevance Potential impact on local, regional, national economy

Client contributions, alignment with country strategy

Effi ciency Returns on investment in advisory operations

Cost- benefi t ratios, project implemented on time and budget

Effectiveness Outputs, outcomes, and impacts. Project contributes to improvement for the client, the benefi ciaries, and the broader private sector

Improvements in operations, investments enabled, increase in revenues for benefi ciaries, cost savings from policy reforms


GoalFY13

IDG Target

FY13 IDG

Commitments

Percent of Target Achieved

Increase or improve sustainable farming opportunities

Benefi t 1 million people

760,000 people

76%

Improve health and education services

Benefi t 4.22 million

people

7.06 million people

167%

Increase access to fi nancial services for microfi nance clients


people

41.25 million people

147%

Increase access to fi nancial services for SME clients


people

1.04 million people

90%

Increase or improve infrastructure services


people

36.74 million people

186%

Reduce greenhouse-gas emissions

Reduce by 4.90 million metric

tons of CO2 equivalent per year

6.20 million metric tons

127%


FIVE-YEAR PERFORMANCEADVISORY SERVICES DOTS SCORE, FY09–FY13% Rated High

FY13FY12FY11FY10FY09

56%

62%67%

72%

76%

0%

20%

40%

60%

80%

100%

DEVELOPMENT REACH BY IFC’S INVESTMENT CLIENTS

Portfolio CY11

Portfolio CY12

Investments

Employment (millions of jobs)1 2.5 2.7

Microfi nance loans2

Number (million) 19.7 22.0

Amount ($ billions) 19.84 24.03

SME loans2

Number (million) 3.3 5.8

Amount ($ billions) 181.25 241.30

Customers reached with services

Power generation (millions)3 47.0 52.2

Power distribution (millions) 49.2 45.7

Water distribution (millions)4 38.7 42.1

Gas distribution (millions)5 22.4 33.8

Phone connections (millions)6 172.2 192.0

Patients reached (millions)7 13.0 17.2

Students reached (millions) 0.9 1.0

Farmers reached (millions) 3.3 3.1

Payments to suppliers and governments

Domestic purchases of goods and services ($ billions) 49.84 46.19

Contribution to government revenues or savings ($ billions) 21.73 27.00

These fi gures represent the reach of IFC clients as of the end of CY11 and CY12.

CY11 and CY12 portfolio data are not strictly comparable, because they are based on

a changed portfolio of IFC clients. In many cases, results refl ect also contributions

from Advisory Services.

1. Portfolio fi gures for employment include jobs provided by Funds.

2. Portfolio reach fi gures represent SME and microfi nance outstanding loan portfolio

of IFC clients as of end of CY11 and CY12, for MSME-oriented fi nancial institutions/

projects. 268 and 285 clients were required to report their end-of-year SME and

microfi nance portfolios in CY11 and CY12, respectively. 252 and 269 clients did so for

CY11 and CY12, respectively. The missing data were extrapolated.

3. CY11 total Power Generation customers revised due to the restatement of one client

value in East Asia and the Pacifi c.

4. CY11 total Water Distribution customers revised due to the restatement of one client

value in Sub-Saharan Africa.

5. One client in East Asia and the Pacifi c contributed 31.14 million of Gas Distribution

customers in CY12.

6. One client in South Asia contributed 112.7 million of phone connection customers

in CY12.

7. CY11 total Patients Reached revised due to the restatement of one client value in

Europe and Central Asia.

FIVE-YEAR PERFORMANCEINVESTMENT SERVICES DOTS SCORE, FY09–FY13% Rated High

FY13FY12FY11FY10FY09

71% 71%

67% 68%66%

0%

20%

40%

60%

80%

100%


INVESTMENT SERVICES DOTS SCORE BY REGION, FY12 VS. FY13% Rated High

IFC Total

Latin America and the Caribbean

East Asia and the Pacific

Middle East and North Africa

Europe and Central Asia

Sub-Saharan Africa

South Asia

FY12 FY13

INVESTMENT SERVICES DOTS SCORE BY PERFORMANCE AREA, FY13% Rated High

Development Outcome

Financial Performance

Economic Performance

Environment & Social

Performance

Private Sector Development

Impact

Unweighted Weighted

INVESTMENT SERVICES DOTS SCORE BY INDUSTRY, FY12 VS. FY13% Rated High

IFC Total

Funds

Infrastructure

Financial Markets

Agribusiness & Forestry

Oil, Gas & Mining

Consumer & Social Services

Telecoms and IT

Manufacturing

FY12 FY13

66%

73%

50%

58%

60%

69%

67%

69%

77%

83%

ADVISORY SERVICES DOTS SCORE BY BUSINESS LINE% Rated High

IFC Total

Sustainable Business

Investment Climate

Access to Finance

Public-Private Partnerships

FY13 FY11 to FY13

ADVISORY SERVICES DOTS SCORE BY REGION% Rated High

IFC Total

South Asia


Latin America and the Caribbean

Sub-Saharan Africa

East Asia and the Pacific


FY13 FY11 to FY13

68%

66%

73%

79%

76%

73%

70%

70%

72%

68%

69%

64%

57%

56%

56%

55%

63%

49%

68%

66%

72%

74%

80%

70%

60%

65%

61%

64%

64%

61%

73%

60%

76%

71%

92%

84%

76%

80%

76%

79%

72%

67%

67%

68%

64%

50%

76%

71%

87%

75%

75%

70%

74%

75%

50%

55%


OUR STAFF

IFC’s employees are diverse. They are our most important asset. Representing more than 140 countries, our staff brings innovative solutions and global best practices to local clients.

Our offi ces are in 109 cities in 99 countries. More than half of us�—� 57 percent�—� are based in fi eld offi ces, an increasing percentage that refl ects our commitment to decentralization. Most IFC staff also hail from developing countries, 63 percent in all, a diversity that enriches our perspective and underscores our focus on areas where private sector development can have the biggest impact.

WHERE WE WORK

Location FY05 FY13

Washington, D.C. 1,350 (55%) 1,737 (43%)

Field Offi ces 1,083 (45%) 2,278 (57%)

Total IFC Staff 2,433 4,015

NATIONAL ORIGINS — ALL FULL- TIME STAFF

National Origins FY05 FY13

Developed Countries 1,004 (41%) 1,502 (37%)

Developing Countries 1,429 (59%) 2,513 (63%)

Total 2,433 4,015

NATIONAL ORIGINS — ALL STAFF AT OFFICER LEVEL AND HIGHER

National Origins FY05 FY13

Developed Countries 690 (50%) 1,163 (44%)

Developing Countries 682 (50%) 1,462 (56%)

Total 1,372 2,625

GENDER — ALL FULL- TIME STAFF

Gender FY05 FY13

Male Staff 1,194 (49%) 1,880 (47%)

Female Staff 1,239 (51%) 2,135 (53%)

Total 2,433 4,015

GENDER — ALL STAFF AT OFFICER LEVEL AND HIGHER

Gender FY05 FY13

Male Staff 911 (66%) 1,507 (57%)

Female Staff 461 (34%) 1,118 (43%)

Total 1,372 2,625


COMPENSATION

IFC’s compensation guidelines are part of the World Bank Group’s framework. The international compet-itiveness of compensation is essential to our capacity to attract and retain a highly qualifi ed, diverse staff . The salary structure of the World Bank Group for staff recruited in Washington, D.C., is determined with ref-erence to the U.S. market, which historically has been globally competitive. Salaries for staff hired in countries outside the United States are based on local competitive-ness, determined by independent local market surveys. Based on the World Bank Group’s status as a multilateral organization, staff salaries are determined on a net- of-tax basis.

VARIABLE PAY PROGRAMS

IFC’s variable pay programs consist of several components, including recognition, annual, and long- term performance awards that support IFC’s high- performance culture. These awards are designed to encourage teamwork, reward top performance, and sup-port IFC’s strategic priorities, such as projects in Fragile and Confl ict- Aff ected States.

IFC’s staff represents more than

140countries.

63%of our staff hail from developing countries.

57%are based in fi eld offi ces.

BENEFITS PROGRAMS

IFC provides a competitive package of benefi ts, including medical insurance and a retirement plan. Washington- based employees are covered by Aetna, contracted through an open procurement process. Other staff members are covered by Vanbreda, an international healthcare provider. Medical insurance costs are shared�—� 75 percent is paid by IFC and 25 percent by the insured.

IFC’s pension is part of the World Bank Group plan, based on two benefi t components: fi rst, years of service, salary, and retirement age; second, a cash savings plan, which includes a mandatory contribution of fi ve per-cent of salary, to which IFC adds 10 percent annually. Legacy pension benefi ts from earlier World Bank Group pension plans include termination grants and additional cash payouts.

STAFF SALARY STRUCTURE (WASHINGTON, D.C.)During the period July 1, 2012, to June 30, 2013, the salary structure (net of tax) and average net salaries/benefi ts for World Bank Group staff were as follows:

GRADES REPRESENTATIVE JOB TITLES MINIMUM ($)MARKET

REFERENCE ($) MAXIMUM ($)

STAFF AT GRADE LEVEL (%)

AVERAGE SALARY/

GRADEAVERAGE BENEFITSa

GA Offi ce Assistant 25,100 32,600 42,400 0.0% 34,269 19,591

GB Team Assistant, Information Technician 31,700 41,200 57,700 0.7% 41,379 23,657

GC Program Assistant, Information Assistant 39,100 50,900 71,300 9.2% 53,698 30,699

GD Senior Program Assistant, Information Specialist, Budget Assistant 46,200 60,100 84,200 7.5% 66,204 37,849

GE Analyst 62,100 80,700 113,000 9.6% 77,073 44,063

GF Professional 82,500 107,300 150,200 19.8% 100,089 57,221

GG Senior Professional 111,300 144,700 202,500 31.4% 137,075 78,366

GH Manager, Lead Professional 151,700 197,200 254,900 18.4% 188,958 108,027

GI Director, Senior Advisor 202,200 264,500 303,300 2.9% 249,266 142,505

GJ Vice President 276,700 310,000 347,100 0.4% 309,632 177,016

GK Managing Director, Executive Vice President 304,000 344,700 379,100 0.1% 354,189 195,637

Note: Because World Bank Group (WBG) staff, other than U.S. citizens, usually are not required to pay income taxes on their WBG compensation, the salaries are set on a net-of-tax basis, which is generally equivalent to the after-

tax take-home pay of the employees of the comparator organizations and fi rms from which WBG salaries are derived. Only a relative small minority of staff will reach the upper third of the salary range.

a. Includes medical, life and disability insurance; accrued termination benefi ts; and other nonsalary benefi ts.


OUR GOVERNANCE

Our Place in the World Bank Group

The World Bank Group is a vital source of fi nancial and technical assistance to developing countries. Established in 1944, its mission is to fi ght poverty with passion and professionalism, for lasting results.

IFC is one of fi ve members of the Bank Group, though it is a separate legal entity with separate Articles of Agreement, share capital, fi nancial structure, management, and staff . Membership in IFC is open only to member countries of the World Bank. As of June 30, 2013, IFC’s total cumulative paid- in capital of about $2.4 billion was held by 184 member countries. These countries guide IFC’s strategy, programs, and activities.

IFC works with the private sector to create opportunity where it’s needed most. Since our founding in 1956, we have committed more than $144 billion of our own funds for private sector investments in developing countries, and we have mobilized billions more from others.

In working toward a world free of poverty, we collaborate closely with other members of the Bank Group, including:

» The International Bank for Reconstruction and Development, which lends to governments of middle- income and creditworthy low- income countries. » The International Development Association, which provides interest- free loans�—� called credits�—� to governments of the poorest countries. » The Multilateral Investment Guarantee Agency, which provides guarantees against losses caused by noncommercial risks to inves-tors in developing countries. » The International Centre for Settlement of Investment Disputes, which provides international facilities for conciliation and arbi-tration of investment disputes.

OUR BOARD

Each of our member countries appoints one governor and one alter-nate. Corporate powers are vested in the Board of Governors, which delegates most powers to a board of 25 directors. Voting power on issues brought before them is weighted according to the share capital each director represents.

The directors meet regularly at World Bank Group headquarters in Washington, D.C., where they review and decide on investments and provide overall strategic guid-ance to IFC management. The President of the World Bank Group is also President of IFC.

EXECUTIVE COMPENSATION

The salary of the President of the World Bank Group is determined by the Board of Directors. The salary structure for IFC’s Executive Vice President and CEO is determined by positioning a midpoint between the salary structure of staff at the high-est level, as determined annually by independent U.S. compensation market surveys, and the salary of the World Bank Group President. The compensation of our executive leadership is transparent. IFC’s Executive Vice President and CEO, Jin- Yong Cai, received a salary of $350,000, net of taxes. There are no executive incentive compensa-tion packages.

OUR MEMBER COUNTRIES — STRONG SHAREHOLDER SUPPORT

Capital Stock by Country

Grand Total 100.00%

United States 23.69%

Japan 5.87%

Germany 5.36%

France 5.04%

United Kingdom 5.04%

Canada 3.38%

India 3.38%

Italy 3.38%

Russian Federation 3.38%

Netherlands 2.34%

174 Other Countries 39.14%


1

23

4

56 7

8

9

10

11

12

13

1415

16

18

19

20

21

22 23

24

25

17

FAR LEFT ROW:�No. 5 - John Whitehead, New Zealand; No. 4 - Roberto B. Tan, Philippines; No. 3 - Satu Santala, Finland

SECOND ROW LEFT:�No. 7 - Shaolin Yang, China; No. 6 - Marie-Lucie Morin, Canada; No. 2 - Agapito Mendes Dias, Sao Tome and Principe; No. 1 - Merza Hasan, Kuwait

THIRD ROW LEFT:�No. 9 - Vadim Grishin, Russian Federation; No. 8 - Gwen Hines, United Kingdom; No. 10 - Mukesh N. Prasad, India

MIDDLE ROW:�No. 12 - Piero Cipollone, Italy; No. 14 - Ibrahim M. Alturki (alt.), Saudi Arabia; No. 13 - Omar Bougara, Algeria; No. 11 - Mansur Muhtar, Nigeria

FIRST RIGHT ROW:�No. 18 - Denny H. Kalyalya, Zambia; No. 19 - César Guido Forcieri, Argentina; No. 15 - Gino Alzetta, Belgium; No. 16 - Hideaki Suzuki, Japan; No. 17 - Ingrid-Gabriela Hoven, Germany

SECOND RIGHT ROW:�No. 20 - Juan José Bravo, Mexico; No. 21 - Sara Aviel (alt.), United States

FAR RIGHT ROW:�No. 22 - Hervé de Villeroché, France; No. 23 - Frank Heemskerk, Netherlands; No. 24 - Jörg Frieden, Switzerland; No. 25 - Sundaran Annamalai, Malaysia


ACCOUNTABILITY

INDEPENDENT EVALUATION GROUP

The Independent Evaluation Group generates lessons from evaluations to contribute to IFC’s learning agenda. IEG is independent of IFC management and reports directly to IFC’s Board of Directors. It aims to strengthen IFC’s performance and inform its strategies and future directions.

IEG’s Biennial Report on Operations Evaluation, which focused on assessing, monitor-ing, and evaluation in IFC and MIGA, reported that IFC has an advanced results management sys-tem to gather, analyze, and apply investment and advisory project information. IEG found that IFC has made strides in developing, aggre-gating, disclosing, and strategically using its development indicators. The data from the Development Outcome Tracking System are used in corporate and departmental scorecards and corporation- wide development goals. IEG’s evaluation provided important input to refi ne and strengthen IFC’s results man-agement system.

IEG validates 45 percent of eligible IFC investment projects

and 51 percent of eligible advisory projects. IEG communicates these ratings to IFC and aggregates them in its annual evaluation of World Bank Group’s results and perfor-mance. That most recent IEG report found that IFC’s overall development results have been relatively stable on a three- year rolling average.

Another IEG evaluation this year covered the Global Trade Finance Program. IEG reported that the pro-gram signifi cantly improved IFC’s engagement in trade fi nance and has been eff ective in helping expand the supply of trade fi nance by mitigating risks that would otherwise inhibit the activity of commercial banks.

This year IEG relaunched E- LRN, a database of lessons from IFC investment projects since 1996. E- LRN gives access to more than 3,000 lessons from 15 years of evaluations. The lessons are searchable and easily accessible to staff , helping improve IFC’s develop-ment eff ectiveness.

IEG’s reports are disclosed on its website: http://ieg.worldbankgroup.org.

OFFICE OF THE COMPLIANCE ADVISOR OMBUDSMAN

The Offi ce of the Compliance Advisor Ombudsman is the inde-pendent recourse mechanism for IFC and the Multilateral Investment Guarantee Agency. CAO helps address complaints from people aff ected by IFC and MIGA projects, and reports directly to the World Bank Group President.

CAO’s goal is to enhance the envi-ronmental and social performance of projects and to foster greater public accountability of IFC and MIGA. Through its three roles, CAO helps resolve disputes between local com-munities and IFC clients; provides independent oversight of IFC’s envi-ronmental and social compliance; and provides independent advice to the President and IFC management.

During the year, CAO addressed 42 cases in 19 countries. These cases related to IFC invest-ments in extractive industries, infrastructure, agribusiness, man-ufacturing, advisory services, and fi nancial intermediaries.

In its compliance role, CAO han-dled 12 audits of IFC’s performance. CAO determined it had suffi cient

IEG validates

45%of eligible IFC investment projects and 51 percent of eligible advisory projects.


basis to close two regarding IFC’s investments in palm oil in Indonesia and agribusiness in Peru. Seven audits are in process, while CAO is monitoring IFC’s response to three audits related to metals manufac-turing in Mozambique, the power sector in Kosovo, and global fi nan-cial intermediaries.

The fi nancial intermediaries audit analyzed 188 IFC investments and raised concerns about IFC’s approach to supporting appropriate environmental and social man-agement capacities in its fi nancial intermediary clients, and identifi ed challenges in the way IFC monitors the environmental and social impact of such investments. IFC is working on an action plan to address CAO’s audit fi ndings.

CAO’s dispute- resolution team is working in Albania, Cambodia, Cameroon, Chad, Colombia, Indonesia, India, Mexico, Mongolia, Nicaragua, Papua New Guinea, Peru, South Africa, and Uganda helping communities and IFC cli-ents address issues of concern. CAO closed a labor complaint related to a fi nancial intermediary client in Africa, and is monitoring settle-ments for two cases in the palm oil

sector in Indonesia and sugar indus-try in Nicaragua, respectively.

CAO this year revised its Operational Guidelines in consulta-tion with civil society, IFC/MIGA, and other stakeholders. The revised guidelines were implemented in March and aim to improve CAO’s eff ectiveness.

More information about CAO is available at www.cao- ombudsman.org

CAO addressed

42cases in 19 countries.


PARTNERSHIPS

FORMING PRODUCTIVE PARTNERSHIPS

IFC works with governments, cor-porations, foundations, and other multilateral organizations and development institutions to foster innovative partnerships that create prosperity and eradicate poverty. As the largest global development institution focused on the private sector in developing countries, IFC, together with our partners, strives to address urgent develop-ment challenges.

Our collaborative approach emphasizes the power of long- term partnerships, maintains a focus on results measurement and effi ciency, and leverages the contributions of our partners.

WORKING WITH DONOR PARTNERS

IFC maintains long- term relation-ships with its donor partners, with whom we work to promote private sector development across the globe.

Our donor partners strongly support the work of IFC Advisory Services, to which they committed more than $254 million in FY13. In addition, a number of these partners have deepened their collaboration with IFC by investing alongside us on various investment initiatives.

In cooperation with the global donor community, IFC launched several strategic partnerships in FY13, which blended fl exible fi nancing, thought leadership, and knowledge sharing to maximize our development impact.

We created the Canada- IFC Partnership Fund to address pressing development issues in the extractive and fi nancial sectors and to promote gender equality worldwide. We strengthened the Luxembourg- IFC and Ireland- IFC Partnerships to jointly promote

sustainable business, corporate governance, and a more robust investment climate globally, as well as support confl ict- aff ected states in Africa. We also extended the Netherlands- IFC Partnership to work together on sustainable busi-ness, investment climate, access to fi nance, public- private partnerships, and confl ict situations.

In Asia, we established the Pacifi c Partnership with Australia and New Zealand to help drive regional private sector development. We also deepened our partnership with Japan to further our activities in Asia and sub- Saharan Africa.

Here are a few additional high-lights of our work with partners in FY13:

» Austria’s Federal Ministry of Finance renewed its commit-ment to enhance collaboration in Eastern Europe and Central Asia, with a focus on public- private partnerships, agribusiness, and sustainable energy. Likewise, the Development Bank of Austria supported increased investments in renewable energy and energy effi ciency in East Africa. » The Bill & Melinda Gates Foundation and IFC continued cooperation in the water and sanitation sector, and in access to fi nance, launching a market development project for house-hold sanitation in Kenya and a mobile fi nancial services project in Tanzania. » The Government of Canada con-tributed to strengthening the investment climate in Sub- Saharan Africa and Latin America and the Caribbean as well as enhancing food security in East Asia and the Pacifi c. Canada also supported our climate- change activities as an investor in the IFC Catalyst Fund.

» The Government of Denmark sup-ported our resource effi ciency and clean energy programs in Egypt and Tunisia. » The Government of the French Republic continued its cooper-ation with IFC on the Business Law Reform Program in Sub- Saharan Africa. » Germany’s Gesellschaft für Internationale Zusammenarbeit contributed to IFC’s work with fi nancial institutions to improve their social and environmental risk-management activities, while the Federal Ministry for Economic Cooperation and Development helped IFC explore opportunities for green- growth investments. » The Netherlands’ Ministry of Foreign Aff airs supported job cre-ation in the Middle East and North Africa, water- related activities in South Asia, investment- climate reforms in Sub- Saharan Africa, and the Global SME Finance Innovation program. In addition, the Netherlands provided much- needed trade fi nancing through a contribution to our Global Trade Liquidity Program. » Norway’s Ministry of Foreign Aff airs provided additional funding to IFC’s Confl ict- Aff ected States in Africa Initiative. » The Republic of South Africa, through the Department of Trade and Industry, renewed its commit-ment to IFC’s private sector devel-opment activities in Africa. » The Swedish International Development Cooperation Agency became a partner in our pri-vate sector development work in Ethiopia. » Switzerland’s State Secretariat for Economic Aff airs supported IFC’s work in investment climate, access to fi nance, infrastructure, and environmental and social risk

In FY13, more than

$254million was committed by donor partners to support IFC’s advisory work.

$44billion was provided by international fi nancial institutions for private sector development in 2011.


management globally. SECO also pro-vided substantial support to IFC’s sus-tainable business advisory activities, with a particular emphasis on activities that strengthen gender equality. » The United Kingdom’s Department for International Development contributed to our work on investment climate in Central Asia and Sub- Saharan Africa, regional trade and SME development in South Asia, private- public partnerships in Central and South Asia, and job creation in the Middle East and North Africa. DFID also committed to the private sector window of the Global Agriculture and Food Security Program. In addi-tion, DFID and the U.K. Department for Energy & Climate Change made a signifi cant commitment to the IFC Catalyst Fund. » The United States Agency for International Development supported IFC’s business reform activities in Eastern Europe and Central Asia, Latin America and the Caribbean, and the Middle East and North Africa.

FINANCIAL COMMITMENTS TO IFC ADVISORY SERVICES(US$ Million Equivalent)*

Summary FY12 FY13

Governments 247.28 239.61

Institutional/Multilateral Partners 10.95 1.66

Corporations, Foundations, and NGOs 43.13 12.35

Total 301.36 253.62

*Unaudited fi gures

Governments FY12 FY13

Australia 1.57 21.87

Austria 25.55 12.70

Canada 5.63 47.83

Denmark 0.96 3.61

Finland 0.13 0.00

France 0.03 2.65

Germany 0.60 1.15

Ireland 1.51 1.12

Japan 9.48 7.22

Korea 1.00 0.00

Luxembourg 0.00 6.79

The Netherlands 42.37 18.59

Governments FY12 FY13

New Zealand 0.00 4.00

Norway 4.85 2.01

South Africa 0.00 0.67

Sweden 12.38 5.32

Switzerland 57.15 63.51

United Kingdom 69.94 34.79

United States 14.14 5.78

Total 247.28 239.61

Institutional & Private Partners FY12 FY13

Blue Moon Fund Inc. 0.00 0.25

BNDESPAR 3.00 0.00

The Coca-Cola Company* 0.00 2.00

CTF 0.80 0.50

Disney Worldwide Services, Inc. 0.05 0.00

European Commission 8.90 0.00

Bill & Melinda Gates Foundation 2.57 2.87

Inter-American Development Bank 1.00 0.00

Kauffman Foundation 0.05 0.00

Marie Stopes International 0.00 3.87

The MasterCard Foundation 37.45 0.03

Nestlé SA* 0.00 1.00

Omidyar Network Fund, Inc. 0.00 0.07

PepsiCo Foundation* 0.00 2.00

SABMiller PLC* 0.00 0.25

UN Agencies/Entities 0.25 1.16

Total 54.08 14.01

*Contributor to the 2030 — Water Resource Group

WORKING WITH OTHER DEVELOPMENT INSTITUTIONS

International fi nance institutions�—� includ-ing multilateral and bilateral development fi nance institutions�—� play a critical role in spurring the private sector to help improve lives and reduce poverty.

They have a track record of success in diffi cult environments. They provide capital when private markets become risk- averse. They provide advice that strengthens markets and makes pri-vate sector development inclusive and sustainable.

Over the past decade, the private sector fi nancing activities of international fi nance institutions in developing countries qua-drupled to more than $44 billion in 2011.

Every dollar invested by these institutions unlocks $2 to $3 of investment from others.

IFC has teamed up with an array of IFIs, pooling resources to share knowl-edge, expand reach, and maximize impact. Following the pattern of previous years, the private sector operations of IFIs continue their strong focus on the fi nancial sector and infrastructure, and additional areas of emphasis remain the Middle East, renew-able energy, and food security.

Collaboration among these institu-tions also continues to expand. Ongoing areas of cooperation include the Master Cooperation Agreement with 17 develop-ment fi nance institutions. The agreement details how such institutions work together�—� through loan syndications�—� to co- fi nance projects led by IFC. We also col-laborate on the Busan Initiative follow- up, corporate governance, gender, and climate change. Joint eff orts on concessional fi nance, local-currency fi nance, integrity issues, and harmonizing development indi-cators continue to be led by IFC.

Since January 2012, IFC has been leading an outreach campaign in Europe to promote the themes of the report International Finance Institutions and Development Through the Private Sector. At the conference to launch IFC Jobs Study in January 2013, 28 institutions issued a joint communiqué pledging to collaborate to create more and better jobs (see page 43). IFC also continues to build leadership in corporate governance, for example through the IFI Corporate Governance Development Framework, which is based on IFC’s methodology, in collaboration with almost 30 fi nancial institutions.

The following development fi nance insti-tutions have invested in funds managed by IFC Asset Management Company:

» Japan Bank for International Cooperation » Abu Dhabi Fund for Development » African Development Bank » CDC Group » European Investment Bank » The OPEC Fund for International Development


MANAGING RISKS

PORTFOLIO MANAGEMENT

Portfolio management is an intrinsic part of managing IFC’s business to ensure strong fi nancial and develop-ment results of our projects.

IFC’s management reviews our entire portfolio globally on a quarterly basis and reports on the portfolio performance to the Board annually. Our portfolio teams, largely based in fi eld offi ces, complement global reviews with asset- by-asset quarterly reviews.

On the corporate level, IFC com-bines the analysis of our $50 billion portfolio performance with projec-tions of global macroeconomic and market trends to inform decisions about our future investments. IFC also regularly tests the performance of the portfolio against possible macroeconomic developments in emerging markets to identify and proactively address risks. Stress tests serve as a basis to determine the potential impact of macroeconomic events on the IFC portfolio.

On the project level, IFC actively monitors compliance with invest-ment agreements, visits sites to evaluate project status, and helps identify solutions to address poten-tial problems. We systematically

track environmental and social per-formance, and measures fi nancial and development results.

For projects in fi nancial distress, our Special Operations Department determines the appropriate reme-dial actions. It seeks to negotiate agreements with creditors and shareholders to share the burden of restructuring so problems can be worked out while the project contin-ues to operate.

Investors and other partners participating in IFC’s operations are kept regularly informed on project developments. IFC consults or seeks their input as appropriate.

TREASURY SERVICES

IFC funds lending by issuing bonds in international capital markets. We are often the fi rst multilateral institution to issue bonds in the local currencies of emerging markets. Most of IFC’s lending is denomi-nated in U.S. dollars, but we borrow in a variety of currencies to diversify access to funding, reduce borrowing costs, and help develop local capital markets. IFC’s borrowings have con-tinued to keep pace with our lending. New borrowings in the international markets totaled the equivalent of about $12 billion in FY13.

LIQUIDITY MANAGEMENT

Liquid assets on IFC’s balance sheet totaled $30.3 billion as of June 30, 2013, compared with $29.7 billion a year earlier. Most liquid assets are held in U.S. dollars. The exposure arising from assets denominated in currencies other than U.S. dollars is hedged into U.S. dollars to manage currency risk. The level of these assets is determined with a view to ensure suffi cient resources to meet commitments even during times of market stress.

FY13 BORROWING IN INTERNATIONAL MARKETS

Currency

Amount (USD

equivalent) Percent

U.S. dollar 6,597,029,098 55.80%

Australian dollar 1,377,411,350 11.60%

Brazilian real 891,776,917 7.50%

New Zealand dollar 792,480,000 6.70%

Japanese yen 605,262,000 5.10%

Russian ruble 488,293,678 4.10%

Turkish lira 368,637,282 3.10%

New borrow-ings in the international markets totaled the equivalent of about

$12billion in FY13.


CAPITAL ADEQUACY AND FINANCIAL CAPACITY

Sound risk management plays a crucial role in ensuring IFC’s ability to fulfi ll our development mandate. The very nature of IFC’s business, as a long- term investor in dynamic yet volatile emerging markets, exposes us to fi nancial and operational risks.

Prudent risk management and a sound capital position enable us to preserve our fi nancial strength and play a countercyclical role during times of economic and fi nancial turmoil. In addition, IFC’s fi nancial strength results in low borrowing costs, allowing us to provide aff ord-able fi nancing to our clients.

The soundness and quality of IFC’s risk management and fi nancial position can be seen in our triple- A credit rating, which has been main-tained since coverage began in 1989.

We assess IFC’s minimum capital requirement in accordance with our economic capital framework, which is aligned with the Basel framework and leading industry practice. Economic capital acts as a common currency of risk, allowing us to model and aggregate the risk of losses from a range of diff erent investment products as well as other

In FY13, IFC’s debt-to-equity ratio was

2.6:1well within the 4:1 limit prescribed by our fi nancial policies.

risks. Aggregating these risks deter-mines our estimate of the minimum amount of capital that we must hold to retain IFC’s triple- A rating.

IFC’s total resources available consist of paid- in capital, retained earnings net of designations and certain unrealized gains, and total loan- loss reserves. The excess avail-able capital, beyond what is required to support existing business, allows for future growth of our portfolio while also providing a buff er against unexpected external shocks.

As of June 2013, total resources available reached $20.5 billion, while the minimum capital require-ment totaled $16.8 billion. As of June 2013, IFC’s debt- to-equity ratio was 2.6:1, well within the limit of 4:1 pre-scribed by our fi nancial policies.


WORKING RESPONSIBLY

IFC’S APPROACH TO SUSTAINABILITY

Businesses operate in a dynamic landscape. In a time of climate change, resource scarcities, and rising social pressures, envi-ronmental, social, and governance issues are increasingly important for businesses and for our clients.

IFC believes that doing business sus-tainably drives positive development outcomes. Our Sustainability Framework and advice to clients help them fi nd oppor-tunities for growth and innovation. It also promotes sound environmental and social practices, broadens our development impact, and encourages transparency and accountability.

This framework articulates IFC’s strategic commitment to sustainable development and is an integral part of our approach to risk management. It enables us to manage a diverse client base that includes both advisory and investment clients�—� many of which are fi nan-cial intermediaries.

THE IFC PERFORMANCE STANDARDS

At the core of the framework are eight IFC Performance Standards that address a range of environmental and social issues facing the private sector. These standards are designed to help clients avoid, mitigate, and manage risk as a way of doing business sustainably. They help them devise solu-tions that are good for business, good for investors, and good for the environment and communities.

This can include reducing costs through improved energy effi ciency, increasing revenue and market share through envi-ronmentally and socially sound products and services, or forging better stakeholder relations through robust engagement. In situations where the Performance Standards cannot be applied appropri-ately (for example, short- term and trade fi nance), IFC has developed risk- screening tools to achieve the objectives of the Sustainability Framework.

The IFC Performance Standards have become globally recognized as a lead-ing benchmark for environmental and social risk management in the private sector. They are refl ected in the Equator Principles, now used by 76 fi nancial insti-tutions around the world. In addition, other fi nancial institutions also reference IFC’s Performance Standards in their poli-cies�—� including 15 European Development Finance Institutions and 32 Export Credit Agencies from countries belonging to the Organization for Economic Co- operation and Development.

IFC clients continue to indicate that our environmental and social expertise is an important factor in their decision to work with us. Our annual client survey shows that more than 90 percent of the clients that received support from us on environmental and social matters found our assistance to be helpful. They said it helped them improve relationships with stakeholders, strengthen brand value and recognition, and establish sound risk- management practices.

When a project is proposed for fi nancing, IFC conducts a social and envi-ronmental review as part of our overall due diligence. This review takes into account the client’s assessment of the project’s impact and the client’s commit-ment and capacity to manage it. It also assesses whether the project adhered to the IFC Performance Standards. Where there are gaps, we and the client agree on an Environmental and Social Action Plan to ensure that the standards are met over time. We supervise our projects through-out the life of our investment, monitoring client commitments to environmental and social performance.

SUSTAINABILITY IN PRACTICE

IFC believes that sound economic growth, driven by private sector development, is crucial to poverty reduction.

In our investment and advisory activ-ities across the globe, we consider four dimensions of sustainability�—� fi nancial, economic, environmental, and social. Being fi nancially sustainable enables IFC and our clients to work together to make a long- term contribution to development. Making our projects economically sustainable ensures that they can contribute meaning-fully to the host economies.

Ensuring environmental sustainabil-ity in our clients’ operations and supply chains helps protect and conserve natural resources, mitigate environmental degra-dation, and address the global challenge of climate change.

IFC is the fi rst international fi nance institution to comprehensively incorpo-rate the concept of “ecosystem services” in our environmental and social policies. These are naturally occurring services that benefi t people and businesses�—� providing, among other things, food, fresh water, and medicinal plants. They underscore the eco-nomic and societal benefi ts of maintaining a healthy environment.

With climate risk included in the Sustainability Framework, IFC has scaled up the development of climate tools and programs of climate risk assessment and adaptation for clients.

We support social sustainability by working to improve living and working standards, strengthen communities, consult with indigenous peoples, and promote respect for key issues relevant to business and human rights. IFC’s approach to gender is integrated and main-streamed throughout the Performance Standards, refl ecting the expectation that these issues will be general requirements protecting all workers, and reducing risks and impacts to all communities. These


standards recognize the importance of both addressing diff erentiated impacts and ensuring gender- responsive consulta-tion processes.

IFC is committed to ensuring that the benefi ts of economic development are shared with those who are poor or vul-nerable, and that development takes place in a sustainable manner. We also see sus-tainability as an opportunity to transform markets, drive innovation, and add value to our clients by helping them improve their business performance.

CORPORATE GOVERNANCE

Improving corporate governance�—� among our clients and across the private sector in developing countries�—� is a priority for IFC.

We provide advice on good practices for improving board eff ectiveness, strengthen-ing shareholder rights, and enhancing the governance of risk management, internal controls and corporate disclosure. We also advise regulators, stock markets, and oth-ers with an interest in improving corporate governance. We are ramping up our corpo-rate governance programs in underserved areas of the world�—� especially in Africa, Latin America, and South Asia.

Our experience allows IFC to apply global principles to the realities of the private sector in developing countries. As a result, development banks and other investors working in emerging markets now look to IFC for leadership on corpo-rate governance.

We do this in a variety of ways�—� including establishing the IFC Corporate Governance Methodology, a system for evaluating corporate governance risks and opportunities that is recognized as the most advanced of its kind among development fi nance institutions. This methodology is the basis for a common approach to corporate governance now implemented by more than 30 development fi nance institutions working in some of the most challenging markets.

IFC also helps strengthen corporate gov-ernance by developing training materials and institution- building tools and products. This includes tools that can help compa-nies in the areas of corporate governance associations, codes and scorecards, board leadership training, dispute resolution, and the training of business reporters.

Strong corporate governance depends on diversity in board leadership. We strive to increase the number of women who serve as nominee directors on the boards of our clients. Nearly 20 percent of IFC nominee directors are women. We are committed to increasing that share to 30 percent by 2015.

OUR FOOTPRINT COMMITMENT

At IFC, we aim to make sustainability an integral part of our culture and way of doing business. By continually improving our environmental and social performance, we commit to the same standards as we ask of our clients.

IFC took a more global approach to our Footprint Commitment in FY13. For example, electricity use constitutes nearly 30 percent of our global carbon footprint. We invested in a power management system for all networked IFC computers, laptops, and monitors. IFC’s fi rst global electricity reduction initiative is estimated to reduce computer- associated electricity use by a third, with a payback period of just one year.

We also took a global approach to reducing our solid waste footprint. We announced our fi rst global target to reduce paper consumption by 15 percent by FY15.

Our IFC Waste Challenge campaign encouraged over a dozen country offi ces to implement new waste programs, and more than 830 staff from over 65 coun-tries to make personal commitments to reduce waste via an online map, entitled “IFC Pledge.”

IFC headquarters set the fi rst waste target: to reduce overall waste tonnage by 10 percent and to improve its combined recycling/composting rate from 35 per-cent to 85 percent by FY15. A new waste system was implemented, and an interim audit showed we are on track to meet or exceed our FY15 target. In addition, 58,876 pounds of offi ce supplies and fur-niture at headquarters were donated to charitable organizations.

In FY12, carbon emissions from IFC’s global internal business operations totaled about 47,800 metric tons of carbon dioxide equivalent. IFC has collected and reported data on our global carbon foot-print since FY07.

IFC continues to be carbon- neutral for our global corporate operations. To off set our carbon footprint, we purchased car-bon credits from LifeStraw “Carbon for Water”�—� a unique program that distributes water fi lters to low- income communities so they avoid boiling water using wood, which generates greenhouse gases. This project is reaching over 800,000 families, provid-ing 4.5 million people with safe drinking water in rural Kenya while reducing car-bon emissions.

FY12 CARBON EMISSIONS INVENTORY FOR IFC’S GLOBAL BUSINESS OPERATIONSMetric Tons of Carbon Dioxide Equivalent

Business Travel 33,195.94 tCO2e 69%

HQ Offi ce Electricity 7,512.34 tCO2e 16%

Country- Offi ce Electricity 4,703.90 tCO2e 10%

Other 2,404.83 tCO2e 5%

TOTAL EMISSIONS 47,817.02 tCO2e

IFC’s FY12 carbon emissions totaled approximately 47,800 metric tons of carbon dioxide equivalent.(tCO2e), which includes emissions from carbon

dioxide, methane, and nitrous oxide.


OUR ACCESS TO INFORMATION POLICY

As a global institution with opera-tions in many regions and sectors, IFC aff ects a diverse range of stakeholders. Transparency and accountability are fundamental to fulfi lling our develop-ment mandate.

IFC’s Access to Information Policy, which came into eff ect in 2012, improves our ability to communicate our devel-opment impact and how we manage environmental and social risk. This increased transparency about our projects and investments allows for more informed dialogue and feedback.

IFC now discloses information on the environmental, social, and development impact of our projects during all stages of the investment cycle. These requirements, which place a greater emphasis on results reporting, also apply to investments made through fi nancial intermediaries�—� an important and growing area of IFC’s portfolio.

The disclosure of development results for IFC’s investment projects is being phased in by region, with our Latin America and the Caribbean, East Asia and the Pacifi c, and Europe and Central Asia regions beginning disclosure in FY13. All other regions will begin disclosure of development results in 2014. IFC’s advisory services projects, which began disclosing

development impact indicators when the AIP came into eff ect in 2012, will begin dis-playing calendar-year results following the publication of the Annual Report.

Increased transparency regarding investments through fi nancial intermedi-aries includes the periodic disclosure of the list of names, locations, and sectors of high-risk sub- projects supported by IFC’s investments in Private Equity Funds.

IFC’s project- level and Annual Report data sets are now also available on the World Bank Group’s Open Finances platform. This initiative increases the accessibility of IFC’s project and fi nancial information, and enables users to slice and visualize the data as they choose.

While IFC maintains provisions to pro-tect commercially sensitive, deliberative, and confi dential information, stakeholders may now pursue an independent two- stage appeals mechanism to challenge decisions not to disclose particular information.

IFC believes that greater transparency can improve business performance and promote good governance. We believe that over time the changes will result in better project outcomes, increased awareness on the part of aff ected communities, and stronger relationships with stakeholders.

For more information, visit www.ifc.org /disclosure.


Management’s Discussion and Analysis

i. overvieW oF Financial results

International Finance Corporation (IFC or the Corporation) is an international organization, established in 1956, to further economic growth in its developing member countries by promoting private sector development. IFC is a member of the World Bank Group, which also comprises the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID). It is a legal entity separate and distinct from IBRD, IDA, MIGA, and ICSID, with its own Articles of Agreement, share capi-tal, financial structure, management, and staff. Membership in IFC is open only to member countries of IBRD. As of June 30, 2013, IFC’s entire share capital was held by 184 member countries.

IFC helps developing countries achieve sustainable growth by financing private sector investment, mobilizing capital in inter-national financial markets, and providing advisory services to businesses and governments. IFC’s principal investment products are loans and equity investments, with smaller debt securities and guarantee portfolios. IFC also plays an active and direct role in mobilizing additional funding from other investors and lenders through a variety of means. Such means principally comprise: loan participations, parallel loans, sales of loans, the non- IFC portion of structured finance transactions which meet core mobilization criteria, the non- IFC portion of commitments in IFC’s initiatives, and the non- IFC investment portion of commitments in funds man-aged by IFC’s wholly owned subsidiary, IFC Asset Management Company LLC (AMC), (collectively Core Mobilization). Unlike most other development institutions, IFC does not accept host gov-ernment guarantees of its exposures. IFC raises virtually all of the funds for its lending activities through the issuance of debt obliga-tions in the international capital markets, while maintaining a small borrowing window with IBRD. Equity investments are funded from net worth. For the year ended June 30, 2013 (FY13), IFC had an authorized borrowing program of up to $10 billion, and up to $2 billion to allow for possible prefunding during FY13 of the fund-ing program for the year ending June 30, 2014 (FY14). For FY14, IFC has an authorized borrowing program of up to $13.5 billion, and, subject to completion of its FY14 program, up to $2.0 billion to allow for possible prefunding during FY14 of the funding program for the year ending June 30, 2015.

IFC’s capital base and its assets and liabilities, other than its equity investments, are primarily denominated in US dollars. IFC seeks to minimize foreign exchange and interest rate risks by closely matching the currency and rate bases of its assets in various curren-cies with liabilities having the same characteristics. IFC generally manages non- equity investment related and certain lending related residual currency and interest rate risks by utilizing currency and interest rate swaps and other derivative instruments.

The Management’s Discussion and Analysis contains forward looking statements which may be identified by such terms as “antic-ipates,” “believes,” “expects,” “intends,” “plans” or words of similar meaning. Such statements involve a number of assumptions and estimates that are based on current expectations, which are sub-ject to risks and uncertainties beyond IFC’s control. Consequently, actual future results could differ materially from those cur-rently anticipated.

Basis oF preparation oF iFc’s consoliDateD Financial stateMents

The accounting and reporting policies of IFC conform to account-ing principles generally accepted in the United States (US GAAP). IFC’s accounting policies are discussed in more detail in Section VI, Critical Accounting Policies, and in Note A to IFC’s Consolidated Financial Statements as of and for the year ended June 30, 2013 (FY13 Consolidated Financial Statements).

Financial perForMance suMMary

From year to year, IFC’s net income is affected by a number of fac-tors that can result in volatile financial performance. Such factors are detailed more fully in Section VII, Results of Operations.

IFC reported income before net gains and losses on other non- trading financial instruments accounted for at fair value and grants to IDA of $928 million in FY13, as compared to $1,877 million in the year ended June 30, 2012 (FY12) and $2,024 million in the year ended June 30, 2011 (FY11).

The decrease in income before net gains and losses on other non- trading financial instruments accounted for at fair value and grants to IDA in FY13 when compared to FY12 and in FY12 when compared to FY11 was principally as a result of the following (US$ millions):

Increase (decrease)

FY13 vs FY12

Realized capital gains on equity investments $ (1,079)

Provisions for losses on loans, guarantees and other receivables (126)

Foreign currency transaction gains and losses on non- trading activities (110)

Advisory services expenses, net (91)

Expense from pension and other postretirement benefit plans (77)

Unrealized gains on equity investments 154

Income from liquid asset trading activities 187

Other- than-temporary impairments on equity investments 251

Other, net (58)

overall change $ (949)

Increase (decrease)

FY12 vs FY11

Unrealized losses on equity investments $ (582)

Other- than-temporary impairments on equity investments (474)

Income from liquid asset trading activities (216)

Gains on non- monetary exchanges of equity investments (214)


Advisory services expenses, net 132

Foreign currency transaction gains and losses on non- trading activities 178

Realized capital gains on equity investments 1,263

Other, net (77)


Net gains on other non- trading financial instruments accounted for at fair value totaled $422 million in FY13 (net losses of $219 mil-lion in FY12 and net gains of $155 million in FY11) resulting in income before grants to IDA of $1,350 million in FY13, as compared

2 _ IFC FINANCIALS ANd PROjECtS 2013

to $1,658 million in FY12 and $2,179 million in FY11. Grants to IDA totaled $340 million in FY13, as compared to $330 million in FY12 and $600 million in FY11. Net loss attributable to noncon-trolling interests totaled $8 million in FY13 ($0 in FY12 and FY11). Accordingly, net income attributable to IFC totaled $1,018 million

in FY13, as compared with $1,328 million in FY12 and $1,579 mil-lion in FY11.

IFC’s financial performance is detailed more fully in Section VII, Results of Operations.

The table below presents selected financial data for the last five fiscal years (in millions of US dollars, except where otherwise stated):

As of and for the years ended june 30 2013 2012 2011 2010 2009

net income highlights:

Income from loans and guarantees $ 1,059 $ 938 $ 877 $ 801 $ 871

(Provision) release of provision for losses on loans & guarantees (243) (117) 40 (155) (438)

Income (loss) from equity investments 752 1,457 1,464 1,638 (42)

Of which:

Realized gains on equity investments 921 2,000 737 1,290 990

Gains on non- monetary exchanges 6 3 217 28 14

Unrealized gains (losses) on equity investments 26 (128) 454 240 (299)

dividends and profit participations 248 274 280 285 311

Other- than-temporary impairments (441) (692) (218) (203) (1,058)

Fees and other (8) — (6) (2) —

Income from debt securities 5 81 46 108 71

Income from liquid asset trading activities 500 313 529 815 474

Charges on borrowings (220) (181) (140) (163) (488)

Other income

Service fees 101 60 88 70 39

Advisory services income 239 269 — — —

Other 101 119 134 106 114

Other expenses

Administrative expenses (845) (798) (700) (664) (582)

Advisory services expenses (351) (290) (153) (108) (134)

Expense from pension and other postretirement benefit plans (173) (96) (109) (69) (34)

Other (32) (23) (19) (12) (14)

Foreign currency transaction gains (losses) on non- trading activities 35 145 (33) (82) 10

Income (loss) before net gains and losses on other non- trading financial instruments accounted for at fair value and grants to IdA 928 1,877 2,024 2,285 (153)

Net gains (losses) on other non- trading financial instruments 422 (219) 155 (339) 452

Of which:

Realized gains 35 11 63 5 —

Gains on non- monetary exchanges 2 10 22 6 45

Unrealized gains (losses) 385 (240) 70 (350) 407

Income before grants to IdA 1,350 1,658 2,179 1,946 299

Grants to IdA (340) (330) (600) (200) (450)

net income (loss) 1,010 1,328 1,579 1,746 (151)

Less: Net loss attributable to noncontrolling interests 8 — — — —

net income (loss) attributable to iFc $ 1,018 $ 1,328 $ 1,579 $ 1,746 $ (151)

_ 3MANAGEMENt’S dISCUSSION ANd ANALYSIS

As of and for the years ended june 30 2013 2012 2011 2010 2009

consolidated balance sheet highlights:

total assets $ 77,525 $ 75,761 $ 68,490 $ 61,075 $ 51,483

Liquid assets, net of associated derivatives 31,237 29,721 24,517 21,001 17,864

Investments 34,677 31,438 29,934 25,944 22,214

Borrowings outstanding, including fair value adjustments 44,869 44,665 38,211 31,106 25,711

total capital $ 22,275 $ 20,580 $ 20,279 $ 18,359 $ 16,122

Of which:

Undesignated retained earnings $ 18,435 $ 17,373 $ 16,032 $ 14,307 $ 12,251

designated retained earnings 278 322 335 481 791

Capital stock 2,403 2,372 2,369 2,369 2,369

Accumulated other comprehensive income (AOCI) 1,121 513 1,543 1,202 711

Noncontrolling interests 38 — — — —

Financial ratios:1

Return on average assets (GAAP basis)2 1.3% 1.8% 2.4% 3.1% (0.3%)

Return on average assets (non- GAAP basis)3 0.9% 2.8% 1.8% 3.8% (1.1%)

Return on average capital (GAAP basis)4 4.8% 6.5% 8.2% 10.1% (0.9%)

Return on average capital (non- GAAP basis)5 3.1% 9.9% 6.0% 11.8% (3.0%)

Cash and liquid investments as a percentage of next three years’ estimated net cash requirements 77% 77% 83% 71% 75%

External funding liquidity level6 309% 327% 266% 190% 163%

debt to equity ratio7 2.6:1 2.7:1 2.6:1 2.2:1 2.1:1

total reserves against losses on loans to total disbursed portfolio8 7.2% 6.6% 6.6% 7.4% 7.4%

Capital measures:

Capital to risk- weighted assets ratio9 n/a n/a n/a n/a 44%

total Resources Required ($ billions)10 16.8 15.5 14.4 12.8 10.9

total Resources Available ($ billions)11 20.5 19.2 17.9 16.8 14.8

Strategic Capital12 3.8 3.7 3.6 4.0 3.9

deployable Strategic Capital13 1.7 1.8 1.8 2.3 2.3

deployable Strategic Capital as a percentage of total Resources Available 8% 9% 10% 14% 16%

1. Certain financial ratios, as described below, are calculated excluding the effects of unrealized gains and losses on investments, other non- trading financial instruments, AOCI,

and impacts from consolidated Variable Interest Entities (VIEs).

2. Net income for the fiscal year as a percentage of the average of total assets at the end of such fiscal year and the previous fiscal year.

3. Net income excluding unrealized gains and losses on certain investments accounted for at fair value, income from consolidated VIEs, and net gains and losses on non- trading

financial instruments accounted for at fair value, as a percentage of total disbursed loan and equity investments (net of reserves) at cost, liquid assets net of repos, and other

assets averaged for the current period and previous fiscal year.

4. Net income for the fiscal year as a percentage of the average of total capital (excluding payments on account of pending subscriptions) at the end of such fiscal year and the

previous fiscal year.

5. Net income excluding unrealized gains and losses on certain investments accounted for at fair value, income from consolidated VIEs, and net gains and losses on non- trading

financial instruments accounted for at fair value, as a percentage of paid-in share capital and retained earnings (before certain unrealized gains and losses and excluding

cumulative designations not yet expensed) averaged for the current period and previous fiscal year.

6. IFC’s objective is to maintain a minimum level of liquidity, consisting of proceeds from external funding to cover at least 65% of the sum of (i) 100% of committed but

undisbursed straight senior loans; (ii) 30% of committed guarantees; and (iii) 30% of committed client risk management products. As of FY13 Q3, IFC’s management decided to

modify the External Funding Policy by eliminating the cap on the operational range of 65% to 85%.

7. Leverage (debt/equity) ratio is defined as the number of times outstanding borrowings plus outstanding guarantees cover paid- in capital and accumulated earnings (net of

retained earnings designations and certain unrealized gains/losses).

8. total reserves against losses on loans to total disbursed loan portfolio is defined as reserve against losses on loans as a percentage of the total disbursed loan portfolio at the

end of the fiscal year.

9. the ratio of capital (including paid- in capital, retained earnings, and portfolio (general) loan loss reserves) to risk- weighted assets, both on- and off- balance sheet. the ratio does

not include designated retained earnings reported in total capital on IFC’s consolidated balance sheet. the Board of directors has approved the use of a risk- based economic

capital framework beginning in the year ended june 30, 2008 (FY08). Parallel use of the capital to risk- weighted assets ratio has now been discontinued.

10. the minimum capital required consistent with the maintenance of IFC’s AAA rating. It is computed as the aggregation of risk- based economic capital requirements for each

asset class across the Corporation.

11. Paid-in capital plus retained earnings net of designated retained earnings plus general and specific reserves against losses on loans. this is the level of available resources under

IFC’s risk- based economic capital adequacy framework.

12. total resources available less total resources required.

13. 90% of total resources available less total resources required.


ii. client services

Business overvieW

IFC fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments.

IFC has five strategic focus areas: » strengthening the focus on frontier markets » addressing climate change and ensuring environmental and social sustainability » addressing constraints to private sector growth in infrastructure, health, education, and the food- supply chain » developing local financial markets » building long- term client relationships in emerging markets

For all new investments, IFC articulates the expected impact on sustainable development, and, as the projects mature, IFC assesses the quality of the development benefits realized.

IFC’s strategic focus areas are aligned to advance the World Bank Group’s global priorities.

IFC’s three businesses are: Investment Services, Advisory Ser-vices, and Asset Management.

investMent services

IFC’s investments are normally made in its developing member countries. The Articles of Agreement mandate that IFC shall invest in productive private enterprise. The requirement for private own-ership does not disqualify enterprises that are partly owned by the public sector if such enterprises are organized under local commer-cial and corporate law, operate free of host government control in a market context and according to profitability criteria, and/or are in the process of being totally or partially privatized.

IFC provides a range of financial products and services to its clients to promote sustainable enterprises, encourage entrepre-neurship, and mobilize resources that wouldn’t otherwise be available. IFC’s financing products are tailored to meet the needs of each project. Investment Services product lines include: loans, equity investments, trade finance, loan participations, structured finance, client risk management services, and blended finance.

IFC’s investment project cycle can be divided into the follow-ing stages:

» Business Development » Concept Review » Appraisal (Due Diligence) » Investment Review » Negotiations » Public Disclosure » Board of Directors Review and Approval » Commitment » Disbursement of funds » Project Supervision and Development Outcome Tracking » Evaluation » Closing

IFC carefully supervises its projects to monitor project perfor-mance and compliance with contractual obligations and with IFC’s internal policies and procedures.

investment products

Loans — IFC finances projects and companies through loans, typically for seven to twelve years. IFC also makes loans to inter-mediary banks, leasing companies, and other financial institutions for on- lending. IFC’s loans traditionally have been denominated in the currencies of major industrial nations, but has a growing local currency product line.

Equity — IFC’s equity investments provide developmental sup-port and long- term growth capital for private enterprises, and opportunities to support corporate governance and enhanced social responsibility. IFC invests directly in companies’ equity, and also through private equity funds. IFC generally invests between 5 and 20 percent of a company’s equity. IFC also invests in preferred shares and uses put and call options, profit participation features, conversion features, warrants and other types of instruments in managing its equity investments.

Debt Securities — Investments typically in the form of bonds and notes issued in bearer or registered form, securitized debt obli-gations and preferred shares that are mandatorily redeemable by the issuer or puttable by IFC are classified as debt securities in IFC’s consolidated balance sheet.

Trade and Supply Chain Finance — IFC’s Global Trade Finance Program (GTFP) guarantees trade- related payment obligations of approved financial institutions. Separately, the Global Trade Liquidity Program (GTLP) and Critical Commodities Finance Program (CCFP) provides liquidity for trade in developing coun-tries. IFC has also commenced a number of other Trade and Supply Chain Finance- related programs, including Global Trade Supplier Finance, Global Warehouse Finance Program, Working Capital and Systemic Solutions and Global Trade Structured Trade.

Loan Participations — IFC’s loan participation program mobi-lizes capital from international commercial banks, emerging market banks, funds, insurance companies, and development- finance insti-tutions for development needs.

Structured Finance — IFC uses structured and securitized products to provide forms of financing that may not otherwise be available to clients to help clients diversify funding, extend maturities, and obtain financing in particular currencies. Products include partial credit guarantees, structured liquidity facilities, portfolio risk transfer, securitizations, and Islamic finance.

Client Risk Management Services — IFC provides derivative products to its clients to allow them to hedge their interest rate, cur-rency, or commodity- price exposures. IFC intermediates between clients in developing countries and derivatives market makers to provide such clients with access to risk- management products.

Blended Finance — IFC combines concessional funds, typ-ically from donor partners, with IFC’s resources to finance certain projects.


aDvisory services

Advisory Services are recognized as a key part of the Corporation’s mandate, and have grown to become an increasingly important tool for delivering on IFC’s mission. Advisory Services play a crucial role in helping government clients create an effective enabling environ-ment for private investment, while strengthening the capacity and know- how of private sector clients — thereby extending IFC’s reach into challenging markets.

IFC’s Advisory Services are organized into four business lines:Access to finance — Works with financial intermediaries to

expand access to financial services. Provides advice on small and medium enterprises (SMEs) and micro/retail finance solutions, as well as enabling financial infrastructure.

Investment climate — Works with governments to create an enabling environment to increase the role of private sector growth and development. Provides advice on business regulation and tax-ation, investment policies, as well as industry- specific investment climate reform.

Public- private partnerships — Works to help governments design and implement public- private partnerships (PPPs) in infra-structure and other basic public services. Provides advice on preparing and structuring of PPP mandates.

Sustainable business — Works with companies and their supply chains to promote adoption of, and catalyze investment in, sound environmental, social and governance practices and technologies that create a competitive edge.

Around half of IFC’s advisory projects work with government clients to help unlock investment opportunities for IFC and oth-ers — as is the case when IFC assists governments to improve the investment climate or to design and implement PPPs, complement-ing the work of IBRD and the International Monetary Fund. The other half of advisory projects involves work with private sector clients to build capacity or demonstrate the business case for desir-able business practices. Investment Services and Advisory Services may be offered either in tandem or sequentially. Examples include microfinance, SME banking, energy efficiency financing, corporate governance, or supply chain development in the agricultural sector.

Advisory Services make a substantial contribution to IFC’s shared corporate priorities. Advisory Services are often IFC’s first offering in new or challenging markets. Advisory Services have continuously strengthened their alignment and deepened their synergies with investment operations, particularly with regards to Fragile & Conflict Situations, Climate Change, SMEs, Agribusiness and Infrastructure, with gender as a cross- cutting priority.

asset ManageMent coMpany

AMC, a wholly- owned subsidiary of IFC, invests third- party capital and IFC capital, enabling outside investors to benefit from IFC’s expertise in achieving strong equity returns, as well as positive development impact in the countries in which it invests in devel-oping and frontier markets. Investors in funds managed by AMC include sovereign wealth funds, national pension funds, multilat-eral and bilateral development institutions, national development agencies and international financial institutions. AMC helps IFC mobilize additional capital resources for investment in productive private enterprise in developing countries.

At June 30, 2013, AMC managed seven funds, with $5.5 billion under management: the IFC Capitalization (Equity) Fund, L.P. (Equity Capitalization Fund); the IFC Capitalization (Subordinated Debt) Fund, L.P. (Sub- Debt Capitalization Fund); the IFC African, Latin American and Caribbean Fund, LP (ALAC Fund); the Africa Capitalization Fund, Ltd. (Africa Capitalization Fund); the IFC Russian Bank Capitalization Fund, LP (Russian Bank Cap Fund); the IFC Catalyst Fund, LP and the IFC Catalyst Fund (UK), LP (col-lectively, Catalyst funds); and the IFC Global Infrastructure Fund, LP (Global Infrastructure Fund). The Equity Capitalization Fund and the Sub- Debt Capitalization Fund are collectively referred to as the Global Capitalization Fund.

The Global Capitalization Fund, established in the year ended June 30, 2009 (FY09), helps strengthen systemically important banks in emerging markets.

The ALAC Fund was established in FY10. The ALAC Fund invests in equity investments across a range of sectors in Sub- Saharan Africa, Latin America, and the Caribbean.

The Africa Capitalization Fund was established in FY10 to cap-italize systemically important commercial banking institutions in northern and Sub- Saharan Africa.

The Russian Bank Cap Fund was established in FY12 to invest in mid- sized, commercial banks in Russia that are either: (i) privately owned and controlled; or (ii) state- owned; or (iii) controlled and on a clear path to privatization.

The Catalyst Funds were established in FY13 to make invest-ments in selected climate- and resource efficiency- focused private equity funds in emerging markets.

The Global Infrastructure Fund was established in FY13 to focus on making equity and equity- related investments in the infrastruc-ture sector in global emerging markets.


investMent prograM

commitments

In FY13, total commitments were $24,853 million, compared with $20,358 million in FY12, an increase of 22%, of which IFC com-mitments totaled $18,349 million ($15,462 million — FY12) and Core Mobilization totaled $6,504 million ($4,896 million — FY12).

FY13 and FY12 commitments and Core Mobilization comprised the following (US$ millions):

Fy13 FY12

total commitments1 $ 24,853 $ 20,358

iFc commitments

Loans $ 8,520 $ 6,668

Equity investments 2,732 2,282

Guarantees:

Global trade Finance Program 6,477 6,004

Other 482 398

Client risk management 138 110

total iFc commitments $ 18,349 $ 15,462

core Mobilization

loan participations, parallel loans, and other mobilization

Loan participations $ 1,829 $ 1,764

Parallel loans 1,269 927

Other mobilization 480 814

total loan participations, parallel loans and other mobilization $ 3,578 $ 3,505

aMc

Equity Capitalization Fund $ 214 $ 24

Sub- debt Capitalization Fund 209 215

ALAC Fund 210 190

Africa Capitalization Fund 92 8

Russian Bank Cap Fund 43 —

total aMc $ 768 $ 437

other initiatives

Global trade Liquidity Program and Critical Commodities Finance Program $ 1,096 $ 850

Public Private Partnership (PPP) 942 41

Infrastructure Crisis Facility 110 63

debt & Asset Recovery Program 10 —

total other initiatives $ 2,158 $ 954

total core Mobilization $ 6,504 $ 4,896

core Mobilization ratio 0.35 0.32

1. debt security commitments are included in loans and equity investments based on

their predominant characteristics.

Disbursements

IFC disbursed $10,012 million for its own account in FY13 ($7,981 million in FY12): $6,940 million of loans ($5,651 million in FY12), $2,549 million of equity investments ($1,810 million in FY12), including $42 million attributable to noncontrolling interest ($0 in FY12), and $523 million of debt securities ($520 million in FY12).

Disbursed investment portfolio

IFC’s total disbursed investment portfolio (a non- US GAAP performance measure) was $33,885 million at June 30, 2013 ($30,700 million at June 30, 2012), comprising the disbursed loan portfolio of $22,606 million ($21,043 million at June 30, 2012), the disbursed equity portfolio of $9,209 million ($7,547 million at June 30, 2012), and the disbursed debt security portfolio of $2,070 million ($2,110 million at June 30, 2012).

IFC’s disbursed investment portfolio is diversified by industry sector and geographic region with a focus on strategic high develop-ment impact sectors such as financial markets and infrastructure.

The carrying value of IFC’s investment portfolio comprises: (i) the disbursed investment portfolio; (ii) reserves against losses on loans; (iii) unamortized deferred loan origination fees, net and other; (iv) disbursed amount allocated to a related financial instrument reported separately in other assets or derivative assets; (v) unrealized gains and losses on equity investments held by con-solidated variable interest entities; (vi) unrealized gains and losses on investments accounted for at fair value as available- for-sale; and (vii) unrealized gains and losses on investments.


The following charts show the distribution of the disbursed investment portfolio by geographical region and industry sector as of June 30, 2013, and June 30, 2012:

Distribution by region

FY13

Latin America and Caribbean

Asia



Sub-Saharan Africa

Other

FY12

Latin America and Caribbean


Asia


Sub-Saharan Africa

Other

Distribution by industry sector

Finance and Insurance

Electric Power

Collective Investment Vehicles

Oil, Gas, and Mining

transportation and Warehousing

Agriculture and Forestry

Chemicals

Information

Nonmetallic Mineral Product Manufacturing

Industrial and Consumer Products

Food and Beverages

Health Care

Utilities

Construction and Real Estate

Wholesale and Retail trade

Primary Metals

Accommodation and tourism Services

Education Services

Pulp and Paper

textiles, Apparel and Leather

Other

Percentage

FY12 FY13

0 5 10 15 20 25 30 35 40


Disbursed loan participations

The portfolio of disbursed and outstanding loan participations, which are serviced by IFC at June 30, 2013, totaled $6,621 million, as compared with $6,463 million at June 30, 2012.

Additional information on IFC’s investment portfolio as of and for the years ended June 30, 2013, and June 30, 2012, can be found in Notes B, D, E, F, G, H and I to IFC’s FY13 Consolidated Financial Statements.

loans

Loans generally have the following characteristics:Term — typically amortizing with final maturities generally for

seven to twelve years, although some loans have been made for ten-ors as long as 20 years

Currency — primarily in major convertible currencies, princi-pally US dollar, and to a lesser extent, Euro, but with a growing local currency loan portfolio

Interest rate — typically variable (or fixed and swapped into variable)

Pricing — reflects such factors as market conditions and country and project risks

IFC’s loans traditionally have been made in major currencies, based on client demand and on IFC’s ability to economically hedge loans in these currencies through the use of mechanisms such as cross- currency swaps or forward contracts. Fixed- rate loans and loans in currencies other than US dollars are normally economically hedged using currency and/or interest rate swaps, into US dollar variable rate assets.

Loans traditionally have been denominated in the currencies of major industrial nations, but IFC has a growing portfolio of local currency products. IFC typically offers local currency products in other currencies where it can economically hedge the local currency loan cash flows back into US dollars using swap markets or where it can fund itself in local bond markets. IFC’s disbursed loan port-folio at June 30, 2013 includes $2,633 million of currency products denominated in Indian rupee, Mexican peso, Chinese renminbi, Philippine pesos, Russian ruble, South African rand, Brazilian reais, Indonesian rupiah, Colombian pesos, Turkish lira and Vietnamese dong ($2,314 million at June 30, 2012). IFC has also made loans in a number of frontier market currencies such as Tunisian dinar, Paraguayan guarani, Rwandan franc, and Zambian kwacha.

IFC’s disbursed loan portfolio totaled $22,606 million at June 30, 2013 ($21,043 million at June 30, 2012). The carrying amount of IFC’s loan portfolio on IFC’s consolidated balance sheet (comprising the disbursed loan portfolio together with adjustments as detailed in Note D to IFC’s FY13 Consolidated Financial Statements) grew 7% to $20,831 million at June 30, 2013 ($19,496 million at June 30, 2012).

Loans comprise 67% of the disbursed investment portfolio as of June 30, 2013 (68% at June 30, 2012) and 60% of the carrying amount of the investment portfolio as of June 30, 2013 (62% at June 30, 2012).

At June 30, 2013, 74% (74% at June 30, 2012) of IFC’s disbursed loan portfolio was US dollar- denominated.

The currency position of the disbursed loan portfolio at June 30, 2013 and June 30, 2012 is shown below:

currencies

US dollars

Euro

Chinese renminbi

Indian rupees

Mexican pesos

Philippine pesos

Brazilian reais

South African rand

Russian rubles

Indonesian rupiah

Colombian pesos

turkish lira

Other

FY12 FY13

equity investments

IFC’s equity investments are typically in the form of common or preferred stock which is not mandatorily redeemable by the issuer or puttable to the issuer by IFC and are usually denominated in the currency of the country in which the investment is made.

IFC’s disbursed equity portfolio totaled $9,209 million at June 30, 2013 ($7,547 million at June 30, 2012), an increase of 22%.

The carrying amount of IFC’s equity investment portfolio (com-prising the disbursed equity portfolio, together with adjustments as detailed in Note D to IFC’s FY13 Consolidated Financial Statements), grew 20% to $11,695 million at June 30, 2013 ($9,774 million at June 30, 2012).

The fair value of IFC’s equity portfolio2 was $14,654 million at June 30, 2013 ($12,985 million at June 30, 2012).

Equity investments accounted for 27% of IFC’s disbursed invest-ment portfolio at June 30, 2013, compared with 25% at June 30, 2012 and 34% of the carrying amount of the investment portfolio at June 30, 2013 (31% at June 30, 2012).

Debt securities

Debt securities are typically in the form of bonds and notes issued in bearer or registered form, securitized debt obligations (e.g. asset- backed securities (ABS), mortgage- backed securities (MBS), and other collateralized debt obligations) and preferred shares that are mandatorily redeemable by the issuer or puttable to the issuer by IFC.

2. Including “equity- like” securities classified as debt securities in IFC’s consolidated

balance sheet and equity- related options.

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000


IFC’s disbursed debt securities portfolio totaled $2,070 million at June 30, 2013 ($2,110 million at June 30, 2012).

The carrying amount of IFC’s debt securities portfolio (com-prising the disbursed debt securities portfolio, together with adjustments as detailed in Note D to IFC’s FY13 Consolidated Financial Statements), was $2,151 million at June 30, 2013 ($2,168 million at June 30, 2012).

Debt securities accounted for 6% of IFC’s disbursed investment portfolio at June 30, 2013 (7% at June 30, 2012) and 6% of the car-rying amount of the investment portfolio at June 30, 2013 (7% at June 30, 2012).

guarantees

GLOBAL TRADE FINANCE PROGRAMFY13 commitments include $6,477 million ($6,004 million — FY12) relating to GTFP.

GUARANTEES AND PARTIAL CREDIT GUARANTEESIFC offers partial credit guarantees to clients covering, on a risk- sharing basis, client obligations on bonds and/or loans. IFC’s guarantee is available for debt instruments and trade obligations of clients and covers commercial as well as noncommercial risks. IFC will provide local currency guarantees, but when a guarantee is called, the client will generally be obligated to reimburse IFC in US dollar terms. Guarantee fees are consistent with IFC’s loan pric-ing policies. FY13 commitments include $482 million of guarantees ($398 million — FY12).

client risk Management products

IFC provides derivative products to its clients to allow them to hedge their interest rate, currency or commodity price exposures. IFC intermediates between its developing country clients and derivatives market makers in order to provide IFC’s clients with full market access to risk management products. FY13 commitments included $138 million of such products ($110 million — FY12).

core Mobilization

Core Mobilization is financing from entities other than IFC that becomes available to clients due to IFC’s direct involvement in

raising resources. IFC finances only a portion, usually not more than 25%, of the cost of any project. All IFC- financed projects, therefore, require other financial partners. IFC mobilizes such private sector finance from other entities through loan participations, parallel loans, partial credit guarantees, securitizations, loan sales, and risk sharing facilities. In FY09, IFC launched AMC and a number of other initiatives, each with a formally approved Core Mobilization component, and revised its mobilization resources definition accordingly to include these in the measure. In FY12, IFC expanded the Core Mobilization definition to account for third party financing made available for PPP projects due to IFC’s mandated lead advisor role to national, local government or other government entity. The components of Core Mobilization are as follows:

LOAN PARTICIPATIONSThe principal direct means by which IFC mobilizes private sector finance is through the sale of participations in its loans. Through the loan participation program, IFC has worked primarily with commercial banks but also with nonbank financial institutions in financing projects since the early 1960s.

Whenever it participates a loan, IFC will always make a loan for its own account, thereby sharing the risk alongside its loan partic-ipants. IFC acts as the lender of record and is responsible for the administration of the entire loan, including the loan participation. IFC charges fees to the borrower at prevailing market rates to cover the cost of the loan participation.

Loan participation commitments were $1,829 million in FY13 ($1,764 million in FY12).

PARALLEL LOANSLoans from other financial institutions that IFC helped arrange for clients and received a fee, but for which IFC is not the lender of record, in FY13 were $1,269 million ($927 million in FY12).

OTHER MOBILIZATIONOther case- by-case mobilization decisions totaled $480 million in FY13 ($814 million in FY12).


AMCThe activities of the funds managed by AMC at June 30, 2013 and June 30, 2012 can be summarized as follows (US$ millions unless other-wise indicated):

Equity Capitalization

Fund

Sub- debt Capitalization

Fund ALAC Fund

Africa Capitalization

Fund

Russian Bank Cap

FundCatalyst

Funds

Global Infrastructure

Fund total

Assets under management as of june 30, 2013 $ 1,275 $ 1,725 $ 1,000 $ 182 $ 550 $ 282 $ 500 $ 5,514

From IFC 775 225 200 — 250 75 100 1,625

From other investors 500 1,500 800 182 300 207 400 3,889

For the year ended june 30, 2013

Fund Commitments to Investees:

From IFC 332 31 52 — 35 — — 450

From other investors 214 209 210 92 43 — — 768

disbursements from investors to Fund:

From IFC 336 33 63 — 38 1 1 472

From other investors 217 223 252 94 46 2 3 837

disbursements made by Fund 546 249 297 91 78 — — 1,261

disbursements made by Fund (number) 7 5 12 4 2 — — 30

Equity Capitalization

Fund

Sub- debt Capitalization

Fund ALAC Fund

Africa Capitalization

Fund

Russian Bank Cap

FundCatalyst

Funds


Fund total

Assets under management as of june 30, 2012 $ 1,275 $ 1,725 $ 1,000 $ 182 $ 275 $ — $ — $ 4,457

From IFC 775 225 200 — 125 — — 1,325

From other investors 500 1,500 800 182 150 — — 3,132

For the year ended june 30, 2012

Fund Commitments to Investees:

From IFC 36 32 48 — — — — 116

From other investors 24 215 190 8 — — — 437

disbursements from investors to Fund:

From IFC 62 28 52 — — — — 142

From other investors 40 186 208 14 — — — 448

disbursements made by Fund 97 208 174 11 — — — 490

disbursements made by Fund (number) 6 2 8 3 — — — 19

OTHER INITIATIVES

GTLP and CCFPIFC’s FY13 Core Mobilization included $1,096 million ($850 mil-lion — FY12) relating to GTLP and CCFP.

Infrastructure Crisis FacilityThe infrastructure crisis facility is a facility that includes debt and equity components and provides short- to medium- term financing for infrastructure projects. It also includes advisory services to help governments design or redesign public- private-partnership proj-ects. FY13 Core Mobilization includes $110 million relating to the Infrastructure Crisis Facility ($63 million — FY12).

PPP MobilizationFY13 resources mobilized includes $942 million relating to PPP Mobilization, which is the non- IFC, non- government portion of financing made available for PPP projects due to IFC’s mandated lead advisor role to national/local government or other government entity ($41 million — FY12).

core Mobilization ratio

The Core Mobilization ratio is defined as:

Loan participations + parallel loans + sales of loans and other mobilization + non- IFC investment part of structured finance

which meets core mobilization criteria + non- IFC commitments in Initiatives + non- IFC investments committed in funds managed

by AMC + PPP Mobilization

Commitments (IFC investments + IFC portion of structured finance + IFC commitments in new Initiatives + IFC investments

committed in funds managed by AMC)

For each dollar that IFC committed, IFC mobilized (in the form of loan participations, parallel loans, other mobilization, the non- IFC portion of structured finance and the non- IFC commitments in Initiatives, and the non- IFC investments committed in funds managed by AMC) $0.35 in FY13 ($0.32 in FY12).


aDvisory services

The IFC Advisory Services Portfolio as of June 30, 2013 totaled $1,037 million, as compared to $894 million as of June 30, 2012.

The Advisory Services program with clients grew to $232 million in FY13, up from $197 million in FY12, with continued focus on stra-tegic priority areas, including IDA, fragile situations and climate change. In FY13 the Advisory Services program grew in each of these areas.

The largest regional advisory program in FY13 was in Sub Saharan Africa ($65 million), comprising, 28% of the total Advisory Services program, followed by East Asia and the Pacific ($39 mil-lion; 17%), Europe and Central Asia ($36 million; 16%), South Asia ($34 million; 14%) and others regions ($58 million; 25%). Program

focus by business line shows that the largest program was in Investment Climate ($75 million; 32%), followed by Access to Finance ($63 million; 27%), Sustainable Business ($55 million; 24%) and Public Private Partnerships ($39 million; 17%).

In FY13, the Advisory Services program in IDA countries grew by 17% to $142 million, or 65% of the total Advisory Services pro-gram. The program in Fragile and Conflict Situations grew by 18% to $39 million (18% of the total Advisory Services program). Engagements in climate change increased almost 80% to $53 mil-lion (24% of the total Advisory Services program).

Program results continue to show a positive trend. Development effectiveness ratings of the projects reached a record 76% success rate in FY13, up from 72% in FY12. Likewise, client satisfaction reached a record of 90%, up from 88% in FY12.

iii. liQuiD assets

IFC invests its liquid assets portfolio in highly rated fixed and floating rate instruments issued by, or unconditionally guaranteed by, govern-ments, government agencies and instrumentalities, multilateral organizations, and high quality corporate issuers; these include ABS and MBS, time deposits, and other unconditional obligations of banks and financial institutions. Diversification in multiple dimensions ensures a favorable risk return profile. IFC manages the market risk associated with these investments through a variety of hedging techniques including derivatives, principally currency and interest rate swaps and financial futures. IFC’s liquid assets are invested in seven separate portfolios, internally named P0 through P4, P6 and P7. All seven portfolios are accounted for as trading portfolios. IFC’s liquid assets port-folio is summarized as follows:

PortfolioFair Value ($ Billions)* Comprising Managed by Invested In Benchmark

P0 $1.7($0.5)

Proceeds from discount note program and cash inflows from investment operations

IFC’s treasury department

Money market instruments Overnight US dollar London Interbank Bid Rate (LIBId)

P1 $22.5($21.9)

Proceeds from market borrowings invested pending disbursement of operational loans


Principally global government bonds, ABS, bank deposits, and high quality corporate bonds generally swapped into 3-month US dollar LIBOR

Custom- created index of a series of six, equally weighted 6-month LIBId deposits that mature on the 15th of each month — average life of 3 months**

P2 $4.4($5.6)

Primarily IFC’s paid- in capital and accumulated earnings that have not been invested in equity and quasi- equity investments


US treasuries, ABS, and other sovereign and agency issues

Lehman Brothers US 1–3 year maturity treasury Index***

P3 $0.9($0.9)

An outsourced portion of the P1 portfolio

External managers appointed by IFC

Global government bonds and other high quality corporate bonds as well as mortgage- backed securities

Same as for P1

P4 $0.8($0.8)

An outsourced portion of the P2 portfolio

External managers appointed by IFC

Global government bonds, and other high quality corporate bonds as well as mortgage- backed securities

Same as for P2

P6 $0.9($0.7)

the proceeds of liquidity raised in local currency prior to disbursement


Short- term money market instruments denominated in South African rand, turkish lira, Polish zloty, Russian rubles, Mexican pesos and Brazilian reais

Local interbank rate indices

total $31.2($30.4)

* at june 30, 2013 (june 30, 2012)

** the net duration of the P1 and P3 benchmarks is approximately 0.25 years.

*** the net duration of the P2 and P4 benchmark is 1.9 years.

The P7 portfolio was created in FY10, and, prior to FY13, con-tained the after- swap proceeds from variable- rate borrowings denominated and invested in Euros. In FY13, IFC invested part of the proceeds of a Nigeria naira borrowing in the P7 portfolio. The P7 portfolio was $31 million at June 30, 2013.

IFC has a flexible approach to managing the liquid assets portfo-lios by making investments on an aggregate portfolio basis against its benchmark within specified risk parameters. In implementing

these portfolio management strategies, IFC utilizes derivative instruments, including futures and options, and takes positions in various industry sectors and countries.

All liquid assets are managed according to an investment author-ity approved by the Board of Directors and liquid asset investment guidelines approved by IFC’s Corporate Risk Committee, a subcom-mittee of IFC’s Management Team.


iv. FunDing resources

IFC’s funding resources (comprising borrowings, capital and retained earnings) as of June 30, 2013 and June 30, 2012 are as follows:

FY13

Borrowings from market sources

Retained earnings

Paid-in capital

Discount Note Program

Borrowings from IBRD

FY12

Borrowings from market sources

Retained earnings

Paid-in capital


Borrowings from IBRD

BorroWings

The major source of IFC’s borrowings is the international capi-tal markets. Under the Articles of Agreement, IFC may borrow in the public markets of a member country only with approvals from that member, together with the member in whose currency the borrowing is denominated. IFC borrowed (after the effect of borrowing- related derivatives) $12.8 billion during FY13 ($11.9 bil-lion in FY12 and $10.3 billion in FY11). In addition, the Board of Directors has authorized the repurchase and/or redemption of debt obligations issued by IFC, which enhances the liquidity of IFC’s borrowings. During FY13, IFC repurchased and retired $0.4 billion of outstanding debt ($0.6 billion in FY12 and $0.3 billion in FY11), generating gains on buybacks of $11 million in FY13 ($19 million — FY12 and $10 million — FY11).

IFC diversifies its borrowings by currency, country, source, and maturity to provide flexibility and cost- effectiveness. IFC also has a developmental role in helping open up new domestic markets to foreign issuers in its member countries. In FY13 IFC borrowed in fourteen currencies and in final maturities ranging from one to 30 years. Outstanding market borrowings have remaining matur-ities ranging from less than one year to approximately 30 years, with a weighted average remaining contractual maturity of 4.1 years at June 30, 2013 (5.5 years at June 30, 2012). Actual maturities may dif-fer from contractual maturities due to the existence of call features in certain of IFC’s borrowings.

Market borrowings are generally swapped into floating- rate obligations denominated in US dollars. As of June 30, 2013, IFC had gross payables from borrowing- related currency swaps of $18.7 billion ($18.3 billion at June 30, 2012) and from borrowing- related interest rate swaps in the notional principal payable amount of $37.8 billion ($35.2 billion at June 30, 2012). After the effect of these derivative instruments is taken into consideration, 99% of IFC’s market borrowings at June 30, 2013 were variable rate US dollar- denominated (99% — June 30, 2012).

IFC’s mandate to help develop domestic capital markets can result in raising local currency funds. As of June 30, 2013, $0.5 bil-lion of such non- US$-denominated market borrowings were outstanding, denominated in C.F.A. francs, Chinese renminbi, Dominican pesos, Nigerian naira, and Russian rubles. Proceeds of such borrowings were invested in such local currencies, onlent to clients and/or partially swapped into US dollars.

The weighted average cost of market borrowings after currency and interest rate swap transactions was 0.4% at June 30, 2013 (0.7% at June 30, 2012).

Prior to FY13, IFC had a short term US$ discount note pro-gram to provide an additional funding and liquidity management tool for IFC in support of certain of IFC’s trade finance and supply chain initiatives. Beginning in FY13, IFC launched a short term CNY discount note program to complement the US$ program and to expand the availability of short- term local currency finance for private enterprises in CNY. The discount note program pro-vides for issuances with maturities ranging from overnight to one year. At June 30, 2013, $1.1 billion ($1.4 billion — June 30 2012).and $0.2 billion ($0 — June 30, 2012) were outstanding under the US$ and CNY short- term discount note programs, respectively.

capital anD retaineD earnings

As of June 30, 2013, IFC’s authorized capital was $2.58 billion ($2.58 billion — June 30, 2012), of which $2.40 billion was sub-scribed and paid in at June 30, 2013 ($2.37 billion at June 30, 2012).

As of June 30, 2013, IFC’s total capital as reported in IFC’s con-solidated balance sheet amounted to $22.28 billion, up from the June 30, 2012 level of $20.58 billion. At June 30, 2013, total capital comprised $2.40 billion of paid- in capital, up from $2.37 billion at June 30, 2012, $18.71 billion of retained earnings ($17.70 billion at June 30, 2012), and $1.12 billion of accumulated other comprehen-sive income ($0.51 billion at June 30, 2012).

Noncontrolling interests totaled $0.05 billion at June 30, 2013 ($0 — June 30, 2012).

selective capital increase (sci)

On July 20, 2010, the Board of Directors recommended that the Board of Governors approve an increase in the authorized share capital of IFC of $130 million, to $2,580 million, and through the issuance of $200 million of shares (including $70 million of unallocated shares). The Board of Directors also recommended that the Board of Governors approve an increase in Basic Votes aimed at enhancing the voice and participation of developing and transition countries (DTCs) and requiring an amendment to IFC’s Articles of Agreement.

The resolution recommended by the Board of Directors was adopted by the Board of Governors on March 9, 2012. The amend-ment to the Articles of Agreement and the increase in the authorized share capital have become effective on June 27, 2012. As of the same date, eligible members have been authorized to subscribe to their allocated IFC shares. The subscription period will end on June 27, 2014 and payment of subscribed shares must occur no later than June 27, 2015. During the year ended FY13, IFC received $31 million of capital subscriptions related to the SCI.


Designations of retained earnings

Beginning in the year ended June 30, 2004, IFC began a process of designating retained earnings to increase its support of advisory services and, subsequently, for performance- based grants (PBG) (year ended June 30, 2005), grants to IDA (year ended June 30, 2006 (FY06)), the Global Infrastructure Project Development Fund (FY08), and IFC SME Ventures for IDA Countries (FY08). The lev-els and purposes of retained earnings designations are set based on the Board of Directors- approved principles, which are applied each year to assess IFC’s financial capacity and to determine the maximum levels of retained earnings designations.

Amounts available to be designated are determined based on a Board of Directors- approved income- based formula and, beginning in FY08, on a principles- based Board of Directors- approved finan-cial distribution policy, and are approved by the Board of Directors.

IFC recognizes designations of retained earnings for advisory services when the Board of Directors approves it and recognizes designation of retained earnings for grants to IDA when it is noted with approval by the Board of Governors.

Expenditures for the various approved designations are recorded as expenses in IFC’s consolidated income statement in the year in which they occur, and have the effect of reducing retained earnings designated for this specific purpose.

Fy12 Designations

On August 9, 2012, the Board of Directors approved the designation of $340 million of IFC’s retained earnings for grants to IDA and a designation of $80 million of IFC’s retained earnings for advisory services. On October 12, 2012, the Board of Governors noted with approval these designations.

On January 15, 2013, IFC recognized expenditures against grants to IDA of $340 million on signing of a grant agreement between IDA and IFC concerning the transfer to IDA and use of funds corresponding to the aforementioned paragraph. IFC recognized expenditures for advisory services and expenditures against other designated retained earnings totaling $124 million, compared to $82 million in FY12.

At June 30, 2013, retained earnings comprised $18,435 million of undesignated retained earnings ($17,373 million at June 30, 2012; and $16,032 million at June 30, 2011), $199 million of retained earn-ings designated for advisory services ($219 million at June 30, 2012; and $217 million at June 30, 2011), $31 million of retained earnings designated for PBG ($41 million at June 30, 2012; and $54 million at June 30, 2011), $20 million of retained earnings designated for the Global Infrastructure Project Development Fund ($30 million at June 30, 2012; and $30 million at June 30, 2011), and $28 million of retained earnings designated for IFC SME Ventures for IDA coun-tries ($32 million at June 30, 2012; and $34 million at June 30, 2011).

Fy13 Designations

Income available for designations in FY13 (a non- GAAP measure)3 totaled $1,060 million. Based on the Board- approved distribu-tion policy, the maximum amount available for designation was $251 million. On August 7, 2013, the Board of Directors approved a

3. Income available for designations generally comprises net income excluding

unrealized gains and losses on investments and unrealized gains and losses on other

non- trading financial instruments, income from consolidated VIEs, and expenses

reported in net income related to prior year designations.

designation of $251 million of IFC’s retained earnings for grants to IDA. This designation is expected to be noted with approval by the Board of Governors, and thereby concluded, in FY14.

Deployable strategic capital

IFC’s deployable strategic capital decreased from 9.3% at June 30, 2012 to 8.4% at June 30, 2013. This decrease represents the effects of increases in investment commitments and disbursements par-tially offset by realized gains in FY13 and the reduction in the net unfunded status of the pension plans as of June 30, 2013 when com-pared to June 30, 2012.

v. enterprise risK ManageMent

In executing its sustainable private sector development business, IFC assumes various risks of various types. Active management of these risks is critical to IFC’s ability to maintain financial sustain-ability and achieve development impact.

IFC has developed a comprehensive enterprise risk management framework within which risks are continually identified, measured, monitored, analyzed and controlled. This framework is defined in terms of several interrelated dimensions:

» IFC’s guiding principles provide the foundation for active manage-ment of risk in IFC’s business, in its entirety, under the supervision of the Board of Directors, the Audit Committee, the Executive Vice President/CEO and the Management Team. » Risk appetite is defined and implemented in the form of expo-sure limits, policies and procedures. The Risk Management and Portfolio Vice Presidency, together with independent institutional oversight bodies, monitors compliance with prescribed limits, policies and procedures. » Risk governance is provided by a subcommittee of the Manage-ment Team, the Corporate Risk Committee, which reviews and approves all risk policies, sets risk standards and receives regular reports on different aspects of risk management at the enter-prise level. » As a member of the World Bank Group, IFC liaises with the corresponding Risk Management areas across the group on a regular basis.

Key risK ManageMent principles

The key principles which guide IFC’s integrated risk management framework are:

» The effective balancing of development impact, risk and reward; » Ensuring business decisions are based on an understanding of risks; » Being extremely selective in undertaking activities which may result in adverse reputational impact; and » Shared responsibility for risk management across the Corporation.

risK proFile

At the highest level, IFC’s risk management objectives are to main-tain financial soundness and preserve its reputation. Financial soundness is impacted by, among other things, the level of deploy-able strategic capital, IFC’s cost of funding and the liquidity of the liquid asset portfolios. Key to maintaining IFC’s reputation is the


Corporation’s ability to continually adapt to an evolving external business environment, the integrity and corporate governance of its business partners and clients, and the environmental and social effects of the projects with which IFC is associated. IFC’s capacity to take risks is constrained primarily by its capital base.

risK appetite

IFC’s risk appetite defines the types of risk which IFC is willing to assume in the pursuit of its business objectives. Risk tolerance defines the amount of each risk type that IFC considers acceptable in the context of its business activities. IFC translates risk appetite and tolerance into limits, policies, procedures and directives. The Corporation regularly measures, monitors and evaluates its risk profile to ensure that both individual and aggregated risks remain within the ranges deemed acceptable by Senior Management.

risK governance

The Board of Directors and Board Committees oversee the over-all risk tolerance for the Corporation and provide the highest level of oversight. Centralized risk management is provided by IFC’s Management Committees and Senior Management. IFC’s Management Team, under the direction of the Executive Vice President and CEO, is responsible for the Corporation’s day- to-day operations, including oversight and management of existing and potential risks. The Risk Management and Portfolio Vice Presidency is responsible for managing IFC’s financial and oper-ational risks. Project- specific environmental, social and corporate governance issues which arise out of IFC’s activities are overseen by the Business Advisory Services Vice Presidency; legal issues are overseen by the General Counsel Vice Presidency. There is common and shared accountability for strategic and stakeholder risk man-agement at the IFC Management Team level.

The Independent Evaluation Group assesses the alignment between projected and realized outcomes while the Compliance Advisor/Ombudsman, ensures that IFC remains accessible to its stakeholders. In addition, the World Bank Group’s Internal Audit Vice Presidency monitors internal controls and governance while the Integrity Vice Presidency monitors integrity in operations and investigates allegations of fraud and corruption.

Managing Financial anD reputational iMpact

The consequences of failing to manage risks optimally are financial loss and/or adverse impact to IFC’s reputation. Reputational impact is of significant concern to IFC as negative perceptions of stakehold-ers and/or the general public may adversely impact IFC’s ability to carry out its business effectively.

Risks are mitigated in practice by a variety of measures including close monitoring by risk management units and oversight by IFC’s Senior Management.

In FY13, communication activities related to reputational impact were managed by the Corporate Relations Department, which provides advice on strategic and crisis communications in order to manage potential and actual reputational impacts both at the corporate and project levels throughout the investment cycle. This team is also responsible for external and internal communications,

public affairs and brand marketing and collaborates across the Corporation to help develop and implement effective communica-tions strategies.

Fy13 enterprise risk Highlights

Highlights from significant changes made in FY13 are as follows: » Updated the existing framework to include a more comprehen-sive approach to measuring economic capital for IFC’s Treasury activities. » Created a working group, tasked with improving and formalizing the process and methodology for Corporation- wide stress testing. » Extended Risk and Control Self- Assessment to all departments to support active management of operational risk. » Designed enhancements to IFC’s Integrity Due Diligence process to increase consistency, better manage accountability and aug-ment decision- making efficiency. » Created a new Regional Chief Risk Officer role to serve IFC’s decentralized business model and provide senior risk oversight for the Sub- Saharan Africa region. » Benchmarked IFC against industry best practice in workouts and operational risk management.

strategic risK

IFC defines strategic risk as the potential reputation, financial, and other consequences of a failure to achieve its strategic objec-tives, and in particular, the risk of not achieving IFC’s purpose of furthering economic development by “encouraging the growth of productive private enterprise in member countries” and its vision “that people should have the opportunity to escape poverty and improve their lives.”

The key guiding principles and policies established as part of the framework for managing IFC’s strategic risks consist of:

» An ex- ante assessment of strategic fit of each project; » Guiding principles for IFC’s operations (catalytic role, business partnership and additionality); » Environment and social policies; and » IFC’s sanctions procedures.

The overall management of strategic risk is effected through the design, confirmation and implementation of an annual strategy for IFC. The strategy is developed by Senior Management and approved by the Board of Directors. IFC monitors the implementation of its strategy through many processes, including: (i) corporate and department scorecards; (ii) cascaded objectives; (iii) and an inte-grated quarterly management report. In addition, the Independent Evaluation Group conducts ex- post evaluations of the implementa-tion of IFC’s strategy on an ongoing basis.

Given the nature and scope of products and services that IFC provides its clients in furtherance of its development mandate, operational or business conflicts of interest can arise in the normal course of its activities. IFC recognizes that adverse reputational, client- relationship and other implications can arise if such conflicts are not carefully managed. In order to properly manage operational or business conflicts, IFC has implemented processes directed at (i) the identification of such conflicts as and when they arise; and (ii) the application of mitigation measures specifically tailored to the circumstances pertaining to the identified conflicts.


IFC’s Sustainability Framework articulates the Corporation’s strategic commitment to sustainable development and is an inte-gral component of IFC’s approach to risk management. The Sustainability Framework comprises IFC’s Policy and Performance Standards on Environmental and Social Sustainability and IFC’s Access to Information Policy:

» The Policy on Environmental and Social Sustainability describes IFC’s commitments, roles and responsibilities in relation to envi-ronmental and social sustainability. » The Performance Standards are intended to help guide clients on sustainable business practices a part of which involves con-tinually identifying and managing risks through stakeholder engagements and client disclosure obligations in relation to project- level activities. » IFC’s Access to Information Policy reflects the Corporation’s commitment to transparency and good governance and outlines institutional disclosure obligations.

IFC uses the Sustainability Framework along with other strate-gies, policies and initiatives to focus business activities on achieving the Corporation’s development objectives. All project teams are required to record expectations of development outcomes with time- bound targets using standard indicators. These indicators are tracked and performance is rated on an annual basis for the entire duration of every project.

guiding principles for iFc’s operations

Catalytic role: IFC will seek above all to be a catalyst in facili-tating productive investments in the private sector of its developing member countries. It does so by mobilizing financing from both foreign and domestic investors from the private and public sectors.

Business partnership: IFC functions as a business in partner-ship with the private sector. Thus, IFC takes the same commercial risks as do private institutions, investing its funds under the disci-pline of the marketplace.

Additionality: IFC participates in an investment only when it can make a special contribution not offered or brought to the deal by other investors.

SANCTIONS PROCEDURESIn FY07, IFC established a set of procedures to sanction parties involved in IFC projects committing corrupt, fraudulent, collusive, coercive or obstructive practices. In April 2010, the World Bank Group concluded an agreement with other multilateral develop-ment banks (MDBs) whereby entities debarred by one MDB may be sanctioned for the same misconduct by the other participating development banks. The enhanced emphasis on combating fraud and corruption does not change the high expectations IFC has always held for its staff, clients and projects, including due diligence and commitment to good corporate governance.

Fy13 strategic risk Highlights

IFC’s Development Goals (IDGs) are targets for reach, access, or other tangible development outcomes that IFC projects are expected to deliver during their lifetime. In FY12, the testing phase for two such goals, IDG 2 (Health and Education) and IDG 3 (Financial Services), was completed and in FY13, they moved into implementation and are fully integrated into IFC’s corporate score-card and incentives for management.

Financial risK

Financial risk management is about taking calculated risks that are aligned with the Corporation’s overall risk appetite and within the boundaries of established tolerances. As such, financial risk man-agement at IFC begins with an articulation of the Corporation’s risk appetite as defined by the types of risk that the Corporation is willing to take in the pursuit of its strategic objectives. Following from this articulation is an enterprise risk management framework that encompasses strategy, capital planning, target setting and risk monitoring and management.

IFC’s risk appetite, as it pertains to financial risk, has been defined by Senior Management and the Board of Directors as main-taining a AAA rating within a three- year time horizon. To align risk tolerance with this definition, IFC uses its economic capital framework to measure the capital required to maintain its AAA rating. Further, processes are in effect which translate IFC’s risk appetite into limits, policies, procedures and directives that help guide the management of IFC’s financial risk within acceptable tolerance bands.

An important consideration when setting IFC’s risk appetite is the need to use capital efficiently by recognizing the inherent trade- offs involved with maintaining reserve capital. Excess capital that is not deployed has limited financial and no development impact; at the same time, keeping some capital in reserve allows IFC to maintain financial strength and respond proactively in the event of future crises.

Key Financial policies and guidelines

IFC operates under a number of key financial policies and guide-lines as detailed below, which have been approved by its Board of Directors:

» Minimum liquidity (liquid assets plus undrawn borrowing com-mitments from IBRD) must be sufficient at all times to cover at least 45% of IFC’s estimated net cash requirements for the next three years. » Loans are funded with liabilities that have similar characteris-tics in terms of interest rate basis and currency and, for fixed rate loans, duration except for the Board of Directors- approved new products involving asset- liability mismatches. » IFC maintains a minimum level of liquidity, consisting of pro-ceeds from external funding, that covers at least 65% of the sum of: (i) 100% of committed but undisbursed straight senior loans; (ii) 30% of committed guarantees; and (iii) 30% of committed cli-ent risk management products. » IFC is required to maintain a minimum level of total resources (including paid- in capital, total loss reserves and retained earn-ings, net of designations) equal to total potential losses for all on- and off- balance sheet exposures estimated at levels consistent with the maintenance of a AAA rating.

creDit risK

IFC defines credit risk as the risk that third parties that owe IFC money, securities or other assets will not fulfill their obligations. These parties may default on their obligations to IFC due to bank-ruptcy, lack of liquidity, operational failure or other reasons. Credit risk management consists of policies, procedures and tools for managing credit risk, primarily in IFC’s loan portfolio, but also


related to counterparty risk taken in the liquid asset and borrow-ing portfolios.

Credit risk management spans investment origination to final repayment or sale; it includes portfolio management and risk mod-eling activities that provide an integrated view of credit risks and their drivers across the Corporation. With respect to IFC’s credit risk exposure to clients in developing emerging markets, at key steps during the investment approval process, information obtained from the investment departments is analyzed and an independent review of the credit risk of the transaction undertaken, including the assignment of a credit risk rating. The credit risk rating, together with investment size and product type, is a key input into the risk tiering that determines authority levels required for transaction approval. After commitment, the quality of IFC’s investment port-folio is monitored according to principles and procedures defined in the Operational Policies and Procedures. Responsibility for the day- to-day monitoring and management of credit risk in the portfolio rests with the individual investment departments.

Credit risk also includes concentration risk: the risk of extreme credit losses due to concentration of credit exposure to a common risk factor. IFC manages concentration risk through a number of operational and prudential limits, including limitations on single project/client exposure, single country exposure, and segment concentration. Similarly, credit policies and guidelines have been formulated covering treasury operations; these are subject to annual review and approval by the Corporate Risk Committee.

Credit risk across IFC’s investment portfolio is monitored and managed through proactive identification of emerging risks and portfolio stress testing in focus sub- portfolios.

For impaired loans and other investments at risk, rapid response is essential, as early involvement is the key to recovery when proj-ects get into difficulty. IFC provides focused attention on portfolio projects that require more sophisticated workout and restructur-ing. To help enable early involvement, seasoned professionals from IFC’s Special Operations Department comprised of workout pro-fessionals with extensive experience in handling such projects, work in close coordination with IFC’s Legal Department to provide rapid response.

The credit risk of loans is quantified in terms of the probabil-ity of default, loss given default and exposure at risk. These risk parameters are used to determine risk based economic capital for capital adequacy, capital allocation and internal risk management purposes as well as for setting general loan loss reserves and limits.

Treasury counterparty credit risk is managed to mitigate poten-tial losses from the failure of a trading counterparty to fulfill its contractual obligations.

General counterparty eligibility criteria are set by the Board of Directors- approved Asset- Liability Management and Derivative Products Authorization and Liquid Asset Management General Investment Authorization. IFC Counterparties are subject to con-servative eligibility criteria and are predominantly restricted to banks and financial institutions with high quality credit ratings by leading international credit rating agencies.

The eligibility criteria and limits of Treasury counterparties are stipulated by the “Liquid Asset Investment Directives.”

Specifically, IFC has adopted the following key financial poli-cies and guidelines that have been approved by the Corporate Risk Committee:

investment operations

» IFC does not normally finance for its own account more than 25% of a project’s cost. » Total exposure to a country is based on the amount of economic capital required to support its investment portfolio in that coun-try. Exposure limits are set for each country based on the size of its economy and its risk score. Sub- limits apply for certain sector exposures within a country. » Lender of record exposure in a country may not exceed a specified percentage of a country’s total long- term external debt. Lower trigger levels are set for certain countries. » IFC’s total exposure to a single obligor and groups of obligors may not exceed stipulated economic capital and nominal limits based on the riskiness of the obligor. » IFC’s committed exposure in guarantees that are subrogated in local currency is limited to $300 million for currencies for which there are no adequate currency and interest rate risk hedging instruments as determined by IFC’s Treasury Department at the time of commitment. There is a sublimit of $100 million for an individual currency under this limit.

treasury operations

» Counterparties are subject to conservative eligibility criteria. For derivative instruments, IFC’s counterparties are currently restricted to banks and financial institutions with high quality credit ratings (with a mark- to-market agreement) by leading inter-national credit rating agencies. In addition to IFC’s traditional use of top- rated international banks as swap counterparties, for the sole purpose of funding local currency loans, IFC has recently extended the universe of eligible swap counterparties to include central banks and select local banks. » Exposures to individual counterparties are subject to concen-tration limits. For derivatives, exposure is measured in terms of replacement cost for measuring total potential exposure. Institution- specific limits are updated at least quarterly based on changes in the total size of IFC derivatives portfolio or as needed according to changes in counterparty’s fundamental situation or credit status. » To limit its exposure, IFC signs collateral agreements with counterparties that require the posting of collateral when net mark- to-market exposures exceed certain predetermined thresh-olds. IFC also requires that low quality counterparties should not have more than 30% of total net- of-collateral exposures. » Because counterparties can be downgraded during the life of a given transaction, the agreements provide an option for IFC to terminate all swaps if the counterparty is downgraded below investment grade or if other early termination events materialize. » For exchange- traded instruments, IFC limits credit risk by restricting transactions to a list of authorized exchanges, con-tracts and dealers, and by placing limits on the Corporation’s position in each contract.


Fy13 credit risk Highlights

INVESTMENT OPERATIONSThe quality of IFC’s loan portfolio, as measured by aggregate risk ratings was substantially unchanged between June 30, 2012 and June 30, 2013.

IFC does not recognize income on loans where collectability is in doubt or payments of interest or principal are past due more than 60 days unless collection of interest is expected in the near future.

The amount of non- performing loans as a percentage of the disbursed loan portfolio4, a key indicator of loan portfolio per-formance, was 5.6% at June 30, 2013 (4.1% at June 30, 2012). The principal amount outstanding on non- performing loans totaled $1,272 million at June 30, 2013, an increase of $413 million (48%) from the June 30, 2012 level of $859 million. The increase in the amount of non- performing loans as a percentage of the disbursed loan portfolio was largely driven by the placing of seven loans with principal outstanding greater than $45 million for an aggregate amount of $423 million, partially offset by the removal of one loan with principal outstanding of $45 million.

Total reserves against losses on loans at June 30, 2013, increased to $1,628 million ($1,381 million at June 30, 2012). Total reserves against losses on loans are equivalent to 7.2% of the disbursed loan portfolio (6.6% — June 30, 2012).

The five- year trend of non- performing loans is presented below:

non-performing loans

$ millions Percentage of disbursed loans

FY13

FY09

FY10

FY12

FY11

0 200$ millions 400 600 800 1,000 1,200

0.0 1.0 2.0 3.0 4.0 5.0 6.0Percentage

The guarantee portfolio is exposed to the same idiosyncratic and systematic risks as IFC’s loan portfolio and the inherent probable losses in the guarantee portfolio need to be covered by a reserve for loss. The reserve at June 30, 2013, was $17 million, down from $21 million at June 30, 2012, based on the year- end portfolio, and is included in payables and other liabilities on IFC’s consolidated balance sheet. There was a release of provision of $4 million on guarantees in the consolidated income statement in FY13 ($3 mil-lion release of provision — FY12).

TREASURY OPERATIONSCounterparty credit risk in IFC’s Treasury operations is managed on a daily basis through strict eligibility criteria and accompanying limits. Treasury operations counterparties also remain well diver-sified by sector and geography.

In accordance with IFC’s key financial policies and guidelines noted above, IFC holds collateral in the amount of $1,274 million at June 30, 2013 ($3,570 million — June 30, 2012).

4. Excluding “loan- like” debt securities.

MarKet risK

IFC’s exposure to market risk is largely mitigated by the Corpo-ration’s matched- funding policy and by the use of derivative instruments to convert most of IFC’s assets that are funded from market borrowings and such market borrowings into floating rate US dollar assets and liabilities with similar duration. Additional strategies that are employed are as described below.

investment operations

IFC takes equity risk in its listed and unlisted equity investments in emerging markets. The Corporate Equity Committee, a subcommit-tee of the Management Team, provides guidance on IFC’s overall strategy in equity investments, equity portfolio management and asset allocation. Numerous factors are taken into consideration when making asset allocation decisions, reflecting IFC’s roles as a development institution and long- term investor, as well as the fact that most of the Corporation’s equity investments are in private securities, at least at origination. The factors taken into consid-eration by the Corporate Equity Committee include projected developmental impact, IFC’s additionality and comparative advan-tages, country diversification, sector diversification, IFC’s country exposure considerations, macroeconomic considerations, global trends in equity markets, and valuations.

Interest rate and currency exchange risk associated with fixed rate and/or non- US dollar lending is largely economically hedged via currency and interest rate swaps that convert cash flows into variable rate US dollar flows.

Market risk resulting from derivative transactions with cli-ents, which are intended to facilitate clients’ risk management, is mitigated by entering into offsetting positions with highly rated market counterparties.

liquid asset portfolios

The market risk in the internally- managed liquid asset portfolios is measured using a corporate value- at-risk model, which calculates daily value- at-risk measurements, interest rate exposure and credit spread exposure.

The primary instruments for maintaining sufficient liquidity are IFC’s seven liquid asset portfolios:

» P0, which is generally invested in short- dated deposits, money market funds, fixed certificates of deposits, one- month floater securities and repos, reflecting its use for short- term funding requirements » P1 and P2, which are generally invested in: (a) high quality foreign sovereign, sovereign- guaranteed and supranational fixed income instruments; (b) US Treasury or agency instruments; (c) high quality ABS rated by at least two rating agencies and/or other high quality notes issued by corporations; (d) MBS; (e) interest rate futures and swaps to manage currency risk in the portfolio, as well as its duration relative to benchmark; and (f) cash deposits and repos » P3, which is an outsourced portion of the P1 portfolio (managed by external managers) » P4, which is an outsourced portion of the P2 portfolio (managed by external managers) » P6, which is invested in short- term local currency money market instruments and local government securities


» P7, which consists of after- swap proceeds from variable- rate bor-rowings denominated and invested in Euros and proceeds from fixed- rate borrowings denominated and invested in Nigerian naira.

The P0, P1 and P3 portfolios are managed to variable rate US dollar benchmarks, on a portfolio basis. To this end, a variety of derivative instruments are used, including short- term, over- the-counter foreign exchange forwards (covered forwards), interest rate and currency swaps, and exchange- traded interest rate futures and options. IFC takes both long and short positions in securities in the management of these portfolios to their respective benchmarks.

The primary source of interest rate risk in the liquid asset port-folios is the P2 and P4 portfolios, which are managed to Barclay’s 1-3 year US Treasury Index benchmark. P2 represents the portion of IFC’s capital not disbursed as equity investments, and the bench-mark reflects the chosen risk profile for this un- invested capital (paid- in capital and retained earnings). P4 represents an outsourced portion of the P2 portfolio. In addition, the P1 and P3 portfolios also contain spread risk of high quality credit counterparties.

The P6 portfolio consists of foreign currency proceeds raised locally through swaps and other funding instruments to provide more flexible local currency loan products to clients.

The Euro portion of the P7 portfolio is managed to six equal- weighted EURIBID deposits maturing at the next six monthly reset dates of outstanding liabilities, rebalanced at each calendar month- end. The Nigerian naira portion of the P7 portfolio is managed to the related IFC debenture issued in FY13.

Borrowing activities

IFC expands its access to funding and decreases its overall fund-ing cost by issuing debt securities in various capital markets in a variety of currencies, sometimes using complex structures. These structures include borrowings payable in multiple currencies, or borrowings with principal and/or interest determined by reference to a specified index such as a reference interest rate, or one or more foreign exchange rates.

Market risk associated with fixed rate obligations and structured instruments entered into as part of IFC’s funding program is gener-ally mitigated by using derivative instruments to convert them into variable rate US dollar obligations, consistent with the matched- funding policy.

asset- liability Management

While IFC’s matched- funding policy provides a significant level of protection against currency and interest rate risk, IFC can be exposed to residual market risks in its overall asset and liability management of the market borrowings funded balance sheet. Residual currency risk arises from events such as changes in the level of non- US dollar loan loss reserves. The aggregate position in each lending currency is monitored on a daily basis and the risk is managed within a range of +/– $5 million equivalent in each currency.

Residual interest rate risk may arise from differing interest rate reset dates on assets and liabilities or assets that are fully match- funded at inception, which can become mismatched over time due to write- downs, prepayments, or rescheduling.

The residual interest rate risk is managed by measuring the sen-sitivity of the present value of assets and liabilities in each currency to a one basis point change in interest rates and managed on a daily basis within a range of +/– $50,000.

Fy13 Market risk Highlights

The overall level of market risk in IFC’s Treasury operations increased in FY13 due to increasing volatility of Sovereign interest rates near the end of FY13 yet Treasury market risk still remained low compared to other portfolios and risk types. Interest rate, foreign exchange, and spread risk are all carefully controlled on a daily basis using a system of limits that remained in compliance during FY13.

Shortly after the fiscal year began, the European Central Bank announced their, not- yet-used, Outright Monetary Transactions (OMT) program aimed at equalizing borrowing costs for private borrowers across the European Union by providing support for short- dated sovereign government bonds. Risk premia receded across financial markets in response. The decrease in risk pre-mia was further supported by the United States when it avoided the “fiscal cliff” and the Bank of Japan, which announced a much greater- than-expected ease in monetary policy. The liquid asset portfolios benefitted from this improvement in the markets and remained fully invested in spread risk throughout the fiscal year.

The overall level of market risk in IFC’s equity portfolio was quite elevated in FY13, due to large fluctuations in global equity markets, foreign exchange rates and commodity prices. Equity val-uations improved steadily during the first half of FY13, both in local currency and, to a greater degree, in IFC’s reporting currency, the US$, as most emerging market currencies appreciated moderately against the US$ in the first half of FY13. This period was followed by sideways fluctuations in the third quarter of FY13 and the first half of the last quarter of FY13, but the last seven weeks of FY13 virtually erased all gains from the first half of FY13, as prospects of a less accommodative Federal Reserve and renewed concerns on global growth, dominated world markets. It should also be noted that emerging market equities lagged most developed equity mar-kets in FY13, accelerating the trend that started in late 2010.

In response to such heightened volatility, the Corporation remained especially selective at entry and managed its equity investment portfolio proactively through close monitoring, quar-terly portfolio reviews and continued oversight from the Corporate Equity Committee. Active portfolio management enabled the Corporation to revolve its funds significantly in FY13, and maintain an acceptable level of profitability.

liQuiDity risK

IFC’s investments are predominantly illiquid in nature due to the lack of capital flows, the infrequency of transactions, and the lack of price transparency in many emerging markets. To offset this liquid-ity risk, strict investment eligibility criteria for the Liquid Asset portfolios are defined in the Liquid Asset Management Investment Guidelines. Examples of these criteria include minimum sizes for bond issuances, single bond issue concentration limits and per-centage of total bond issuance limits. Consequently, a significant portion of the liquid assets is invested in highly liquid securities such as: (i) high quality foreign sovereign, sovereign- guaranteed and supranational fixed income instruments; (ii) US Treasury or agency instruments; and (iii) money market mutual funds. In the event of a liquidity crisis, these assets will be available to generate funds that are needed to support IFC’s cash requirements.


IFC’s liquid assets maintained similar exposure to high credit quality counterparties, while credit spread risk declined in FY13 due to improving credit conditions. Net interest rate risk of IFC’s Liquid Asset portfolios remained concentrated in short- maturity obliga-tions and the spread risk is well diversified by sector and geography.

Fy13 liquidity risk Highlights

On June 30, 2013, IFC’s liquid assets portfolio stood at $31.2 bil-lion ($30.4 billion on June 30, 2012). Current levels of liquid assets also represented 309% of the sum of (i) 100% of committed but undisbursed straight senior loans; (ii) 30% of committed guaran-tees; and (iii) 30% of committed client risk management products (327% on June 30, 2012).

FunDing risK

IFC’s primary objective with respect to managing funding risk is to maintain its triple- A credit ratings and, thereby, maintain access to market funding as needed at the lowest possible cost.

The risk of higher funding costs is also reduced by IFC’s annual funding targets, the US$ benchmark bonds, and the Discount Note Program. Accessing the capital markets for financing establishes investor confidence, liquidity, price transparency, and a diversi-fied investor base, all of which help to reduce financing cost. IFC’s Discount Note Program provides swift access to funded liquidity, to complement traditional funding sources, and to provide a natural funding source for short term financing programs.

Fy13 Funding risk Highlights

During FY13, IFC raised $12.8 billion, net of derivatives ($11.9 bil-lion in FY12 and $10.3 billion in FY11). The outstanding balance under the Discount Note Program at June 30, 2013 was $1.3 billion ($1.4 billion — June 30, 2012). During FY13, credit spreads for IFC’s new borrowings deteriorated to around Libor flat for a 5 year term issue, from Libor minus 10 basis points in FY12.

operational risK

Consistent with “Internal Convergence of Capital Measurement and Capital Standards, A Revised Framework” issued by the Basel Committee on Banking Supervision in June 2004, IFC defines oper-ational risk as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.

IFC’s Operational Risk Management (ORM) program is based on a directive approved by the Corporate Risk Committee during FY10. This directive establishes the approach and roles and respon-sibilities for operational risk management in the Corporation.

IFC’s ORM approach is designed to ensure that operational risks are identified, assessed, and managed so as to minimize potential adverse impacts and to enable Senior Management to determine which risks IFC will: (i) manage internally, as part of its ongoing business; (ii) mitigate through contingency planning; or (iii) trans-fer to third parties, whether by subcontracting, outsourcing, or insurance.

IFC seeks to mitigate the risks it manages internally by maintain-ing a comprehensive system of internal controls that is designed not only to identify the parameters of various risks but also to monitor and control those areas of particular concern.

IFC utilizes risk transfer, including insurance, at both the project and the institutional levels for mitigation of low frequency and high severity operational risks. At both levels, IFC identifies and evalu-ates risks, determines available contractual transfer and insurance options, implements the optimal structure, and tracks its effective-ness over time. IFC also insures its corporate assets and operations against catastrophic losses where commercially viable.

Other key components of IFC’s operational risk management approach include:

» Operational risk assessment and measurement based on market practices and tools. » Adoption of the COSO5 control framework as the basis for its evaluation of the effectiveness of its internal controls over finan-cial reporting. » Ongoing independent review of the effectiveness of IFC’s inter-nal controls in selected key areas and functions performed by the Internal Audit Vice Presidency of the World Bank Group. » Promoting data integrity in the Corporation based on its data management policy. » Ensuring that processes and controls are in place to manage the risks in new products and initiatives before they are executed, through a New Initiative and Product Assessment Group with representation from key business and support functions.

Fy13 operational risk Highlights

IFC is continuing a multiyear effort to develop and implement enhanced methodologies for identifying, measuring, monitoring and managing operational risk in its key activities. IFC contin-ued the program established in FY12 for obtaining annual written assertions on operational risk management by Vice Presidents and Directors. To support this, IFC also:

» Formalized a network of departmental Operational Risk Management Liaisons and provided training for them in apply-ing operational risk management tools to their business processes. » Extended Risk and Control Self- Assessment to all departments. » Continued rolling out other operational risk management meth-odologies and tools, including risk events tracking, root cause analysis and key risk indicators. » Conducted events to promote and raise awareness of operational risk management.

IFC also continues to focus on its preparedness to react to an emergency situation that could disrupt its normal operations.

During FY13, IFC: » Collaborated with the World Bank in updating the World Bank Group Business Continuity Management policy to align with internationally recognized business continuity standards. » Conducted emergency simulation exercises in Washington, in cooperation with the World Bank. » Maintained Emergency Management Teams in all regions; and held emergency management workshops and simulations in larger country offices in one region. » Conducted exercises involving individual members of the Management Team, in anticipation of an exercise for the whole Management Team.

5. COSO refers to the Internal Control — 1992 Integrated Framework formulated by the

Committee of Sponsoring Organizations of the treadway Commission, which was

convened by the US Congress in response to the well- publicized irregularities that

occurred in the financial sector in the United States during the late 1980s.


» Leveraging Business Impact Analysis results, updated Business Continuity Plans for departments responsible for critical business processes, and conducted a business continuity exercise for one critical Treasury process. » Continued to implement the information technology disaster recovery testing strategy established in FY12 by performing component and integration tests for most applications supporting critical business processes. » Began planning for a comprehensive update to IFC’s Business Impact Analysis in FY14.

vi. critical accounting policies

Note A to IFC’s FY13 Consolidated Financial Statements contain a summary of IFC’s significant accounting policies, including a dis-cussion of recently adopted accounting standards and accounting and financial reporting developments. Certain of these policies are considered to be “critical” to the portrayal of IFC’s financial con-dition and results of operations, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain.

These policies include: » Determining the level of reserves against losses in the loan portfolio; » Determining the level and nature of impairment for equity invest-ments and debt securities carried at fair value with changes in fair value being reported in other comprehensive income (OCI) and for equity investments accounted for at cost less impairment (where impairment is determined with reference to fair value); » Determining the fair value of certain equity investments, debt securities, loans, liquid assets, borrowings and derivatives, which have no quoted market prices and are accounted for at fair value; and » Determining the future pension and postretirement benefit costs and obligations using actuarial assumptions based on financial market interest rates, past experience, and management’s best estimate of future benefit cost changes and economic conditions.

Many of IFC’s financial instruments are classified in accordance with the fair value hierarchy established by accounting stan-dards for fair value measurements and disclosures where the fair value and/or impairment is estimated based on internally devel-oped models or methodologies utilizing significant inputs that are non- observable.

reserve against losses on loans

IFC considers a loan as impaired when, based on current informa-tion and events, it is probable that IFC will be unable to collect all amounts due according to the loan’s contractual terms. The reserve against losses for impaired loans reflects management’s judgment of the present value of expected future cash flows discounted at the loan’s effective interest rate. The reserve against losses for loans also includes an estimate of probable losses on loans inherent in the portfolio but not specifically identifiable. The reserve is established through periodic charges to income in the form of a provision for losses on loans. Loans written off, as well as any subsequent recov-eries, are recorded through the reserve.

The assessment of the adequacy of reserves against losses for loans is highly dependent on management’s judgment about fac-tors such as its assessment of the financial capacity of borrowers, geographical concentration, industry, regional and macroeconomic conditions, and historical trends. Due to the inherent limitation of any particular estimation technique, management utilizes a capital pricing and risk framework to estimate the probable losses on loans inherent in the portfolio but not specifically identifiable. This Board of Directors- approved framework uses actual loan loss history and aligns the loan loss provisioning framework with IFC’s capital ade-quacy framework.

The reserve against losses on loans is separately reported in the consolidated balance sheet as a reduction of IFC’s total loans. Increases or decreases in the reserve level are reported in the income statement as provision for losses or release of provision for losses on loans, and guarantees. The reserve against losses on loans relates only to the Investment services segment of IFC (see Note T to the FY13 Consolidated Financial Statements for further discus-sion of IFC’s business segments).

otHer- tHan-teMporary iMpairMents on eQuity investMents anD DeBt securities

IFC assesses all equity investments accounted for at fair value through OCI and all equity investments accounted for at cost less impairment for impairment each quarter. When impairment is identified and is deemed to be other- than-temporary, the equity investment is written down to its impaired value, which becomes the new cost basis in the equity investment. IFC generally presumes that all equity impairments are deemed to be other- than-temporary. Impairment losses on equity investments accounted for at cost less impairment are not reversed for subsequent recoveries in value of the equity investment until it is sold. Recoveries in value on equity investments accounted for at fair value through OCI that have been the subject of an other- than-temporary impairments are reported in OCI until sold.

IFC assesses all debt security investments accounted for at fair value through OCI for impairment each quarter. When impairment is identified, the entire impairment is recognized in net income if certain conditions are met (as detailed in Note A to IFC’s FY13 Consolidated Financial Statements). However, if IFC does not intend to sell the debt security and it is not more likely than not that IFC will be required to sell the security, but the security has suf-fered a credit loss, the credit- related impairment loss is recognized in net income and the non- credit related loss is recognized in OCI.

valuation oF Financial instruMents WitH no QuoteD MarKet prices

IFC reports at fair value all of its derivative instruments, all of its liquid asset trading securities and certain borrowings, loans, equity investments and debt securities. In addition, various investment agreements contain embedded or standalone derivatives that, for accounting purposes, are separately accounted as either derivative assets or liabilities, including puts, caps, floors, and forwards. IFC classifies all financial instruments accounted for at fair value based on the fair value hierarchy established by accounting standards for fair value measurements and disclosures as described in more detail in Notes A and R to IFC’s FY13 Consolidated Financial Statements.


Many of IFC’s financial instruments accounted for at fair value are valued based on unadjusted quoted market prices or using models where the significant assumptions and inputs are market- observable. The fair values of financial instruments valued using models where the significant assumptions and inputs are not market- observable are generally estimated using complex pricing models of the net present value of estimated future cash flows. Management makes numerous assumptions in developing pricing models, including an assessment about the counterparty’s finan-cial position and prospects, the appropriate discount rates, interest rates, and related volatility and expected movement in foreign currency exchange rates. Changes in assumptions could have a sig-nificant impact on the amounts reported as assets and liabilities and the related unrealized gains and losses reported in the income statement and statement of OCI. The fair value computations affect both the Investment services and Treasury segments of IFC (see

Note T to the FY13 Consolidated Financial Statements for further discussion of IFC’s business segments).

pension anD otHer postretireMent BeneFits

IFC participates, along with IBRD and MIGA, in pension and post-retirement benefit plans that cover substantially all of their staff members. All costs, assets and liabilities associated with the plans are allocated between IBRD, IFC and MIGA based upon their employees’ respective participation in the plans. The underlying actuarial assumptions used to determine the projected benefit obligations, the fair value of plan assets and the funded status asso-ciated with these plans are based on financial market interest rates, past experience, and management’s best estimate of future benefit cost changes and economic conditions. For further details, please refer to Note W to the FY13 Consolidated Financial Statements.

vii. results oF operations

overvieW

The overall market environment has a significant influence on IFC’s financial performance.The main elements of IFC’s net income and comprehensive income and influences on the level and variability of net income and com-

prehensive income from year to year are:

Elements Significant Influences

net income:

Yield on interest earning assets Market conditions including spread levels and degree of competition. Nonaccruals and recoveries of interest on loans formerly in nonaccrual status and income from participation notes on individual loans are also included in income from loans.

Liquid asset income Realized and unrealized gains and losses on the liquid asset portfolios, which are driven by external factors such as: the interest rate environment; and liquidity of certain asset classes within the liquid asset portfolio.

Income from the equity investment portfolio Global climate for emerging markets equities, fluctuations in currency and commodity markets and company- specific performance for equity investments. Performance of the equity portfolio (principally realized capital gains, dividends, equity impairments, gains on non- monetary exchanges and unrealized gains and losses on equity investments).

Provisions for losses on loans and guarantees Risk assessment of borrowers and probability of default and loss given default.

Other income and expenses Level of advisory services provided by IFC to its clients, the level of expense from the staff retirement and other benefits plans, and the approved administrative and other budgets.

Gains and losses on other non- trading financial instruments accounted for at fair value

Principally, differences between changes in fair values of borrowings, including IFC’s credit spread, and associated derivative instruments and unrealized gains associated with the investment portfolio including puts, warrants and stock options which in part are dependent on the global climate for emerging markets. these securities are valued using internally developed models or methodologies utilizing inputs that may be observable or non- observable.

Grants to IdA Level of the Board of Governors- approved grants to IdA.

other comprehensive income:

Unrealized gains and losses on listed equity investments and debt securities accounted for as available- for-sale

Global climate for emerging markets equities, fluctuations in currency and commodity markets and company- specific performance. Such equity investments are valued using unadjusted quoted market prices and debt securities are valued using internally developed models or methodologies utilizing inputs that may be observable or non- observable.

Unrecognized net actuarial gains and losses and unrecognized prior service costs on benefit plans

Returns on pension plan assets and the key assumptions that underlay projected benefit obligations, including financial market interest rates, staff expenses, past experience, and management’s best estimate of future benefit cost changes and economic conditions.


IFC’s net income (loss) for each of the past five fiscal years ended June 30, 2013 is presented below (US$ millions):

net income (loss)US$ millions

17,50

2013

2009

2010

2012

2011

-250 0 250 500 750 1,000 1,250 1,500

The following paragraphs detail significant variances between FY13 and FY12, and FY12 and FY11, covering the periods included in IFC’s FY13 Consolidated Financial Statements. Certain amounts in FY12 and FY11 have been reclassified to conform to the current year’s presentation. Where applicable, the following paragraphs reflect reclassified prior year comparative information. Such reclas-sifications had no effect on net income or total assets.

Fy13 versus Fy12

net income

IFC reported income before net gains and losses on other non- trading financial instruments accounted for at fair value and grants to IDA of $928 million in FY13, as compared to $1,877 mil-lion in FY12.

The decrease in income before net gains and losses on other non- trading financial instruments accounted for at fair value and grants to IDA in FY13 when compared to FY12 was principally as a result of the following (US$ millions):

Increase (decrease)

FY13 vs FY12

Realized capital gains on equity investments $ (1,079)


Foreign currency transaction gains and losses on non- trading activities (110)

Advisory services expenses, net (91)

Expenses from pension and other postretirement benefit plans (77)

Unrealized gains on equity investments 154

Income from liquid asset trading activities 187

Other- than-temporary impairments on equity investments 251

Other, net (58)


Net gains on other non- trading financial instruments accounted for at fair value totaled $422 million in FY13, $641 million higher than net losses of $219 million in FY12. Accordingly, IFC has reported income before grants to IDA of $1,350 million, $308 mil-lion lower than income before grants to IDA of $1,658 million in FY12.

Grants to IDA totaled $340 million in FY13, as compared to $330 million in FY12. Net loss attributable to noncontrolling interest totaled $8 million in FY13 as compared to $0 in FY12. Accordingly, net income attributable to IFC totaled $1,018 million in FY13, as compared with a net income of $1,328 million in FY12.

A more detailed analysis of the components of IFC’s net income follows.

INCOME FROM LOANS AND GUARANTEESIFC’s primary interest earning asset is its loan portfolio. Income from loans and guarantees for FY13 totaled $1,059 million, com-pared with $938 million in FY12, an increase of $121 million.

The disbursed loan portfolio grew by $1,563 million, from $21,043 million at June 30, 2012 to $22,606 million at June 30, 2013. The weighted average contractual interest rate on loans at June 30, 2013 was 4.5%, versus 4.7% at June 30, 2012. These factors com-bined resulted in $90 million higher interest income than in FY12. Commitment and financial fees were $28 million higher than in FY12. Recoveries of interest on loans removed from nonaccrual status, net of reversals of income on loans placed in nonaccrual sta-tus were $26 million lower than in FY12. There were no gains on sale of loans in FY13 as compared to $2 million in FY12. Income from IFC’s participation notes over and above minimum contrac-tual interest and other income were $3 million lower than in FY12. Unrealized gains on loans accounted for at fair value and gains on non- monetary exchanges were $34 million higher than in FY12.

INCOME FROM EQUITY INVESTMENTSIncome from the equity investment portfolio decreased by $705 mil-lion from $1,457 million in FY12 to $752 million in FY13.

IFC generated realized gains on sales of equity investments for FY13 of $921 million, as compared with $2,000 million for FY12, a decrease of $1,079 million. IFC sells equity investments where IFC’s developmental role was complete, and where predetermined sales trigger levels had been met and, where applicable, lock ups have expired.

Total realized gains on equity investments are concentrated — in FY13, 10 investments generated individual capital gains in excess of $20 million for a total of $562 million, or 61%, of the FY13 realized gains, compared to 11 investments generating individual capital gains in excess of $20 million for a total of $1,821 million, or 91%, of the FY12 realized gains.

Gains on non- monetary exchanges in FY13 totaled $6 million, as compared with $3 million in FY12.

Dividend income totaled $248 million, as compared with $274 million in FY12, a decrease of $26 million. The decrease was largely due to a one time dividend from one investment in FY12 in the amount of $41 million that did not recur in FY13. Dividend income in FY13 included returns from four unincorporated joint ventures (UJVs) in the oil, gas and mining sectors accounted for under the cost recovery method, which totaled $36 million, as com-pared with $43 million from three such UJVs in FY12.

Other- than-temporary impairments on equity investments totaled $441 million in FY13 ($289 million on equity investments accounted for as available- for-sale; and $152 million on equity investments accounted for at cost less impairment), as compared with $692 million in FY12 ($420 million on equity investments accounted for as available- for-sale; and $272 million on equity investments accounted for at cost less impairment). In FY13, three investments generated individual other- than-temporary impair-ments in excess of $20 million for a total of $90 million. In FY12, eight investments generated individual other- than-temporary impairments in excess of $20 million for a total of $298 million. Other- than temporary impairments on equity investments in FY13 were concentrated in the last three months of FY13, reflecting the weaker performance of emerging markets equities in general. Such


impairments totaled $201 million in the last three months of FY13, as compared to $240 million in the first nine months of FY13.

Unrealized gains on equity investments in FY13 totaled $26 mil-lion, as compared with unrealized losses of $128 million in FY12. One investment accounted for $217 million of unrealized gains in FY13. Seven investments in equity funds accounted for $162 mil-lion of the unrealized losses in FY13. Seven investments in equity funds accounted for $146 million of the unrealized losses in FY12. Individual investments in such Funds provided a significant com-ponent of such unrealized gains and losses.

INCOME FROM DEBT SECURITIESIncome from debt securities decreased to $5 million in FY13 from $81 million in FY12, a decrease of $76 million. The largest components of the decrease were higher other- than-temporary impairments ($19 million) and unrealized losses on debt securities accounted for at fair value ($60 million) in FY13 when compared with FY12. Realized gains on debt securities were $2 million lower in FY13 as compared to FY12.

PROVISION FOR LOSSES ON LOANS AND GUARANTEES AND OTHER RECEIVABLESThe quality of IFC’s loan portfolio, as measured by average coun-try risk ratings and average credit risk ratings was substantially unchanged during FY13. By another measure, non- performing loans increased from $859 million (4.1%) of the disbursed loan portfolio at June 30, 2012 to $1,272 million (5.6%) at June 30, 2013. IFC recorded provision for losses on loans, guarantees and other receivables of $243 million in FY13 ($298 million of specific provi-sions for losses on loans, $49 million release of portfolio provisions for losses on loans, and $6 million release of provision for losses on guarantees and other receivables) as compared to provisions for losses of $117 million in FY12 ($76 million of specific provisions for losses on loans, $39 million of portfolio provisions for losses on loans and $2 million of provision for losses on guarantees and other receivables).

On June 30, 2013, IFC’s total reserves against losses on loans were 7.2% of the disbursed loan portfolio (6.6% at June 30, 2012).

Specific reserves against losses at June 30, 2013 of $741 million ($447 million at June 30, 2012) are held against impaired loans of $1,403 million ($923 million at June 30, 2012), a coverage ratio of 53% (48%).

INCOME FROM LIQUID ASSET TRADING ACTIVITIESThe liquid assets portfolio, net of derivatives and securities lending activities, increased from $30.4 billion at June 30, 2012, to $31.2 bil-lion at June 30, 2013. Income from liquid asset trading activities totaled $500 million in FY13 ($313 million in FY12). In FY13 and FY12, all liquid asset portfolios outperformed their respective benchmarks, except for the P4 portfolio (which has a Net Asset Value (NAV) of $769 million and marginally underperformed).

Interest income in FY13 totaled $430 million. In addition, the portfolio of ABS and MBS experienced fair value gains totaling $161 million in FY13. Holdings in other products, including US Treasuries, global government bonds, high quality corporate bonds and derivatives generated $91 million of losses in FY13, a net gain of $70 million.

The P1 portfolio generated a return of $292 million in FY13, or 1.4%. In FY12, the P1 portfolio generated a return of $217 million, or 0.9%. The externally managed P3 portfolio, managed against the

same variable rate benchmark as the P1 portfolio, returned $17 mil-lion in FY13, or 1.9%, $3 million higher than the $14 million, or 1.6%, return in FY12.

The P2 and externally- managed P4 portfolios returned $147 mil-lion (3.1%) and $2 million (0.3%) in FY13, respectively, as compared to $62 million (1.2%) and $14 million (2.0%) in FY12, respectively.

IFC’s P0 portfolio earned $2 million in FY13, a return of 0.1%, as compared to $7 million (0.5%) in FY12. The P6 local currency liquidity portfolio generated income of $42 million (4.5%) in FY13, $1 million less than the $43 million (5.7%) in FY12.

At June 30, 2013, trading securities with a fair value of $85 million are classified as Level 3 securities ($150 million on June 30, 2012).

CHARGES ON BORROWINGSIFC’s charges on borrowings increased by $39 million, from $181 million in FY12 to $220 million in FY13, largely reflecting the increased level of borrowings partly set off by lower US dol-lar interest rate environment, when comparing FY13 and FY12. During FY13, IFC bought back $0.4 billion of its market borrow-ings ($0.6 billion in FY12). Charges on borrowings of $220 million in FY13 ($181 million in FY12) are reported net of gains on buybacks of $11 million ($19 million in FY12).

The weighted average rate of IFC’s borrowings outstanding from market sources, after the effects of borrowing- related derivatives, and excluding short- term borrowings issued under the Discount Note Program, declined during the year from 0.7% at June 30, 2012 to 0.4% at June 30, 2013. The size of the borrowings port-folio (excluding the short- term Discount Note Program), net of borrowing- related derivatives and before fair value adjustments, increased by $3.2 billion during FY13 from $40.7 billion at June 30, 2012, to $43.9 billion at June 30, 2013.

OTHER INCOMEOther income of $441 million for FY13 was $7 million lower than in FY12 ($448 million). Other income in FY13 includes manage-ment fees and service fee reimbursements from AMC of $40 million ($28 million in FY12) and income from advisory services of $239 mil-lion ($269 million in FY12). In FY13, income from advisory services included $210 million contributed by donors ($189 million — FY12) and $29 million of fees from clients and administrative fees from donors ($25 million — FY12).

OTHER EXPENSESAdministrative expenses (the principal component of other expenses) increased by $47 million from $798 million in FY12 to $845 million in FY13, driven largely by a 6.7% increase in staffing and, to a lesser extent, salary increases to existing staff. Administra-tive expenses include the grossing- up effect of certain revenues and expenses attributable to IFC’s reimbursable program and expenses incurred in relation to workout situations (Jeopardy Projects) ($26 million in FY13, as compared with $22 million in FY12).

IFC recorded expenses from pension and other postretirement benefit plans in FY13 of $173 million, as compared with $96 million in FY12, an increase driven by actuarial assumptions related to the funding status of the various benefit plans at June 30, 2012.

Advisory services expenses totaled $351 million in FY13 ($290 million in FY12). Advisory services expenses included $210 million of funds contributed by donors that were utilized in the provision of advisory services in FY13 ($189 million — FY12).


NET GAINS AND LOSSES ON OTHER NON- TRADING FINANCIAL INSTRUMENTSAs discussed in more detail in Note A to IFC’s FY13 Consolidated Financial Statements, IFC accounts for certain financial instru-ments at fair value with unrealized gains and losses on such financial instruments being reported in net income, namely: (i) all swapped market borrowings; and (ii) all equity investments in which IFC has greater than 20% holdings and/or equity and fund investments which, in the absence of the Fair Value Option, would be required to be accounted for under the equity method, and (iii) substantially all market borrowings. All other non- trading derivatives, including standalone and embedded derivatives in the loan, equity and debt security portfolios continue to be accounted for at fair value.

The resulting effects of fair value accounting for these non- trading financial instruments on net income in FY13 and FY12 are summarized as follows (US$ millions):

Fy13 FY12

Realized gains and losses on derivatives associated with investments $ 35 $ 11

Non- monetary gains on derivatives associated with investments 2 10

Unrealized gains and losses on derivatives associated with investments 353 (34)

Unrealized gains and losses on market borrowings and associated derivatives, net 32 (206)

net gains and losses on other non- trading financial instruments accounted for at fair value $ 422 $ (219)

Changes in the fair value of IFC’s market borrowings and asso-ciated derivatives, net, includes the impact of changes in IFC’s own credit spread when measured against US$ LIBOR. As credit spreads widen, unrealized gains are recorded and when credit spreads nar-row, unrealized losses are recorded (notwithstanding the impact of other factors, such as changes in risk- free interest and foreign currency exchange rates). The magnitude and direction (gain or loss) can be volatile from period to period but do not alter cash flow. IFC’s policy is to generally match currency, amount and timing of cash flows on market borrowings with cash flows on associated derivatives entered into contemporaneously.

In FY12, unsettled conditions in European sovereign debt markets and renewed signs of flagging economic activity were accompanied by further interest rate declines from already low lev-els. Risk appetites in the capital markets receded, as evidenced by some flight to quality along the credit spectrum. This led to better pricing for triple- A IFC issues which in FY11 sat at around LIBOR flat, but moved back to 5 to 10 basis points below LIBOR by the end of FY12 for US$ issuances at 5 year tenor. This development, along with movements in foreign exchange basis swap rates, resulted in adverse after swap revaluations on market borrowings, net of asso-ciated derivatives and accordingly, IFC reported unrealized losses in FY12 of $206 million.

In FY13, interest rate levels remained stable through the first nine months of the year, then, in the last three months of FY13, bond markets weakened on the prospect of tighter liquidity condi-tions amid signs of accelerating US economic activity. Benchmark 5 year US$ interest rates jumped around 50 basis points during the last three months of FY13 causing large revaluation gains on IFC’s portfolio of medium to long term borrowings, offset by losses on associated derivatives. Credit spreads for benchmark IFC USD

issuance deteriorated by around 10 basis points in FY13 contributing to overall unrealized gains on market borrowings and associated derivatives of $32 million.

IFC reported net gains on derivatives associated with invest-ments (principally put options, stock options, conversion features, warrants and interest rate and currency swaps economically hedg-ing the fixed rate and/or non- US$ loan portfolio) of $390 million in FY13 (net losses of $13 million in FY12). Gains and losses are highly concentrated, with five derivatives accounting for $153 million of gains and five derivatives accounting for $73 million of losses in FY13 (five derivatives accounting for $113 million of gains and five derivatives accounting for $73 million of losses in FY12).

GRANTS TO IDADuring FY13, IFC recorded a grant to IDA of $340 million, as com-pared with $330 million in FY12.

other comprehensive income

UNREALIZED GAINS AND LOSSES ON EQUITY INVESTMENTS AND DEBT SECURITIESIFC’s investments in debt securities and equity investments that are listed in markets that provide readily determinable fair values are classified as available- for-sale, with unrealized gains and losses on such investments being reported in OCI until realized. When realized, the gain or loss is transferred to net income. Changes in unrealized gains and losses on equity investments and debt secu-rities reported in OCI are significantly impacted by (i) the global environment for emerging markets; and (ii) the realization of gains on sales of such equity investments and debt securities.

The net change in unrealized gains and losses on equity invest-ments and debt securities in OCI can be summarized as follows:

Fy13 FY12

Net unrealized gains and losses on equity investments arising during the year:

Unrealized gains $ 757 $ 290

Unrealized losses (396) (813)

Reclassification adjustment for realized gains and other- than-temporary impairments included in net income 24 277

Net unrealized gains and losses on equity investments $ 385 $ (246)

Net unrealized gains and losses on debt securities arising during the year



Reclassification adjustment for realized gains, non- credit related portion of impairments which were recognized in net income and other- than-temporary included in net income 29 14

Net unrealized gains and losses on debt securities $ 22 $ (259)

total unrealized gains and losses on equity investments and debt securities $ 407 $ (505)

UNRECOGNIZED NET ACTUARIAL GAINS AND LOSSES AND UNRECOGNIZED PRIOR SERVICE COSTS ON BENEFIT PLANSChanges in the funded status of pension and other postretirement benefit plans are recognized in OCI, to the extent they are not rec-ognized in net income under periodic benefit cost for the year.

During FY13, IFC experienced a gain of $201 million primarily due to $200 million of unrecognized net actuarial gains, result-ing from the increase in the discount rates used to determine the


projected benefit obligations and higher return on pension assets. The discount rate assumption used to determine the projected ben-efit obligation for the largest benefit plan, the Staff Retirement Plan, increased from 3.9% at June 30, 2012 to 4.6% at June 30, 2013.

Fy12 versus Fy11

net income

IFC reported income before net gains and losses on other non- trading financial instruments accounted for at fair value and grants to IDA of $1,877 million in FY12, as compared to $2,024 million in FY11.

The decrease in income before net gains and losses on other non- trading financial instruments accounted for at fair value and grants to IDA in FY12 when compared to FY11 was principally as a result of (US$ millions):

Increase (decrease)

FY12 vs FY11

Unrealized losses on equity investments accounted for at fair value $ (582)

Other- than-temporary impairments on equity investments (474)

Income from liquid asset trading activities (216)

Gains on non- monetary exchanges (214)


Advisory services expenses, net 132

Foreign currency transaction gains and losses on non- trading activities 178

Realized capital gains on equity investments 1,263

Other, net (77)


Net losses on other non- trading financial instruments accounted for at fair value totaled $219 million in FY12 (net gains of $155 million in FY11), resulting in income before grants to IDA of $1,658 mil-lion in FY12, as compared to $2,179 million in FY11. Grants to IDA totaled $330 million in FY12, as compared to $600 million in FY11. Accordingly, net income totaled $1,328 million in FY12, as com-pared with $1,579 million in FY11.

A more detailed analysis of the components of IFC’s net income follows.

INCOME FROM LOANS AND GUARANTEESIFC’s primary interest earning asset is its loan portfolio. Income from loans and guarantees for FY12 totaled $938 million, compared with $877 million in FY11, an increase of $61 million.

The disbursed loan portfolio grew by $1,159 million, from $19,884 million at June 30, 2011 to $21,043 million at June 30, 2012. The weighted average contractual interest rate on loans at June 30, 2012 was 4.7%, versus 4.6% at June 30, 2011. These factors resulted in $90 million higher interest income than in FY11. Commitment and financial fees were $12 million higher than in FY11. Recoveries of interest on loans removed from nonaccrual status, net of rever-sals of income on loans placed in nonaccrual status were $14 million higher than in FY11. Gain on sales of loan was $2 million as com-pared to no such gains in FY11. Income from IFC’s participation notes over and above minimum contractual interest and other income were $10 million higher than in FY11. Unrealized gains

on loans accounted for at fair value and gains on non- monetary exchanges were $67 million lower than in FY11.

INCOME FROM EQUITY INVESTMENTSIncome from the equity investment portfolio decreased by $7 mil-lion from an income of $1,464 million in FY11 to $1,457 million in FY12.

IFC generated record realized gains on sales of equity invest-ments for FY12 of $2,000 million, as compared with $737 million for FY11, an increase of $1,263 million. IFC sells equity investments where IFC’s developmental role was complete, and where predetermined sales trigger levels had been met and, where applicable, lock ups have expired.

Total realized gains on equity investments are concentrated — in FY12, 11 investments generated individual capital gains in excess of $20 million for a total of $1,821 million, or 91%, of the FY12 gains, compared to 10 investments generating individual capital gains in excess of $20 million for a total of $416 million, or 56%, of the FY11 gains.

Gains on non- monetary exchanges in FY12 totaled $3 million, as compared with $217 million in FY11. There were two large trans-actions that resulted in the recording of gains on non- monetary exchanges in FY11 that did not recur in FY12.

Dividend income totaled $274 million, as compared with $280 million in FY11. Consistent with FY11, a significant amount of IFC’s dividend income in FY12 was due to returns on IFC’s joint ventures in the oil, gas and mining sectors accounted for under the cost recovery method, which totaled $43 million in FY12, as com-pared with $57 million in FY11.

Other- than-temporary impairments on equity investments totaled $692 million in FY12 ($420 million on equity investments accounted for as available- for-sale; and $272 million on equity investments accounted for at cost less impairment), as compared with $218 million in FY11 ($131 million on equity investments accounted for as available- for-sale; and $87 million on equity investments accounted for at cost less impairment). In FY12, eight investments generated individual other- than-temporary impair-ments in excess of $20 million for a total of $298 million. In FY11, one investment generated an other- than-temporary impairment loss of $40 million. There were no other investments that generated an other- than-temporary impairment loss in excess of $20 million.

Unrealized losses on equity investments that are accounted for at fair value through net income in FY12 totaled $128 million, as compared with gains of $454 million in FY11. Seven investments in equity funds accounted for $146 million of the unrealized losses in FY12. Six investments in equity funds accounted for $199 mil-lion of the unrealized gains in FY11. Individual investments in such Funds provided a significant component of the unrealized gains and losses.

INCOME FROM DEBT SECURITIESIncome from debt securities increased to $81 million in FY12 from $46 million in FY11, an increase of $35 million. The largest compo-nents of the increase were higher interest income ($21 million) and higher unrealized gains on debt securities accounted for at fair value ($23 million) in FY12 when compared with FY11. Realized gains on debt securities were $14 million higher in FY12 as com-pared to FY11.


PROVISION FOR LOSSES ON LOANS AND GUARANTEESThe quality of IFC’s loan portfolio, as measured by average coun-try risk ratings and average credit risk ratings was substantially unchanged during FY12. By another measure, non- performing loans decreased from $943 million (4.7%) of the disbursed loan portfolio at June 30, 2011 to $859 million (4.1%) at June 30, 2012. IFC recorded provision for losses on loans and guarantees of $112 mil-lion in FY12 ($76 million specific provisions on loans, $39 million portfolio provisions on loans, and $3 million release of provision for losses on guarantees) as compared to release of provision of $40 million in FY11 ($16 million release in specific provisions, and $24 million release in portfolio provisions).

On June 30, 2012, IFC’s total reserves against losses on loans were 6.6% of the disbursed loan portfolio (6.6% at June 30, 2011).

Specific reserves against losses at June 30, 2012 of $447 million ($382 million at June 30, 2011) are held against impaired loans of $923 million ($918 million at June 30, 2011), a coverage ratio of 48% (42%).

INCOME FROM LIQUID ASSET TRADING ACTIVITIESIncome from liquid asset trading activities comprises interest from time deposits and securities, net gains and losses on trading activities, and a small currency effect. The liquid assets portfolio, net of derivatives and securities lending activities, increased from $24.5 billion at June 30, 2011, to $29.7 billion at June 30, 2012.

Income from liquid asset trading activities totaled $313 million in FY12 ($529 million in FY11). In FY12 and FY11, all liquid asset portfolios, except for the P7 portfolio (which has an NAV less than $10 million), outperformed their respective benchmarks.

In addition to interest income and foreign currency transaction gains of $648 million, the portfolio of ABS and MBS experienced fair value losses totaling $8 million in FY12. Holdings in other products, including US Treasuries, global government bonds, high quality corporate bonds and derivatives generated $327 million of losses in FY12.

At June 30, 2012, trading securities with a fair value of $150 mil-lion are classified as Level 3 securities ($210 million on June 30, 2011).

The P1 portfolio generated a return of $218 million in FY12, or 0.95%. In FY11, the P1 portfolio generated a return of $330 million, or 2.29%. The externally managed P3 portfolio, managed against the same variable rate benchmark as the P1 portfolio, returned $13 million in FY12, or 1.64%, $7 million higher than the $6 million, or 0.97% return in FY11.

The P2 and externally- managed P4 portfolios returned $60 million (1.15%) and $13 million (2.00%) in FY12, respectively, as compared to $179 million (3.33%) and $9 million (1.87%) in FY11, respectively.

IFC’s P0 portfolio earned $9 million in FY12, a total return of 0.47%, as compared to $4 million (0.44%) in FY11. The P7 portfolio earned less than $0.5 million (1.15%) in FY12 as compared to earn-ing $1 million (1.32%) in FY11.

CHARGES ON BORROWINGSIFC’s charges on borrowings increased by $41 million, from $140 million in FY11 to $181 million in FY12, largely reflecting the higher US dollar interest rate environment and increased level of borrowings, when comparing FY12 and FY11. During FY12, IFC

bought back $0.6 billion of its market borrowings ($0.3 billion in FY11). Charges on borrowings of $181 million in FY12 ($140 mil-lion in FY11) are reported net of gains on buybacks of $19 million ($10 million in FY11).

The weighted average rate of IFC’s borrowings outstanding from market sources, after the effects of borrowing- related deriv-atives, and excluding short- term borrowings issued under the Discount Note Program, rose during the year from 0.3% at June 30, 2011 to 0.7% at June 30, 2012. The size of the borrowings port-folio (excluding the short- term Discount Note Program), net of borrowing- related derivatives and before fair value adjustments, increased by $6.8 billion during FY12 from $33.9 billion at June 30, 2011, to $40.7 billion at June 30, 2012.

OTHER INCOMEOther income of $448 million for FY12 was $226 million higher than in FY11 ($222 million). Other income in FY12 includes income from the P6 local currency liquidity portfolio of $43 mil-lion (reported in income from liquid asset trading in FY13 and amounting to $44 million in FY11), management fees and service fee reimbursements from AMC of $28 million ($28 million in FY11) and income from advisory services of $269 million ($0 in FY11). In FY12, income from advisory services included $189 million contributed by donors and $25 million of fees from clients and administrative fees from donors.

OTHER EXPENSESAdministrative expenses (the principal component of other expenses) increased by $98 million from $700 million in FY11 to $798 million in FY12, driven largely by a 9% increase in staffing and, to a lesser extent, salary increases to existing staff. Administrative expenses include the grossing- up effect of certain revenues and expenses attributable to IFC’s reimbursable program and Jeopardy Projects ($22 million in FY12, as compared with $24 million in FY11). IFC recorded an expense from pension and other postre-tirement benefit plans in FY12 of $96 million, as compared with $109 million in FY11, a decrease driven by actuarial assumptions.

Advisory services expenses totaled $290 million in FY12 ($153 million in FY11). Advisory services expenses included $189 million of funds contributed by donors that were utilized in the provision of advisory services.

NET GAINS AND LOSSES ON OTHER NON- TRADING FINANCIAL INSTRUMENTSAs discussed in more detail in Note A to IFC’s FY12 Consolidated Financial Statements, IFC accounts for certain financial instru-ments at fair value with unrealized gains and losses on such financial instruments being reported in net income, namely: (i) all swapped market borrowings; and (ii) all equity investments in which IFC has greater than 20% holdings and/or equity and fund investments which, in the absence of the Fair Value Option, would be required to be accounted for under the equity method, and (iii) substantially all market borrowings. All other non- trading derivatives, including standalone and embedded derivatives in the loan, equity and debt security portfolios continue to be accounted for at fair value.


The resulting effects of fair value accounting for these non- trading financial instruments on net income in FY12 and FY11 are summarized as follows (US$ millions):

Fy12 FY11

Realized gains and losses on derivatives associated with investments $ 11 $ 63

Non- monetary gains on derivatives associated with investments 10 22

Unrealized gains and losses on derivatives associated with investments (34) (23)

Unrealized gains and losses on market borrowings and associated derivatives, net (206) 93

net gains and losses on other non- trading financial instruments accounted for at fair value $ (219) $ 155

Changes in the fair value of IFC’s market borrowings and asso-ciated derivatives, net includes the impact of changes in IFC’s own credit spread when measured against US$ LIBOR. As credit spreads widen, unrealized gains are recorded and when credit spreads nar-row, unrealized losses are recorded (notwithstanding the impact of other factors, such as changes in risk- free interest and foreign currency exchange rates). The magnitude and direction (gain or loss) can be volatile from period to period but do not alter cash flow. IFC’s policy is to generally match currency, amount and timing of cash flows on market borrowings with cash flows on associated derivatives entered into contemporaneously.

In FY11, the trend decline in global interest rate paused tempo-rarily in the second quarter of the year and interest rates remained stable at low levels subsequently. Credit spreads were little changed throughout FY11 and resulting pricing was at around LIBOR flat for IFC’s benchmark US$ global bond offerings. In FY10, credit spreads remained elevated relative to the levels that prevailed before FY09. As a result, IFC reported unrealized gains for FY11 of $93 million, as compared to unrealized losses of $226 million in FY10.

In FY12, unsettled conditions in European sovereign debt markets and renewed signs of flagging economic activity were accompanied by further interest rate declines from already low levels. Risk appe-tites in the capital markets receded, as evidenced by some flight to quality along the credit spectrum. This led to better pricing for AAA IFC issues which in FY11 sat at around LIBOR flat, but moved back to 5 to 10 basis points below LIBOR by the end of FY12. This develop-ment, along with movements in foreign exchange basis swap rates, resulted in adverse after swap revaluations on IFC’s financial state-ments and IFC reported unrealized losses for FY12 of $206 million, as compared to unrealized gains of $93 million in FY11.

IFC reported net losses on derivatives associated with invest-ments (principally put options, stock options, conversion features, warrants and swaps associated with loans) of $13 million in FY12 (net gains of $62 million in FY11). Gains and losses are highly con-centrated, with five derivatives accounting for $113 million of gains and five derivatives accounting for $73 million of losses in FY12 (five derivatives accounting for $140 million of gains and five derivatives accounting for $58 million of losses in FY11).

GRANTS TO IDADuring FY12, IFC recorded a grant to IDA of $330 million, as com-pared with $600 million in FY11.

other comprehensive income

UNREALIZED GAINS AND LOSSES ON EQUITY INVESTMENTS AND DEBT SECURITIESIFC’s investments in debt securities and equity investments that are listed in markets that provide readily determinable fair values at fair value are classified as available- for-sale, with unrealized gains and losses on such investments being reported in OCI until real-ized. When realized, the gain or loss is transferred to net income. Changes in unrealized gains and losses on equity investments and debt securities reported in OCI are significantly impacted by (i) the global environment for emerging markets; and (ii) the realization of gains on sales of such equity investments and debt securities.

The net change in unrealized gains and losses on equity invest-ments and debt securities in OCI can be summarized as follows:

Fy12 FY11

Net unrealized gains and losses on equity investments arising during the year:



Reclassification adjustment for realized gains and impairments included in net income 277 (274)

Net unrealized gains and losses on equity investments $ (246) $ 114

Net unrealized gains and losses on debt securities arising during the year



Reclassification adjustment for realized gains, non credit- related portion of impairments which were recognized in net income and impairments included in net income 14 4

Net unrealized gains and losses on debt securities $ (259) $ 141

total unrealized gains and losses on equity investments and debt securities $ (505) $ 255

UNRECOGNIZED NET ACTUARIAL GAINS AND LOSSES AND UNRECOGNIZED PRIOR SERVICE COSTS ON BENEFIT PLANSChanges in the funded status of pension and other postretirement benefit plans are recognized in OCI, to the extent they are not rec-ognized in net income under periodic benefit cost for the year.

During FY12, IFC experienced a loss of $525 million primarily due to the following factors:

Unrecognized net actuarial losses on benefits plans: $501 million of unrecognized net actuarial losses, primarily due to the decrease in the discount rates used to determine the projected benefit obli-gations and lower return on pension assets. The discount rate assumption used to determine the projected benefit obligation for the largest benefit plan, the Staff Retirement Plan, decreased from 5.3% at June 30, 2011 to 3.9% at June 30, 2012.

Unrecognized net prior service cost on benefit plans: $24 million of unrecognized prior service cost, primarily due to an amendment made to the pension plan. See notes to FY12 Consolidated Financial Statements — Note W — Pension and Other Postretirement Benefits for further details.


viii. governance anD control

senior ManageMent cHanges

The following changes occurred in the Senior Management of IFC since June 30, 2012:

Dr. Jim Yong Kim became President, effective July 1, 2012.Mr. Thierry Tanoh retired as Vice President, Sub- Saharan Africa,

Latin America and the Caribbean, and Western Europe, effective July 16, 2012. Mr. Bernard Sheahan, Director, Global Infrastructure and Natural Resources, was appointed Acting Vice President, Sub- Saharan Africa, Latin America and the Caribbean, and Western Europe, effective July 16, 2012 and ending on February 14, 2013.

Mr. Jin- Yong Cai became Executive Vice President and CEO, effective October 1, 2012.

Ms. Rachel Robbins retired as Vice President and General Counsel, effective October 31, 2012. Mr. David Harris, Deputy General Counsel, was Acting Vice President and General Counsel, effective November 1, 2012 and ending on March 31, 2013.

Mr. Jean Philippe Prosper became Vice President, Sub- Saharan Africa, Latin America and the Caribbean, effective February 15, 2013.

Mr. Dimitris Tsitsiragos’ title changed from Vice President, Eastern Europe, Central Asia, Middle East and North Africa to Vice President, Europe, Central Asia, Middle East and North Africa, effective February 15, 2013.

Ms. Saadia Khairi’s title changed from Vice President, Risk, Finance and Strategy to Vice President, Risk Management and Reporting, effective February 15, 2013.

Mr. Rashad Kaldany’s title changed from Vice President, Global Industries to Vice President and Chief Operating Officer, effective February 15, 2013.

Mr. Ethiopis Tafara was appointed IFC’s Vice President and General Counsel, effective April 1, 2013.

Ms. Dorothy Berry retired as Vice President, Human Resources, Communications, and Administration, effective June 30, 2013. The position of Vice President, Human Resources, Communications, and Administration will not be filled. Effective July 1, 2013, Human Resource services to IFC will be provided by the World Bank Group Integrated Services, and IFC Human Resources business partners, under the leadership of Sean McGrath.

Mr. Rashad Kaldany, Vice President and Chief Operating Officer will retire from IFC on September 6, 2013 whereupon the positions will not be filled.

general governance

IFC’s decision- making structure consists of the Board of Governors, the Board of Directors, the President, the Executive Vice President and CEO, other officers and staff. The Board of Governors is the highest decision- making authority. Governors are appointed by their member governments for a five- year term, which is renew-able. The Board of Governors may delegate authority to the Board of Directors to exercise any of its powers, except those reserved to the Board of Governors under the Articles of Agreement.

BoarD MeMBersHip

In accordance with its Articles of Agreement, members of the Board of Directors are appointed or elected every two years by their mem-ber governments. Currently, the Board of Directors is composed of 25 Directors. These Directors are neither officers nor staff of IFC. The President is the only member of the Board of Directors from management, serving as a non- voting member and as Chairman of the Board of Directors.

The Board of Directors has established several Committees including:

» Audit Committee » Budget Committee » Committee on Development Effectiveness » Committee on Governance and Executive Directors’ Administrative Matters » Ethics Committee » Human Resources Committee

The Board of Directors and their Committees function in contin-uous session at the principal offices of IBRD, as business requires. Each Committee’s terms of reference establishes its respective roles and responsibilities. As Committees do not vote on issues, their role is primarily to serve the Board of Directors in discharging its responsibilities.

The Board of Directors considers proposals made by the President on the use of IFC’s net income: retained earnings and designation of retained earnings and is responsible for the conduct of the general operations of IFC. The Directors are also responsible for presenting to the Board of Governors, at the Annual meetings, audited accounts, an administrative budget, and an annual report on operations and policies as well as other matters.

auDit coMMittee

Membership

The Audit Committee consists of eight Directors. Membership on the Audit Committee is determined by the Board of Directors, based upon nominations by the Chairman of the Board of Directors, fol-lowing informal consultation with the Directors.

Key responsibilities

The Audit Committee is appointed by the Board of Directors to assist it in the oversight and assessment of IFC’s finances and accounting, including the effectiveness of financial policies, the integrity of financial statements, the system of internal controls regarding finance, accounting and ethics (including fraud and corruption), and financial and operational risks. The Audit Com-mittee also has the responsibility for reviewing the performance and recommending to the Board of Directors the appointment of the external auditor, as well as monitoring the independence of the external auditor. The Audit Committee participates in oversight of the internal audit function and reviews the annual internal audit plan. In the execution of its role, the Audit Committee discusses with management, the external auditors, and the internal auditors, financial issues and policies which have a bearing on IFC’s finan-cial position and risk- bearing capacity. The Committee also reviews with the external auditor the financial statements prior to their publication and recommends the annual audited financial state-ments for approval to the Board of Directors. The Audit Committee


monitors the evolution of developments in corporate governance and the role of audit committees on an ongoing basis and updated its terms of reference in July 2009.

executive sessions

Under the Audit Committee’s terms of reference, members of the Audit Committee may convene in executive session at any time, without management present. It meets separately in executive ses-sion with the external and internal auditors.

access to resources and to Management

Throughout the year, the Audit Committee receives a large volume of information, which supports the execution of its duties. The Audit Committee meets both formally and informally through-out the year to discuss relevant matters. The Audit Committee has complete access to management and reviews and discusses with management topics contemplated in their Terms of Reference.

The Audit Committee has the capacity, under exceptional cir-cumstances, to obtain advice and assistance from outside legal, accounting or other advisors as deemed appropriate.

Business conDuct

IFC promotes a positive work environment where staff members understand their ethical obligations to the institution, which are embodied in its Core Values and Principles of Staff Employment. In support of this commitment, the institution has in place a code of conduct, entitled Living our Values (the Code). The Code applies to all World Bank Group staff worldwide and is available on www.worldbank.org.

In addition to the Code, Staff and Administrative Manuals, guid-ance for staff is also provided through programs, training materials, and other resources. Managers are responsible for ensuring that internal systems, policies, and procedures are consistently aligned with the IFC’s business conduct framework.

There exists both an Ethics HelpLine and a Fraud and Corruption hotline. A third- party service offers numerous methods of world-wide communication. Reporting channels include: phone, mail, email, or through confidential submission through a website.

IFC has in place procedures for the receipt, retention and handling of recommendations and concerns relating to business conduct identified during accounting, internal control and audit-ing processes.

Staff Rules clarify and codify the obligations of staff in reporting suspected fraud, corruption or other misconduct that may threaten operations or governance of the Corporation. Additionally, these rules offer protection from retaliation.

auDitor inDepenDence

The appointment of the external auditor of IFC is governed by a set of Board of Director- approved principles. Key features of those principles include:

» Prohibition of the external auditor from the provision of all non audit- related services. » All audit- related services must be pre- approved on a case- by-case basis by the Board of Directors, upon recommendation of the Audit Committee. » Mandatory rebidding of the external audit contract every five years, with a limitation of two consecutive terms and mandatory rotation thereafter.

External auditors are appointed to a five- year term of service. This is subject to annual reappointment based on the recommen-dation of the Audit Committee and approval of a resolution by the Board of Directors. In FY14, KPMG LLP will begin a second five- year term as IFC’s external auditor.

Communication between the external auditor and the Audit Committee is ongoing, as frequently as is deemed necessary by either party. The Audit Committee meets periodically with the external auditor, and individual members of the Audit Committee have independent access to the external auditor. IFC’s external auditors also follow the communication requirements with audit committees set out under generally accepted auditing standards in the United States of America.

internal control

internal control over Financial reporting

Management makes an annual assertion whether, as of June 30 of each fiscal year, its system of internal control over its external financial reporting has met the criteria for effective internal con-trol over external financial reporting as described in the Internal Control- Integrated Framework issued in 1992 by the Committee of Sponsoring Organizations of the Treadway Commission.

Concurrently, IFC’s external auditor provides an attestation report on whether management’s assertion regarding the effective-ness of internal control over external financial reporting is fairly stated in all material respects.

For each fiscal year, management performs an evaluation of internal control over external financial reporting for the purpose of determining if there are any changes made in internal controls during the fiscal year covered by the report that materially affect, or would be reasonably likely to materially affect IFC’s internal con-trol over external financial reporting. As of June 30, 2013, no such changes had occurred.

Disclosure controls and procedures

Disclosure controls and procedures are those processes which are designed to ensure that information required to be disclosed is accumulated and communicated to management as appropriate, to allow timely decisions regarding required disclosure by IFC. Management has undertaken an evaluation of the effectiveness of such controls and procedures. Based on that evaluation, man-agement has concluded that these controls and procedures were effective as of June 30, 2013.


INTERNNATIONAL FFINANCE COORPORATIOON

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INTERNNATIONAL FFINANCE COORPORATIOON Page 440

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INTERNNATIONAL FFINANCE COORPORATIOON Page 4

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NATIONAL FFINANCE COORPORATIOON Page 4

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INTERNATIONAL FINANCE CORPORATION

The notes to the Consolidated Financial Statements are an integral part of these statements

CONSOLIDATED BALANCE SHEETS as of June 30, 2013 and June 30, 2012

(US$ millions)

2013 2012 Assets Cash and due from banks .......................................................................................................... $ 616 $ 1,328 Time deposits ............................................................................................................................ 5,889 5,719 Trading securities - Notes C and R ........................................................................................... 30,349 28,868 Securities purchased under resale agreements ........................................................................ 337 964

Investments - Notes B, D, E, F, R and U Loans ($493 - June 30, 2013 and $591 - June 30, 2012 at fair value; $43 - June 30, 2013 and $60 - June 30, 2012 at lower of cost or fair value; net of reserve against losses of $1,628 - June 30, 2013 and $1,381 - June 30, 2012) - Notes D, E and R ............................................................................................................. 20,831 19,496 Equity investments ($8,576 - June 30, 2013 and $6,708 - June 30, 2012 at fair value) - Notes B, D and R ... 11,695 9,774

Debt securities - Notes D, F and R ........................................................................................ 2,151 2,168 Total investments .......................................................................................................... 34,677 31,438 Derivative assets - Notes Q and R ............................................................................................ 3,376 4,615 Receivables and other assets - Note J ...................................................................................... 2,281 2,829 Total assets ..................................................................................................................... $ 77,525 $ 75,761 Liabilities and capital Liabilities Securities sold under repurchase agreements ...................................................................... $ 5,736 $ 6,397 Borrowings outstanding - Notes K and R .............................................................................. From market sources at amortized cost ........................................................................... 1,715 1,777 From market sources at fair value ..................................................................................... 42,924 42,846 From International Bank for Reconstruction and Development at amortized cost ............ 230 42 Total borrowings ........................................................................................................... 44,869 44,665 Derivative liabilities - Notes Q and R ..................................................................................... 2,310 1,261 Payables and other liabilities - Note L ................................................................................... 2,335 2,858 Total liabilities ................................................................................................................... 55,250 55,181 Capital Capital stock, authorized (2,580,000 - June 30, 2013 and June 30, 2012)

shares of $1,000 par value each - Note M Subscribed and paid-in ................................................................................................ 2,403 2,372

Accumulated other comprehensive income - Note O ............................................................ 1,121 513

Retained earnings - Note O ................................................................................................... 18,713 17,695 Total IFC capital ........................................................................................................... 22,237 20,580 Noncontrolling interests ......................................................................................................... 38 - Total capital .................................................................................................................. 22,275 20,580 Total liabilities and capital ........................................................................................... $ 77,525 $ 75,761

36 _



CONSOLIDATED INCOME STATEMENTS for each of the three years ended June 30, 2013

(US$ millions)

2013 2012 2011 Income from investments Income from loans and guarantees - Note E ............................................................ $ 1,059 $ 938 $ 877 (Provision) release of provision for losses on loans, guarantees and other receivables - Note E ............................................................................. (243) (117) 40 Income from equity investments - Note G ................................................................. 752 1,457 1,464 Income from debt securities - Note F ........................................................................ 5 81 46 Total income from investments ..................................................................... 1,573 2,359 2,427 Income from liquid asset trading activities - Note C ..................................................... 500 313 529 Charges on borrowings - Note K .................................................................................. (220) (181) (140) Income from investments and liquid asset trading activities, after charges on borrowings .............................................................................. 1,853 2,491 2,816 Other income Service fees ............................................................................................................. 101 60 88 Advisory services income ......................................................................................... 239 269 - Other - Notes B and N ............................................................................................. 101 119 134 Total other income ............................................................................................. 441 448 222 Other expenses Administrative expenses - Note X ............................................................................ (845) (798) (700) Advisory services expenses ..................................................................................... (351) (290) (153) Expense from pension and other postretirement benefit plans - Note W ................ (173) (96) (109) Other - Note B ........................................................................................................... (32) (23) (19) Total other expenses ......................................................................................... (1,401) (1,207) (981) Foreign currency transaction gains and losses on non-trading activities ...................... 35 145 (33) Income before net gains and losses on other non-trading financial instruments accounted for at fair value and grants to IDA............................ 928 1,877 2,024 Net gains and losses on other non-trading financial instruments accounted for at fair value - Note P Realized gains .......................................................................................................... 35 11 63 Gains on non-monetary exchanges ......................................................................... 2 10 22 Unrealized gains (losses) .......................................................................................... 385 (240) 70 Total net gains (losses) on other non-trading financial instruments accounted for at fair value ............................................................................. 422 (219) 155 Income before grants to IDA ................................................................................... 1,350 1,658 2,179 Grants to IDA - Note O .................................................................................................. (340) (330) (600) Net income ............................................................................................................... $ 1,010 $ 1,328 $ 1,579 Less: Net loss attributable to noncontrolling interests ................................................... 8 - - Net income attributable to IFC ............................................................................... $ 1,018 $ 1,328 $ 1,579

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME for each of the three years ended June 30, 2013

(US$ millions)

2013 2012 2011 Net income attributable to IFC ................................................................................... $ 1,018 $ 1,328 $ 1,579 Other comprehensive income (loss) Unrealized gains and losses on debt securities Net unrealized (losses) gains on available-for-sale debt securities arising during the year ...................................................................................................... (7) (273) 137 Add (less): reclassification adjustment for realized (gains) losses included in net income .............................................................................. (10) (12) 2 Less: reclassification adjustment for gains on non-monetary exchanges included in net income .............................................................................. (7) (1) - Add: reclassification adjustment for other-than-temporary impairments included in net income .............................................................................. 46 27 2 Net unrealized gains (losses) on debt securities ......................................... 22 (259) 141 Unrealized gains and losses on equity investments Net unrealized gains (losses) on available-for-sale equity investments arising during the year ...................................................................................................... 361 (523) 388 Less: reclassification adjustment for realized gains included in net income ......... (265) (143) (405) Add: reclassification adjustment for other-than-temporary impairments included in net income .............................................................................. 289 420 131 Net unrealized gains (losses) on equity investments ................................. 385 (246) 114 Net unrecognized actuarial gains (losses) and unrecognized prior service credits (costs) on benefit plans ........................................................................ 201 (525) 86 Total other comprehensive income (loss) ........................................................... 608 (1,030) 341 Total comprehensive income ..................................................................... $ 1,626 $ 298 $ 1,920

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CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL for each of the three years ended June 30, 2013

(US$ millions)

Attributable to IFC

Undesignated

Retained earnings

Designated retained earnings

Total retained earnings

Accumulated other

comprehensive income - Note O

Capital stock

Total IFC capital

Non-controlling interests

Total capital

At June 30, 2010 $ 14,307 $ 481 $ 14,788 $ 1,202 $ 2,369 $ 18,359 $ - $ 18,359 Year ended June 30, 2011 Net income

attributable to IFC 1,579 1,579 1,579 1,579 Other comprehensive

income attributable to IFC 341 341 341

Designation of retained earnings - Note O (610) 610 - - -

Expenditures against designated retained

earnings - Note O 756 (756) - - - At June 30, 2011 $ 16,032 $ 335 $ 16,367 $ 1,543 $ 2,369 $ 20,279 $ - $ 20,279 Year ended June 30, 2012 Net income


loss attributable to IFC (1,030) (1,030) (1,030)


Payments received for IFC capital stock subscribed 3 3 3


earnings - Note O 412 (412) - - - At June 30, 2012 $ 17,373 $ 322 $ 17,695 $ 513 $ 2,372 $ 20,580 $ - $ 20,580

Year ended June 30, 2013 Net income


income attributable to IFC 608 608 608

Payments received for IFC capital stock subscribed 31 31 31



earnings - Note O 464 (464) - - - Noncontrolling

interests issued - 46 46 Net loss attributable

to noncontrolling interests - (8) (8)

At June 30, 2013 $ 18,435 $ 278 $ 18,713 $ 1,121 $ 2,403 $ 22,237 $ 38 $ 22,275

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CONSOLIDATED STATEMENTS OF CASH FLOWS for each of the three years ended June 30, 2013

(US$ millions) 2013 2012 2011 Cash flows from investing activities Loan disbursements ................................................................................................. $ (6,940) $ (5,651) $ (4,519) Investments in equity securities ................................................................................ (2,549) (1,810) (1,884) Investments in debt securities .................................................................................. (523) (520) (312) Loan repayments ..................................................................................................... 5,321 3,733 3,297 Debt securities repayments ..................................................................................... 377 231 72 Proceeds from sales of loans .................................................................................... - 10 26 Proceeds from sales of equity investments .............................................................. 1,502 2,452 1,433 Proceeds from sales of debt securities .................................................................... 35 56 12 Net cash used in investing activities ............................................................ (2,777) (1,499) (1,875) Cash flows from financing activities Medium and long-term borrowings New issues ........................................................................................................... 12,718 11,636 9,882 Retirement ............................................................................................................ (9,481) (5,182) (5,139) Medium and long-term borrowings related derivatives, net .................................. 401 329 410

Short-term borrowings, net ....................................................................................... (337) (49) 43 Capital subscriptions ................................................................................................. 31 3 -

Noncontrolling interests issued ................................................................................. 46 - - Net cash provided by financing activities ................................................... 3,378 6,737 5,196 Cash flows from operating activities Net income attributable to IFC .................................................................................. 1,018 1,328 1,579 Add: Net loss attributable to noncontrolling interests ................................................ (8) - - Net income ............................................................................................................... 1,010 1,328 1,579 Adjustments to reconcile net income to net cash used in operating activities: Gains on non-monetary exchanges of loans ........................................................ (20) (78) (9) Realized gains on debt securities and gains on non-monetary exchanges.......... (17) (13) (2) Realized gains on equity investments and gains on non-monetary exchanges ... (927) (2,003) (954) Unrealized (gains) losses on loans accounted for at fair value ............................ (35) 57 (79) Unrealized losses (gains) on debt securities accounted for at fair value … ......... 39 (21) 2 Unrealized (gains) losses on equity investments ................................................. (26) 128 (454) Provision (release of provision) for losses on loans and guarantees ................... 243 117 (40) Other-than-temporary impairments on debt securities ......................................... 46 27 2 Other-than-temporary impairments on equity investments ................................... 441 692 218 Net discounts paid on retirement of borrowings………………………………….. .. (2) (1) (3) Net realized gains on extinguishment of borrowings ............................................ (11) (19) (10) Foreign currency transaction (gains) losses on non-trading activities .................. (35) (145) 33 Net (gains) losses on other non-trading financial instruments accounted for at fair value ................................................................................ (422) 219 (155) Change in accrued income on loans, time deposits and securities ..................... 18 (48) 51 Change in payables and other liabilities .............................................................. (666) 1,171 354 Change in receivables and other assets .............................................................. 696 (331) 138 Change in trading securities and securities purchased and sold under resale and repurchase agreements .................................................................. (1,800) (5,211) (4,722) Net cash used in operating activities .......................................................... (1,468) (4,131) (4,051) Change in cash and cash equivalents ......................................................................... (867) 1,107 (730) Effect of exchange rate changes on cash and cash equivalents ................................. 325 473 234 Net change in cash and cash equivalents ................................................................... (542) 1,580 (496) Beginning cash and cash equivalents .......................................................................... 7,047 5,467 5,963 Ending cash and cash equivalents .......................................................................... $ 6,505 $ 7,047 $ 5,467 Composition of cash and cash equivalents Cash and due from banks ......................................................................................... $ 616 $ 1,328 $ 642 Time deposits ........................................................................................................... 5,889 5,719 4,825 Total cash and cash equivalents .......................................................................... $ 6,505 $ 7,047 $ 5,467

40 _



CONSOLIDATED STATEMENTS OF CASH FLOWS for each of the three years ended June 30, 2013

(US$ millions) 2013 2012 2011 Supplemental disclosure Change in ending balances resulting from currency exchange rate fluctuations: Loans outstanding ............................................................................................... $ 21 $ (675) $ 601 Debt securities ..................................................................................................... (19) (221) 142 Loan and debt security-related currency swaps .................................................. 63 915 (699) Borrowings ............................................................................................................ 1,868 1,282 (2,358) Borrowing-related currency swaps ...................................................................... (1,876) (1,275) 2,327 Client risk management-related currency swaps .................................................. - - (6) Charges on borrowings paid, net .............................................................................. $ 277 $ 139 $ 159 Non-cash items: Loan and debt securities conversion to equity, net .............................................. $ 77 $ 90 $ 75 Increase in net assets due to exchange, recorded at fair value, of equity investment for non-cash asset ........................................................... $ 217 $ - $ -

_ 41



CONSOLIDATED STATEMENT OF CAPITAL STOCK AND VOTING POWER

as of June 30, 2013 (US$ thousands)

Members

Capital Stock Voting PowerAmount

paid Percent of total

Number of votes

Percent of total

Afghanistan ............................. 111 * 878 0.03 Albania .................................... 1,302 0.05 2,069 0.08 Algeria ..................................... 5,621 0.23 6,388 0.25 Angola ..................................... 1,481 0.06 2,248 0.09 Antigua and Barbuda .............. 13 * 780 0.03 Argentina ................................. 38,129 1.59 38,896 1.53 Armenia ................................... 992 0.04 1,759 0.07 Australia .................................. 47,329 1.97 48,096 1.89 Austria ..................................... 19,741 0.82 20,508 0.81 Azerbaijan ............................... 2,367 0.1 3,134 0.12 Bahamas, The ………………... 335 0.01 1,102 0.04 Bahrain ………………………… 1,746 0.07 2,513 0.1 Bangladesh …………………… 9,037 0.38 9,804 0.39 Barbados ……………………… 361 0.02 1,128 0.04 Belarus .................................... 5,162 0.21 5,929 0.23 Belgium ................................... 50,610 2.11 51,377 2.02 Belize ...................................... 101 * 868 0.03 Benin …………………………... 119 * 886 0.03 Bhutan …………………………. 720 0.03 1,487 0.06 Bolivia …………………………. 1,902 0.08 2,669 0.1 Bosnia and Herzegovina ……. 620 0.03 1,387 0.05 Botswana ……………………… 113 * 880 0.03 Brazil …………………………... 39,479 1.64 40,246 1.58 Bulgaria ……………………….. 4,867 0.2 5,634 0.22 Burkina Faso ........................... 836 0.03 1,603 0.06 Burundi .................................... 100 * 867 0.03 Cambodia ................................ 339 0.01 1,106 0.04 Cameroon ............................... 885 0.04 1,652 0.06 Canada ………………………... 81,342 3.38 82,109 3.23 Cape Verde …………………… 15 * 782 0.03 Central African Republic ……. 119 * 886 0.03 Chad …………………………… 1,364 0.06 2,131 0.08 Chile …………………………… 11,710 0.49 12,477 0.49 China ………………………….. 43,047 1.79 43,814 1.72 Colombia ……………………… 12,606 0.52 13,373 0.53 Comoros ………………………. 14 * 781 0.03 Congo, Dem. Rep. of ……….. 2,159 0.09 2,926 0.12 Congo, Republic of …………... 131 0.01 898 0.04 Costa Rica .............................. 952 0.04 1,719 0.07 Côte d'Ivoire ............................ 3,544 0.15 4,311 0.17 Croatia .................................... 2,882 0.12 3,649 0.14 Cyprus …………………………. 2,139 0.09 2,906 0.11 Czech Republic ………………. 8,913 0.37 9,680 0.38 Denmark ………………………. 18,554 0.77 19,321 0.76 Djibouti ………………………… 21 * 788 0.03 Dominica ................................. 42 * 809 0.03 Dominican Republic ................ 1,187 0.05 1,954 0.08 Ecuador ................................... 2,161 0.09 2,928 0.12 Egypt, Arab Republic of .......... 12,360 0.51 13,127 0.52 El Salvador .............................. 29 * 796 0.03 Equatorial Guinea ................... 43 * 810 0.03 Eritrea ..................................... 935 0.04 1,702 0.07 Estonia .................................... 1,434 0.06 2,201 0.09 Ethiopia ………………………... 127 0.01 894 0.04 Fiji ……………………………… 287 0.01 1,054 0.04 Finland ………………………… 15,697 0.65 16,464 0.65 France …………………………. 121,015 5.04 121,782 4.79 Gabon …………………………. 1,268 0.05 2,035 0.08 Gambia, The ………………….. 94 * 861 0.03 Georgia ………………………... 1,380 0.06 2,147 0.08 Germany ………………………. 128,908 5.36 129,675 5.1 Ghana …………………………. 5,071 0.21 5,838 0.23 Greece .................................... 6,898 0.29 7,665 0.3 Grenada .................................. 74 * 841 0.03 Guatemala .............................. 1,084 0.05 1,851 0.07 Guinea .................................... 339 0.01 1,106 0.04 Guinea-Bissau ........................ 18 * 785 0.03 Guyana ………………………... 1,392 0.06 2,159 0.08 Haiti ……………………………. 822 0.03 1,589 0.06 Honduras ……………………… 495 0.02 1,262 0.05 Hungary ………………………. 10,932 0.45 11,699 0.46 Iceland ………………………… 42 * 809 0.03 India ……………………………. 81,342 3.38 82,109 3.23 Indonesia ……………………… 29,384 1.22 30,151 1.19 Iran, Islamic Republic of …….. 1,444 0.06 2,211 0.09 Iraq …………………………….. 147 0.01 914 0.04 Ireland …………………………. 1,290 0.05 2,057 0.08 Israel …………………………… 2,135 0.09 2,902 0.11 Italy ……………………………. 81,342 3.38 82,109 3.23 Jamaica ……………………….. 4,282 0.18 5,049 0.2 Japan ………………………….. 141,174 5.87 141,941 5.58 Jordan …………………………. 941 0.04 1,708 0.07 Kazakhstan …………………… 4,637 0.19 5,404 0.21 Kenya …………………………. 4,041 0.17 4,808 0.19 Kiribati ………………………… 12 * 779 0.03 Korea, Republic of …………… 22,020 0.92 22,787 0.9 Kosovo ………………………… 1,454 0.06 2,221 0.09 Kuwait …………………………. 9,947 0.41 10,714 0.42 Kyrgyz Republic ……………… 1,720 0.07 2,487 0.1 Lao People's Dem. Rep. …….. 278 0.01 1,045 0.04 Latvia ………………………….. 2,150 0.09 2,917 0.11 Lebanon ……………………….. 135 0.01 902 0.04

* Less than .005 percent + May differ from the sum of the individual percentages shown because of rounding

Members

Capital Stock Voting PowerAmount

paid Percent of total

Number of votes

Percent of total

Lesotho ………………………... 71 * 838 0.03 Liberia …………………………. 83 * 850 0.03 Libya …………………………… 55 * 822 0.03 Lithuania ………………………. 2,341 0.1 3,108 0.12 Luxembourg…………………… 2,139 0.09 2,906 0.11 Macedonia, FYR of …………... 536 0.02 1,303 0.05 Madagascar …………………... 432 0.02 1,199 0.05 Malawi …………………………. 1,822 0.08 2,589 0.1 Malaysia ………………………. 15,222 0.63 15,989 0.63 Maldives ………………………. 16 * 783 0.03 Mali …………………………….. 451 0.02 1,218 0.05 Malta …………………………… 1,615 0.07 2,382 0.09 Marshall Islands ……………… 663 0.03 1,430 0.06 Mauritania …………………….. 214 0.01 981 0.04 Mauritius ………………………. 1,665 0.07 2,432 0.1 Mexico …………………………. 27,589 1.15 28,356 1.11 Micronesia, Fed. States of…… 744 0.03 1,511 0.06 Moldova ……………………….. 1,192 0.05 1,959 0.08 Mongolia ………………………. 144 0.01 911 0.04 Montenegro …………………… 1,035 0.04 1,802 0.07 Morocco ……………………….. 9,632 0.4 10,399 0.41 Mozambique ………………….. 322 0.01 1,089 0.04 Myanmar ………………………. 666 0.03 1,433 0.06 Namibia ……………………….. 404 0.02 1,171 0.05 Nepal …………………………... 822 0.03 1,589 0.06 Netherlands …………………… 56,131 2.34 56,898 2.24 New Zealand ………………….. 3,583 0.15 4,350 0.17 Nicaragua ……………………... 715 0.03 1,482 0.06 Niger …………………………… 147 0.01 914 0.04 Nigeria …………………………. 21,643 0.9 22,410 0.88 Norway ………………………… 17,599 0.73 18,366 0.72 Oman ………………………….. 1,187 0.05 1,954 0.08 Pakistan ……………………….. 19,380 0.81 20,147 0.79 Palau …………………………... 25 * 792 0.03 Panama ……………………….. 1,007 0.04 1,774 0.07 Papua New Guinea ………….. 1,147 0.05 1,914 0.08 Paraguay ……………………… 436 0.02 1,203 0.05 Peru ……………………………. 6,898 0.29 7,665 0.3 Philippines …………………….. 13,653 0.57 14,420 0.57 Poland …………………………. 7,236 0.3 8,003 0.31 Portugal ……………………….. 8,324 0.35 9,091 0.36 Qatar …………………………... 1,650 0.07 2,417 0.09 Romania ………………………. 2,661 0.11 3,428 0.13 Russian Federation ………….. 81,342 3.38 82,109 3.23 Rwanda ……………………….. 306 0.01 1,073 0.04 Samoa …………………………. 35 * 802 0.03 Sao Tome and Principe ……… 439 0.02 1,206 0.05 Saudi Arabia ………………….. 30,062 1.25 30,829 1.21 Senegal ……………………….. 2,299 0.1 3,066 0.12 Serbia ………………………….. 1,803 0.08 2,570 0.1 Seychelles …………………….. 27 * 794 0.03 Sierra Leone ………………….. 223 0.01 990 0.04 Singapore ……………………... 177 0.01 944 0.04 Slovak Republic ………………. 4,457 0.19 5,224 0.21 Slovenia ……………………….. 1,585 0.07 2,352 0.09 Solomon Islands ……………… 37 * 804 0.03 Somalia ………………………... 83 * 850 0.03 South Africa …………………… 17,418 0.72 18,185 0.71 South Sudan ………………….. 1,880 0.08 2,647 0.1 Spain …………………………... 37,026 1.54 37,793 1.49 Sri Lanka ……………………… 7,135 0.3 7,902 0.31 St. Kitts and Nevis …………… 638 0.03 1,405 0.06 St. Lucia ……………………….. 74 * 841 0.03 Sudan ………………………….. 111 * 878 0.03 Suriname ……………………… 620 0.03 1,387 0.05 Swaziland ……………………... 684 0.03 1,451 0.06 Sweden ………………………... 26,876 1.12 27,643 1.09 Switzerland ……………………. 44,063 1.83 44,830 1.76 Syrian Arab Republic ………… 194 0.01 961 0.04 Tajikistan ……………………… 1,212 0.05 1,979 0.08 Tanzania ………………………. 1,003 0.04 1,770 0.07 Thailand ……………………….. 11,201 0.47 11,968 0.47 Timor-Leste …………………… 777 0.03 1,544 0.06 Togo …………………………… 808 0.03 1,575 0.06 Tonga ………………………….. 34 * 801 0.03 Trinidad and Tobago ………… 4,112 0.17 4,879 0.19 Tunisia ………………………… 3,566 0.15 4,333 0.17 Turkey …………………………. 14,545 0.61 15,312 0.6 Turkmenistan …………………. 810 0.03 1,577 0.06 Uganda ………………………... 735 0.03 1,502 0.06 Ukraine ………………………… 9,505 0.4 10,272 0.4 United Arab Emirates ………... 4,033 0.17 4,800 0.19 United Kingdom ………………. 121,015 5.04 121,782 4.79 United States …………………. 569,379 23.69 570,146 22.41 Uruguay ……………………….. 3,569 0.15 4,336 0.17 Uzbekistan ……………………. 3,873 0.16 4,640 0.18 Vanuatu ……………………….. 55 * 822 0.03 Venezuela, Rep. Boliv. de ….. 27,588 1.15 28,355 1.11 Vietnam ……………………….. 446 0.02 1,213 0.05 Yemen, Republic of ………….. 715 0.03 1,482 0.06 Zambia ………………………… 1,286 0.05 2,053 0.08 Zimbabwe …………………….. 2,120 0.09 2,887 0.11 Total June 30, 2013 2,403,217 100.00+ 2,544,345 100.00+ Total June 30, 2012 2,371,896 100.00+ 2,511,184 100.00+

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PURPOSE

The International Finance Corporation (IFC), an international organization, was established in 1956 to further economic development in its member countries by encouraging the growth of private enterprise. IFC is a member of the World Bank Group, which also comprises the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID). Each member is legally and financially independent. Transactions with other World Bank Group members are disclosed in the notes that follow. IFC’s activities are closely coordinated with and complement the overall development objectives of the other World Bank Group institutions. IFC, together with private investors, assists in financing the establishment, improvement and expansion of private sector enterprises by making loans, equity investments and investments in debt securities where sufficient private capital is not otherwise available on reasonable terms. IFC’s share capital is provided by its member countries. It raises most of the funds for its investment activities through the issuance of notes, bonds and other debt securities in the international capital markets. IFC also plays a catalytic role in mobilizing additional funding from other investors and lenders through parallel loans, loan participations, partial credit guarantees, securitizations, loan sales, risk sharing facilities, and fund investments through the IFC Asset Management Company, LLC and other IFC crisis initiatives. In addition to project finance and mobilization, IFC offers an array of financial and technical advisory services to private businesses in the developing world to increase their chances of success. It also advises governments on how to create an environment hospitable to the growth of private enterprise and foreign investment. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING AND RELATED POLICIES

The Consolidated Financial Statements include the financial statements of IFC and consolidated subsidiaries as detailed in Note B. The accounting and reporting policies of IFC conform with accounting principles generally accepted in the United States of America (US GAAP). In the opinion of management, the Consolidated Financial Statements reflect all adjustments necessary for the fair presentation of IFC’s financial position and results of operation. Consolidated Financial Statements presentation – IFC has reclassified certain amounts on the consolidated statement of cash flows for the year ended June 30, 2012 to amend the presentation of certain foreign currency related remeasurements. The reclassification had the effect of reducing "change in trading securities and securities purchased and sold under resale and repurchase agreements" and increasing "effect of exchange rate changes on cash and cash equivalents" for the year ended June 30, 2012, each in the amount of $909 million. The reclassification had no impact on the consolidated balance sheet or the consolidated income statement. Advisory services – Beginning July 1, 2011, IFC adopted a new reporting basis for funds received from donors for IFC’s advisory services business and reported advisory services business as a separate segment. See Notes T and V. Funding received for IFC advisory services from governments and other donors are recognized as contribution revenue when the conditions on which they depend are substantially met. Advisory services expenses are recognized in the period incurred. Advisory client fees and administration fees are recognized as income when earned. Functional currency – IFC’s functional currency is the United States dollar (US dollars or $). Use of estimates – The preparation of the Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of income and expense during the reporting periods. Actual results could differ from these estimates. A significant degree of judgment has been used in the determination of: the reserve against losses on loans and impairment of debt securities and equity investments; estimated fair values of financial instruments accounted for at fair value (including equity investments, debt securities, loans, trading securities and derivative instruments); projected benefit obligations, fair value of pension and other postretirement benefit plan assets, and net periodic pension income or expense. There are inherent risks and uncertainties related to IFC’s operations. The possibility exists that changing economic conditions could have an adverse effect on the financial position of IFC. IFC uses internal models to determine the fair values of derivative and other financial instruments and the aggregate level of the reserve against losses on loans and impairment of equity investments. IFC undertakes continuous review and respecification of these models with the objective of refining its estimates, consistent with evolving best practices appropriate to its operations. Changes in estimates resulting from refinements in the assumptions and methodologies incorporated in the models are reflected in net income in the period in which the enhanced models are first applied. Consolidation, non-controlling interests and variable interest entities – IFC consolidates: i) all majority-owned subsidiaries; ii) limited partnerships in which it is the general partner, unless the presumption of control is overcome by certain management participation or

other rights held by minority shareholders/limited partners; and iii) variable interest entities (VIEs) for which IFC is deemed to be the VIE's primary beneficiary (together, consolidated subsidiaries). Significant intercompany accounts and transactions are eliminated in consolidation. Equity interests in consolidated subsidiaries held by third parties are referred to as non-controlling interests. Such interests and the amount of consolidated net income/loss attributable to those interests are identified within IFC's consolidated balance sheet and consolidated income statement as "non-controlling interest" and "net income attributable to non-controlling interest", respectively.

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An entity is a VIE if: i) its equity is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties; ii) its equity investors do not have decision-making rights about the entity's operations; or iii) if its equity investors do not absorb the expected losses or receive the expected returns of the entity proportionally to their voting rights. A variable interest is a contractual, ownership or other interest whose value changes as the fair value of the VIE's net assets change. IFC's variable interests in VIEs arise from financial instruments, service contracts, guarantees, leases or other monetary interests in those entities. IFC is considered to be the primary beneficiary of a VIE if it has the power to direct the VIE's activities that most significantly impact its economic performance and the obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE unless: i) the entity has the attributes of an investment company or for which it is industry practice to account for their assets at fair value through

earnings; ii) IFC has an explicit or implicit obligation to fund losses of the entity that could be potentially significant to that entity; and iii) the entity is a securitization vehicle, an asset-backed financing entity, or an entity that was formerly considered a qualifying special purpose

entity, as well as entities that are required to comply with or operate in accordance with requirements that are similar to those included in Rule 2a-7 of the Investment Company Act of 1940.

In those cases, IFC is considered to be the entity's primary beneficiary if it will absorb the majority of the VIE's expected losses or expected residual returns. IFC has a number of investments in VIEs that it manages and supervises in a manner consistent with other portfolio investments. Fair Value Option and Fair Value Measurements – IFC has adopted the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements and Disclosures (ASC 820) and the Fair Value Option subsections of ASC Topic 825, Financial Instruments (ASC 825 or the Fair Value Option). ASC 820 defines fair value, establishes a framework for measuring fair value and a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels and applies to all items measured at fair value, including items for which impairment measures are based on fair value. ASC 825 permits the measurement of eligible financial assets, financial liabilities and firm commitments at fair value on an instrument-by-instrument basis, that are not otherwise permitted to be accounted for at fair value under other accounting standards. The election to use the Fair Value Option is available when an entity first recognizes a financial asset or liability or upon entering into a firm commitment. The Fair Value Option

IFC has elected the Fair Value Option for the following financial assets and financial liabilities existing at the time of adoption of ASC 825 and subsequently entered into: i) investees in which IFC has significant influence:

a) direct investments in securities issued by the investee and, if IFC would have otherwise been required to apply equity method accounting, all other financial interests in the investee (e.g., loans)

b) investments in Limited Liability Partnerships (LLPs), Limited Liability Companies (LLCs) and other investment fund structures that maintain specific ownership accounts and loans or guarantees to such;

ii) direct equity investments representing 20 percent or more ownership but in which IFC does not have significant influence; iii) certain hybrid instruments in the investment portfolio; and iv) all market borrowings, except for such borrowings having no associated derivative instruments. Beginning July 1, 2010, IFC has elected the Fair Value Option for all new equity interests in funds. All borrowings for which the Fair Value Option has been elected are associated with existing derivative instruments used to create an economic hedge. Measuring at fair value those borrowings for which the Fair Value Option has been elected mitigates the earnings volatility caused by measuring the borrowings and related derivative differently (in the absence of a designated accounting hedge) without having to apply ASC Topic 815’s, Derivatives and Hedging (ASC 815) complex hedge accounting requirements. The Fair Value Option was not elected for all borrowings from IBRD and all other market borrowings because such borrowings fund assets with similar characteristics. Measuring at fair value those equity investments that would otherwise require equity method accounting simplifies the accounting and renders a carrying amount on the consolidated balance sheet based on a measure (fair value) that IFC considers superior to equity method accounting. For the investments that otherwise would require equity method accounting for which the Fair Value Option is elected, ASC 825 requires the Fair Value Option to also be applied to all eligible financial interests in the same entity. IFC has disbursed loans to certain of such investees; therefore, the Fair Value Option is also applied to those loans. IFC elected the Fair Value Option for equity investments with 20% or more ownership where it does not have significant influence so that the same measurement method (fair value) will be applied to all equity investments with more than 20% ownership. Equity securities held by consolidated subsidiaries that are investment companies Pursuant to ASC Topic 946, Financial Services - Investment Companies (ASC 946) and ASC Topic 810, Consolidation, equity securities held by consolidated subsidiaries that are investment companies are accounted for at fair value, with unrealized gains and losses reported in earnings.

44 _



Fair Value Measurements ASC 820 defines fair value as the price that would be received to sell an asset or transfer a liability (i.e., an exit price) in an orderly transaction between independent, knowledgeable and willing market participants at the measurement date assuming the transaction occurs in the entity’s principal (or most advantageous) market. Fair value must be based on assumptions market participants would use (inputs) in determining the price and measured assuming that market participants act in their economic best interest, therefore, their fair values are determined based on a transaction to sell or transfer the asset or liability on a standalone basis. Under ASC 820, fair value measurements are not adjusted for transaction costs. Notwithstanding the following paragraph, pursuant to ASC Topic 320, Investments - Debt and Equity Securities (ASC 320), IFC reports equity investments that are listed in markets that provide readily determinable fair values at fair value, with unrealized gains and losses being reported in other comprehensive income. The fair value hierarchy established by ASC 820 gives the highest priority to unadjusted quoted prices in active markets for identical unrestricted assets and liabilities (Level 1), the next highest priority to observable market based inputs or unobservable inputs that are corroborated by market data from independent sources (Level 2) and the lowest priority to unobservable inputs that are not corroborated by market data (Level 3). Fair value measurements are required to maximize the use of available observable inputs. Level 1 primarily consists of financial instruments whose values are based on unadjusted quoted market prices. It includes IFC’s equity investments, which are listed in markets that provide readily determinable fair values, government issues and money market funds in the liquid assets portfolio, and market borrowings that are listed on exchanges. Level 2 includes financial instruments that are valued using models and other valuation methodologies. These models consider various assumptions and inputs, including time value, yield curves, volatility factors, prepayment speeds, default rates, loss severity and current market and contractual pricing for the underlying asset, as well as other relevant economic measures. Substantially all of these inputs are observable in the market place, can be derived from observable data or are supported by observable levels at which market transactions are executed. Financial instruments categorized as Level 2 include non-exchange-traded derivatives such as interest rate swaps, cross-currency swaps, certain asset-backed securities, as well as the majority of trading securities in the liquid asset portfolio, and the portion of IFC’s borrowings accounted for at fair value not included in Level 1. Level 3 consists of financial instruments whose fair value is estimated based on internally developed models or methodologies utilizing significant inputs that are non-observable. It also includes financial instruments whose fair value is estimated based on price information from independent sources that cannot be corroborated by observable market data. Level 3 includes equity investments that are not listed in markets that provide readily determinable fair values, all loans for which IFC has elected the Fair Value Option, all of IFC’s debt securities in the investment portfolio, and certain hard-to-price securities in the liquid assets portfolio. IFC estimates the fair value of its investments in private equity funds that do not have readily determinable fair value based on the funds’ net asset values (NAVs) per share as a practical expedient to the extent that a fund reports its investment assets at fair value and has all the attributes of an investment company, pursuant to ASC 946. If the NAV is not as of IFC’s measurement date, IFC adjusts the most recent NAV, as necessary, to estimate a NAV for the investment that is calculated in a manner consistent with the fair value measurement principles established by ASC 820. Remeasurement of foreign currency transactions – Assets and liabilities not denominated in US dollars, other than disbursed equity investments, are expressed in US dollars at the exchange rates prevailing at June 30, 2013 and June 30, 2012. Disbursed equity investments, other than those accounted for at fair value, are expressed in US dollars at the prevailing exchange rates at the time of disbursement. Income and expenses are recorded based on the rates of exchange prevailing at the time of the transaction. Transaction gains and losses are credited or charged to income. Loans – IFC originates loans to facilitate project finance, restructuring, refinancing, corporate finance, and/or other developmental objectives. Loans are recorded as assets when disbursed. Loans are generally carried at the principal amounts outstanding adjusted for net unamortized loan origination costs and fees. It is IFC’s practice to obtain collateral security such as, but not limited to, mortgages and third-party guarantees. Certain loans are carried at fair value in accordance with the Fair Value Option as discussed above. Unrealized gains and losses on loans accounted for at fair value under the Fair Value Option are reported in income from loans and guarantees on the consolidated income statement. Certain loans originated by IFC contain income participation, prepayment and conversion features. These features are bifurcated and separately accounted for in accordance with ASC 815 if IFC has not elected the Fair Value Option for the loan host contracts and the features meet the definition of a derivative, and are not considered to be clearly and closely related to their host loan contracts. Otherwise, these features are accounted for as part of their host loan contracts in accordance with IFC’s accounting policies for loans as indicated herein. Loans held for sale are carried at the lower of cost or fair value. The excess, if any, of amortized cost over fair value is accounted for as a valuation allowance. Changes in the valuation allowance are recognized in net income as they occur. Revenue recognition on loans – Interest income and commitment fees on loans are recorded as income on an accrual basis. Loan origination fees and direct loan origination costs are deferred and amortized over the estimated life of the originated loan; such amortization is determined using the interest method unless the loan is a revolving credit facility in which case amortization is determined using the straight-line method. Prepayment fees are recorded as income when received in freely convertible currencies.

_ 45



IFC does not recognize income on loans where collectability is in doubt or payments of interest or principal are past due more than 60 days unless management anticipates that collection of interest will occur in the near future. Any interest accrued on a loan placed in nonaccrual status is reversed out of income and is thereafter recognized as income only when the actual payment is received. Interest not previously recognized but capitalized as part of a debt restructuring is recorded as deferred income, included in the consolidated balance sheet in payables and other liabilities, and credited to income only when the related principal is received. Such capitalized interest is considered in the computation of the reserve against losses on loans in the consolidated balance sheet. Reserve against losses on loans – IFC recognizes impairment on loans not carried at fair value in the consolidated balance sheet through the reserve against losses on loans, recording a provision or release of provision for losses on loans in net income, which increases or decreases the reserve against losses on loans. Individually impaired loans are measured based on the present value of expected future cash flows to be received, observable market prices, or for loans that are dependent on collateral for repayment, the estimated fair value of the collateral. The reserve against losses on loans reflects management’s estimates of both identified probable losses on individual loans (specific reserves) and probable losses inherent in the portfolio but not specifically identifiable (portfolio reserves). The determination of identified probable losses represents management’s judgment of the creditworthiness of the borrower. Reserves against losses are established through a review of individual loans undertaken on a quarterly basis. IFC considers a loan as impaired when, based on current information and events, it is probable that IFC will be unable to collect all amounts due according to the loan’s contractual terms. Information and events, with respect to the borrower and/or the economic and political environment in which it operates, considered in determining that a loan is impaired include, but not limited to, the borrower’s financial difficulties, breach of contract, bankruptcy/reorganization, credit rating downgrade as well as geopolitical conflict, financial/economic crisis, commodity price decline, adverse local government action and natural disaster. Unidentified probable losses are the losses incurred at the reporting date that have not yet been specifically identified. The risks inherent in the portfolio that are considered in determining unidentified probable losses are those proven to exist by past experience and include: country systemic risk; the risk of correlation or contagion of losses between markets; uninsured and uninsurable risks; nonperformance under guarantees and support agreements; and opacity of, or misrepresentation in, financial statements. There were no changes, during the periods presented herein, to IFC’s accounting policies and methodologies used to estimate its reserve against loan losses. For purposes of providing certain disclosures about IFC’s entire reserve against losses on loans, IFC considers its entire loan portfolio to comprise one portfolio segment. A portfolio segment is the level at which the method for estimating the reserve against losses on loans is developed and documented. Loans are written-off when IFC has exhausted all possible means of recovery, by reducing the reserve against losses on loans. Such reductions in the reserve are partially offset by recoveries, if any, associated with previously written-off loans. Equity investments – IFC invests primarily for developmental impact; IFC does not seek to take operational, controlling, or strategic equity positions within its investees. Equity investments are acquired through direct ownership of equity instruments of investees, as a limited partner in LLPs and LLCs, and/or as an investor in private equity funds. Revenue recognition on equity investments – Equity investments, which are listed in markets that provide readily determinable fair values, are accounted for as available-for-sale securities at fair value with unrealized gains and losses being reported in other comprehensive income in accordance with ASC 320. As noted above under “Fair Value Option and Fair Value Measurements”, direct equity investments and investments in LLPs and LLCs that maintain ownership accounts in which IFC has significant influence, direct equity investments representing 20 percent or more ownership but in which IFC does not have significant influence and, beginning July 1, 2010, all new equity interests in funds are accounted for at fair value under the Fair Value Option. Direct equity investments in which IFC does not have significant influence and which are not listed in markets that provide readily determinable fair values are carried at cost, less impairment. Notwithstanding the foregoing, equity securities held by consolidated subsidiaries that are investment companies are accounted for at fair value, with unrealized gains and losses reported in earnings. IFC’s investments in certain private equity funds in which IFC is deemed to have a controlling financial interest, as are fully consolidated by IFC, as the presumption of control by the fund manager or the general partner has been overcome. Certain equity investments, for which recovery of invested capital is uncertain, are accounted for under the cost recovery method, such that receipts of freely convertible currencies are first applied to recovery of invested capital and then to income from equity investments. The cost recovery method is principally applied to IFC's investments in its oil and gas unincorporated joint ventures (UJVs). IFC’s share of conditional asset retirement obligations related to investments in UJVs are recorded when the fair value of the obligations can be reasonably estimated. The obligations are capitalized and systematically amortized over the estimated economic useful lives. Unrealized gains and losses on equity investments accounted for at fair value under the Fair Value Option are reported in income from equity investments on the consolidated income statement. Unrealized gains and losses on equity investments listed in markets that provide readily determinable fair values which are accounted for as available-for-sale are reported in other comprehensive income. Realized gains on the sale or redemption of equity investments are measured against the average cost of the investments sold and are generally recorded as income from equity investments when received. Capital losses are recognized when incurred.

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Profit participations received on equity investments are recorded when received in freely convertible currencies. Dividends received on equity investments through June 30, 2011 were recorded as income when received in freely convertible currencies. Beginning July 1, 2011, dividends on listed equity investments are recorded on the ex dividend date - dividends on unlisted equity investments are recorded upon receipt of notice of declaration. Realized gains on the sale or redemption of equity investments are measured against the average cost of the investments sold and, through June 30, 2011, were recorded as income in income from equity investments when received in freely convertible currencies. Beginning July 1, 2011, realized gains on listed equity investments are recorded upon trade date - realized gains on unlisted equity investments are recorded upon incurring the obligation to deliver the applicable shares. Losses are recognized when incurred. IFC enters into put and call option and warrant agreements in connection with certain equity investments; these are accounted for in accordance with ASC 815 to the extent they meet the definition of a derivative. Gains and losses on nonmonetary exchanges – Nonmonetary transactions typically arise through: (1) the exchange of nonmonetary assets by exercising a conversion option that results in the exchange of one financial instrument (i.e., loan, equity, or debt security) for another financial instrument (i.e., debt securities or equity shares); or (2) a nonreciprocal transfer where IFC receives a nonmonetary asset for which no assets are relinquished in exchange. Generally, accounting for exchanges of nonmonetary assets should be based on the fair values of the assets involved. Thus, the amount initially recorded for a nonmonetary asset received in exchange for another nonmonetary asset is the fair value of the asset received. The difference between the fair value of the asset received and the recorded amount of the asset surrendered (immediately prior to the exchange transaction) is recorded as a gain or loss on non-monetary exchanges in the income statement. Impairment of equity investments – Equity investments accounted for at cost, less impairment and available-for-sale are assessed for impairment each quarter. When impairment is identified, it is generally deemed to be other than temporary, and the equity investment is written down to the impaired value, which becomes the new cost basis in the equity investment. Such other than temporary impairments are recognized in net income. Subsequent increases in the fair value of available-for-sale equity investments are included in other comprehensive income - subsequent decreases in fair value, if not other than temporary impairment, also are included in other comprehensive income. Debt securities – Debt securities in the investment portfolio are classified as available-for-sale and carried at fair value on the consolidated balance sheet with unrealized gains and losses included in accumulated other comprehensive income until realized. Realized gains on sales of debt securities and interest on debt securities is included in income from debt securities on the consolidated income statement. Certain debt securities are carried at fair value in accordance with the Fair Value Option as discussed above. Unrealized gains and losses on debt securities accounted for at fair value under the Fair Value Option are reported in income from debt securities on the consolidated income statement. IFC invests in certain debt securities with conversion features; these features are accounted for in accordance with ASC 815 to the extent they meet the definition of a derivative. Impairment of debt securities – In determining whether an unrealized loss on debt securities is other-than-temporary, IFC considers all relevant information including the length of time and the extent to which fair value has been less than amortized cost, whether IFC intends to sell the debt security or whether it is more likely than not that IFC will be required to sell the debt security, the payment structure of the obligation and the ability of the issuer to make scheduled interest or principal payments, any changes to the ratings of a security, and relevant adverse conditions specifically related to the security, an industry or geographic sector. Debt securities in the investment portfolio are assessed for impairment each quarter. When impairment is identified, the entire impairment is recognized in net income if (1) IFC intends to sell the security, or (2) it is more likely than not that IFC will be required to sell the security before recovery. However, if IFC does not intend to sell the security and it is not more likely than not that IFC will be required to sell the security but the security has suffered a credit loss, the impairment charge will be separated into the credit loss component, which is recognized in net income, and the remainder which is recorded in other comprehensive income. The impaired value becomes the new amortized cost basis of the debt security. Subsequent increases and decreases - if not an additional other-than-temporary impairment - in the fair value of debt securities are included in other comprehensive income. The difference between the new amortized cost basis of debt securities for which an other-than-temporary impairment has been recognized in net income and the cash flows expected to be collected is accreted to interest income using the effective yield method. Significant subsequent increases in the expected or actual cash flows previously expected are recognized as a prospective adjustment of the yield. Guarantees – IFC extends financial guarantee facilities to its clients to provide credit enhancement for their debt securities and trade obligations. IFC offers partial credit guarantees to clients covering, on a risk-sharing basis, client obligations on bonds or loans. Under the terms of IFC's guarantees, IFC agrees to assume responsibility for the client’s financial obligations in the event of default by the client (i.e., failure to pay when payment is due). Guarantees are regarded as issued when IFC commits to the guarantee. Guarantees are regarded as outstanding when the underlying financial obligation of the client is incurred, and this date is considered to be the “inception” of the guarantee. Guarantees are regarded as called when IFC’s obligation under the guarantee has been invoked. There are two liabilities associated with the guarantees: (i) the stand-ready obligation to perform and (ii) the contingent liability. The fair value of the stand-ready obligation to perform is recognized at the inception of the guarantee unless a contingent liability exists at that time or is expected to exist in the near term. The contingent liability associated with the financial guarantee is recognized when it is probable the guarantee will be called and when the amount of guarantee called can be reasonably estimated. All liabilities associated with guarantees are included in payables and other liabilities, and the receivables are included in other assets on the consolidated balance sheet. When the guarantees are called, the amount disbursed is recorded as a new loan, and specific reserves against losses are established, based on the estimated probable loss. Guarantee fees are recorded in income as the stand-ready obligation to perform is fulfilled. Commitment fees on guarantees are recorded as income on an accrual basis.

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Designations of retained earnings – IFC establishes funding mechanisms for specific Board approved purposes through designations of retained earnings. Designations of retained earnings for grants to IDA are recorded as a transfer from undesignated retained earnings to designated retained earnings when the designation is approved by the Board of Governors. All other designations are recorded as a transfer from undesignated retained earnings to designated retained earnings when the designation is noted with approval by the Board of Directors. Total designations of retained earnings are determined based on IFC’s annual income before expenditures against designated retained earnings and net gains and losses on other non-trading financial instruments accounted for at fair value in excess of $150 million, and contemplating the financial capacity and strategic priorities of IFC. Expenditures resulting from such designations are recorded as expenses in IFC’s consolidated income statement in the year in which they are incurred, also having the effect of reducing the respective designated retained earnings for such purposes. Expenditures are deemed to have been incurred when IFC has ceded control of the funds to the recipient. If the recipient is deemed to be controlled by IFC, the expenditure is deemed to have been incurred only when the recipient disburses the funds to a non-related party. On occasion, recipients who are deemed to be controlled by IFC make investments. In such cases, IFC includes those assets on its consolidated balance sheet until the recipient disposes of or transfers the asset or IFC is deemed to no longer be in control of the recipient. These investments have had no material impact on IFC’s financial position, results of operations, or cash flows. Investments resulting from such designations are recorded on IFC’s consolidated balance sheet in the year in which they occur, also having the effect of reducing the respective designated retained earnings for such purposes. Liquid asset portfolio – The liquid asset portfolio, as defined by IFC, consists of: time deposits and securities; related derivative instruments; securities purchased under resale agreements, securities sold under repurchase agreements; receivables from sales of securities and payables for purchases of securities; and related accrued income and charges. IFC’s liquid funds are invested in government, agency and government-sponsored agency obligations, time deposits and asset-backed, including mortgage-backed, securities. Government and agency obligations include positions in high quality fixed rate bonds, notes, bills, and other obligations issued or unconditionally guaranteed by governments of countries or other official entities including government agencies and instrumentalities or by multilateral organizations. Asset-backed and mortgage-backed securities include agency and non-agency residential mortgage-backed securities, commercial mortgage-backed securities, consumer, auto and student loans-backed securities, commercial real estate collateralized debt obligations and collateralized loan obligations. Securities and related derivative instruments within IFC’s liquid asset portfolio are classified as trading and are carried at fair value with any changes in fair value reported in income from liquid asset trading activities. Interest on securities and amortization of premiums and accretion of discounts are also reported in income from liquid asset trading activities. Gains and losses realized on the sale of trading securities are computed on a specific security basis. IFC classifies cash and due from banks and time deposits (collectively, cash and cash equivalents) as cash and as cash equivalents in the consolidated statement of cash flows because they are generally readily convertible to known amounts of cash within 90 days of acquisition generally when the original maturities for such instruments are under 90 days or in some cases are under 180 days. Repurchase and resale agreements – Repurchase agreements are contracts under which a party sells securities and simultaneously agrees to repurchase the same securities at a specified future date at a fixed price. Resale agreements are contracts under which a party purchases securities and simultaneously agrees to resell the same securities at a specified future date at a fixed price. It is IFC’s policy to take possession of securities purchased under resale agreements, which are primarily liquid government securities. The market value of these securities is monitored and, within parameters defined in the agreements, additional collateral is obtained when their value declines. IFC also monitors its exposure with respect to securities sold under repurchase agreements and, in accordance with the terms of the agreements, requests the return of excess securities held by the counterparty when their value increases. Repurchase and resale agreements are accounted for as collateralized financing transactions and recorded at the amount at which the securities were acquired or sold plus accrued interest. Borrowings – To diversify its access to funding, and reduce its borrowing costs, IFC borrows in a variety of currencies and uses a number of borrowing structures, including foreign exchange rate-linked, inverse floating rate and zero coupon notes. Generally, IFC simultaneously converts such borrowings into variable rate US dollar borrowings through the use of currency and interest rate swap transactions. Under certain outstanding borrowing agreements, IFC is not permitted to mortgage or allow a lien to be placed on its assets (other than purchase money security interests) without extending equivalent security to the holders of such borrowings. Substantially all borrowings are carried at fair value under the Fair Value Option with changes in fair value reported in net gains and losses on other non-trading financial instruments accounted for at fair value in the consolidated income statement. Interest on borrowings and amortization of premiums and accretion of discounts are reported in charges on borrowings. Risk management and use of derivative instruments – IFC enters into transactions in various derivative instruments for financial risk management purposes in connection with its principal business activities, including lending, investing in debt securities and equity investments, client risk management, borrowing, liquid asset portfolio management and asset and liability management. There are no derivatives designated as accounting hedges.

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All derivative instruments are recorded on the consolidated balance sheet at fair value as derivative assets or derivative liabilities. Where they are not clearly and closely related to the host contract, certain derivative instruments embedded in loans, debt securities and equity investments are bifurcated from the host contract and recorded at fair value as derivative assets and liabilities. The fair value at inception of such embedded derivatives is excluded from the carrying amount of the host contracts on the consolidated balance sheet. Changes in fair values of derivative instruments used in the liquid asset portfolio are recorded in income from liquid asset trading activities. Changes in fair values of derivative instruments other than those in the liquid asset portfolio are recorded in net gains and losses on other non-trading financial instruments accounted for at fair value. The risk management policy for each of IFC’s principal business activities and the accounting policies particular to them are described below. Lending activities IFC’s policy is to closely match the currency, interest rate basis, and maturity of its loans and borrowings. Derivative instruments are used to convert the cash flows from fixed rate US dollar or non-US dollar loans into variable rate US dollars. IFC has elected not to designate any hedging relationships for any of its lending-related derivatives. Client risk management activities IFC enters into derivatives transactions with its clients to help them hedge their own currency, interest rate, or commodity risk, which, in turn, improves the overall quality of IFC’s loan portfolio. To hedge the market risks that arise from these transactions with clients, IFC enters into offsetting derivative transactions with matching terms with authorized market counterparties. Changes in fair value of all derivatives associated with these activities are reported in net income in net gains and losses on other non-trading financial instruments accounted for at fair value. Borrowing activities IFC issues debt securities in various capital markets with the objectives of minimizing its borrowing costs, diversifying funding sources, and developing member countries’ capital markets, sometimes using complex structures. These structures include borrowings payable in multiple currencies, or borrowings with principal and/or interest determined by reference to a specified index such as a stock market index, a reference interest rate, a commodity index, or one or more foreign exchange rates. IFC uses derivative instruments with matching terms, primarily currency and interest rate swaps, to convert such borrowings into variable rate US dollar obligations, consistent with IFC’s matched funding policy. IFC elected to carry at fair value, under the Fair Value Option, all market borrowings for which a derivative instrument is used to create an economic hedge. Changes in the fair value of such borrowings and the associated derivatives are reported in net gains and losses on other non-trading financial instruments accounted for at fair value in the consolidated income statement. Liquid asset portfolio management activities IFC manages the interest rate, currency and other market risks associated with certain of the time deposits and securities in its liquid asset portfolio by entering into derivative transactions to convert the cash flows from those instruments into variable rate US dollars, consistent with IFC’s matched funding policy. The derivative instruments used include short-term, over-the-counter foreign exchange forwards (covered forwards), interest rate and currency swaps, and exchange-traded interest rate futures and options. As the entire liquid asset portfolio is classified as a trading portfolio, all securities (including derivatives) are carried at fair value with changes in fair value reported in income from liquid asset trading activities. No derivatives in the liquid asset portfolio have been designated as hedging instruments under ASC 815. Asset and liability management In addition to the risk managed in the context of its business activities detailed above, IFC faces residual market risk in its overall asset and liability management. Residual currency risk is managed by monitoring the aggregate position in each lending currency and reducing the net excess asset or liability position through sales or purchases of currency. Interest rate risk arising from mismatches due to write-downs, prepayments and re-schedulings, and residual reset date mismatches is monitored by measuring the sensitivity of the present value of assets and liabilities in each currency to each basis point change in interest rates. IFC monitors the credit risk associated with these activities by careful assessment and monitoring of prospective and actual clients and counterparties. In respect of liquid assets and derivatives transactions, credit risk is managed by establishing exposure limits based on the credit rating and size of the individual counterparty. In addition, IFC has entered into master agreements governing derivative transactions that contain close-out and netting provisions and collateral arrangements. Under these agreements, if IFC’s credit exposure to a counterparty, on a mark-to-market basis, exceeds a specified level, the counterparty must post collateral to cover the excess, generally in the form of liquid government securities or cash. IFC does not offset the fair value amounts of derivatives and obligations to return cash collateral associated with these master-netting agreements. Loan participations – IFC mobilizes funds from commercial banks and other financial institutions (Participants) by facilitating loan participations, without recourse. These loan participations are administered and serviced by IFC on behalf of the Participants. The disbursed and outstanding balances of loan participations that meet the applicable accounting criteria are accounted for as sales and are not included in IFC’s consolidated balance sheet. All other loan participations are accounted for as secured borrowings and are included in loans on IFC’s consolidated balance sheet, with the related secured borrowings included in payables and other liabilities on IFC’s consolidated balance sheet. Pension and other postretirement benefits – IBRD has a defined benefit Staff Retirement Plan (SRP), a Retired Staff Benefits Plan (RSBP) and a Post-Employment Benefits Plan (PEBP) that cover substantially all of its staff members as well as the staff of IFC and of MIGA. The SRP provides regular pension benefits and includes a cash balance plan. The RSBP provides certain health and life insurance benefits to eligible retirees. The PEBP provides pension benefits administered outside the SRP. All costs associated with these plans are allocated between IBRD, IFC, and MIGA based upon their employees’ respective participation in the plans. In addition, IFC and MIGA reimburse IBRD for their share of any contributions made to these plans by IBRD. The net periodic pension and other postretirement benefit income or expense allocated to IFC is included in income or expense from pension and other postretirement benefit plans in the consolidated income statement. IFC includes a receivable from IBRD in receivables and other assets, representing prepaid pension and other postretirement benefit costs.

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Recently adopted accounting standards – In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (ASU 2011-05). ASU 2011-05 revises the manner in which entities must present comprehensive income in their financial statements by requiring either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements of income and comprehensive income, respectively. ASU 2011-05 does not change the items that must be reported in other comprehensive income, does not require any additional disclosures and is effective for fiscal years ending after December 15, 2011 (which was the year ended June 30, 2012 for IFC) and interim and annual periods thereafter. IFC currently presents two separate but consecutive consolidated statements of income and comprehensive income, respectively. ASU 2011-05 is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2011 (which was the year ended June 30, 2012 for IFC). Accounting and financial reporting developments – In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act) became law. The Act seeks to reform the U.S. financial regulatory system by introducing new regulators and extending regulation over new markets, entities, and activities. The implementation of the Act is dependent on the development of various rules to clarify and interpret its requirements. Pending the development of these rules, no impact on IFC has been determined as of June 30, 2013. IFC continues to evaluate the potential future implications of the Act. In December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities (ASU 2011-11), and ASU 2011-12, Deferral of the Effective date for Amendments to the Presentation of reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (ASU 2011-12). ASU 2011-11 contains new disclosure requirements regarding the reporting entity’s rights of setoff and related arrangements associated with its financial instruments and derivatives. The new disclosures will also provide information about both gross and net exposures. ASU 2011-11 is effective for annual reporting periods, and interim periods within those annual periods, beginning on or after January 1, 2013 (which is the year ending June 30, 2014 for IFC), and must be applied retroactively. In January 2013, the FASB issued ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (ASU 2013-01). ASU 2013-01 clarifies that instruments within ASC 2011-11’s scope are limited to derivatives, repurchase and reverse repurchase (resale) agreements and securities lending transactions that are either offset in accordance with ASC 210-20-45 or ASC 815-10-45 or subject to a master netting arrangement or similar agreement. In February 2013, the FASB issued ASU 2013-02, Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income (ASU 2013-02). ASU 2013-02 requires disclosure of information about changes in AOCI balances by component and significant items reclassified out of AOCI. It does not amend any existing reporting requirements for measuring net income or other comprehensive income. ASU 2013-02 is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2012 (which is the year ending June 30, 2014 for IFC). In June 2013, the FASB issued ASU 2013-08, Investment Companies (Topic 946); Amendments to the Scope, Measurement and Disclosure Requirements (ASU 2013-08). Among other things, ASU 2013-08 amends the criteria for an entity to qualify as an investment company under ASC Topic 946, introduces new disclosure requirements applicable to investment companies, and amends the measurement criteria for certain investments by an investment company in another investment company. ASU 2013-08 is applicable for annual reporting periods and interim periods within those annual periods, beginning after December 15, 2013 (which is the year ending June 30, 2015 for IFC). IFC is currently evaluating the impact of ASU 2013-08. In addition, during the year ended June 30, 2013, the FASB issued and/or approved various other ASUs. IFC analyzed and implemented the new guidance, as appropriate, with no material impact on the financial position, results of operations or cash flows of IFC.

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NOTE B – SCOPE OF CONSOLIDATION IFC Asset Management Company, LLC (AMC) and AMC Funds IFC through its wholly owned subsidiary, AMC, seeks to mobilize capital from outside IFC’s traditional investor pool and to manage third-party capital. AMC is consolidated into IFC’s financial statements. At June 30, 2013, IFC has provided $2 million of capital to AMC ($2 million - June 30, 2012). As a result of the consolidation of AMC, IFC’s consolidated balance sheet at June 30, 2013 includes $18 million in cash, receivables and other assets ($12 million - June 30, 2012), less than $0.5 million in equity investments (less than $0.5 million - June 30, 2012) and $1 million in payables and other liabilities ($2 million - June 30, 2012). Other income in IFC’s consolidated income statement includes $40 million during the year ended June 30, 2013 ($28 million - year ended June 30, 2012 and $28 million - year ended June 30, 2011) and other expenses includes $11 million during the year ended June 30, 2013 ($10 million - year ended June 30, 2012 and $5 million - year ended June 30, 2011). At June 30, 2013, AMC managed seven funds (collectively referred to as the AMC Funds). All AMC Funds are investment companies and are required to report their investment assets at fair value through net income. IFC’s ownership interests in these AMC Funds are shown in the following table:

AMC Fund IFC’s ownership interest

IFC Capitalization (Equity) Fund, L.P. 61% IFC Capitalization (Subordinated Debt) Fund, L.P. 13% IFC African, Latin American and Caribbean Fund, LP 20% Africa Capitalization Fund, Ltd. - IFC Russian Bank Capitalization Fund, LP 45%

IFC Catalyst Funds(*) 27%(*) IFC Global Infrastructure Fund, LP 20%

(*)

The ownership interest of 27% reflects IFC’s ownership interest taking into consideration the overall commitments for the IFC Catalyst Fund, which is comprised of IFC Catalyst Fund, LP and IFC Catalyst Fund (UK), LP (collectively, IFC Catalyst Fund). IFC does not have an ownership interest in the IFC Catalyst Fund (UK), LP. IFC’s investments in AMC Funds, except for IFC Russian Bank Capitalization Fund, LP (RBCF), are accounted for at fair value under the Fair Value Option. RBCF, created in June 2012, is consolidated into IFC’s financial statements because of the presumption of control by IFC as owner of the general partner of RBCF. As a result of consolidating RBCF, IFC’s consolidated balance sheet at June 30, 2013 includes $74 million of equity investments ($0 - June 30, 2012), and noncontrolling interests of $38 million ($0 - June 30, 2012). These noncontrolling interests meet the ASC's definition of mandatorily redeemable financial instruments because the terms of the underlying partnership agreement provide for a termination date at which time its remaining assets are to be sold, its liabilities settled and the remaining net proceeds distributed to the noncontrolling interest holders and IFC. RBCF's termination date is 2021 with a possible extension to 2023. As RBCF is considered an investment company, its investment securities (equity investments) are measured at fair value in IFC's consolidated balance sheet; therefore, the settlement value or estimate of cash that would be due and payable to settle these noncontrolling interests, assuming an orderly liquidation of RBCF on June 30, 2013, approximates the $38 million of noncontrolling interests reflected on IFC's consolidated balance sheet at June 30, 2013. Other Consolidated entities In October 2009, IFC created a special purpose vehicle, Hilal Sukuk Company, to facilitate a $100 million Sukuk under IFC’s borrowings program. The Sukuk is scheduled to mature in November 2014. Hilal Sukuk Company is a VIE and has been consolidated into these Consolidated Financial Statements, albeit with no material impact. The collective impact of this and other entities consolidated into these Consolidated Financial Statements under the VIE or voting interest model is insignificant.

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NOTE C – LIQUID ASSET PORTFOLIO Income from liquid asset trading activities Income from the liquid asset trading activities for the years ended June 30, 2013, June 30, 2012 and June 30, 2011 comprises (US$ millions): 2013 2012 2011 Interest income $ 430 $ 670 $ 473

Net gains and losses on trading activities: Realized losses (103) (70) (76)Unrealized gains (losses) 173 (287) 132

Net gains (losses) on trading activities 70 (357) 56

Total income from liquid asset trading activities $ 500 $ 313 $ 529

Net gains and losses on trading activities comprises net gains on asset-backed and mortgage-backed securities of $161 million in the year ended June 30, 2013 ($8 million losses - year ended June 30, 2012; $159 million gains - year ended June 30, 2011) and net losses on other trading securities of $91 million in the year ended June 30, 2013 ($349 million losses - year ended June 30, 2012; $103 million losses - year ended June 30, 2011). The annualized rate of return on the trading liquid asset portfolio, calculated as total income from the liquid asset trading activities divided by fair value average daily balance of total trading securities, during the year ended June 30, 2013, was 1.6% (1.2% - year ended June 30, 2012; 2.1% - year ended June 30, 2011). After the effect of associated derivative instruments, the liquid asset portfolio generally reprices within one year. Composition of liquid asset portfolio The composition of IFC’s liquid asset portfolio included in the consolidated balance sheet captions is as follows (US$ millions): June 30, 2013 June 30, 2012 Assets Cash and due from banks $ 65 $ 883Time deposits 5,889 5,038Trading securities 30,349 28,868Securities purchased under resale agreements 337 964Derivative assets 376 264Receivables and other assets:

Receivables from unsettled security trades 236 691Accrued interest income on time deposits and securities 135 123Accrued income on derivative instruments 21 20

Total assets 37,408 36,851 Liabilities Securities sold under repurchase agreements 5,736 6,397Derivative liabilities 210 223Payables and other liabilities:

Payables for unsettled security trades 179 477Accrued charges on derivative instruments 46 33

Total liabilities 6,171 7,130

Total net liquid asset portfolio $ 31,237 $ 29,721 The liquid asset portfolio is denominated primarily in US dollars; investments in other currencies, net of the effect of associated derivative instruments that convert non-US dollar securities into US dollar securities, represent 2.7% of the portfolio at June 30, 2013 (2.7% - June 30, 2012). Collateral

The estimated fair value of securities held by IFC at June 30, 2013 as collateral in connection with derivatives transactions and purchase and resale agreements that may be sold or repledged was $1,029 million ($3,387 million - June 30, 2012). Collateral given by IFC to counterparties in connection with repurchase agreements that may be sold or repledged by the counterparty approximates the amounts classified as Securities sold under repurchase agreements. At June 30, 2013, trading securities with a carrying amount (fair value) of $205 million ($210 million - June 30, 2012) were pledged in connection with borrowings under a short-term discount note program, the carrying amount of which was $1,317 million ($1,400 million - June 30, 2012).

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Trading securities Trading securities comprises:

Year ended

June 30, 2013 At June 30, 2013

Fair value average daily balance (US$ million)

Fair value (US$ millions)

Weighted average contractual

maturity (years) Government, agency and government-sponsored agency obligations $ 14,927 $ 14,047 2.1Asset-backed securities 8,569 9,076 17.9Corporate securities 6,464 6,458 2.6Money market funds 463 768 n/a

Total trading securities $ 30,423 $ 30,349

Year ended

June 30, 2012 At June 30, 2012

Fair value average daily balance (US$ million)

Fair value (US$ millions)

Weighted average contractual

maturity (years) Government, agency and government-sponsored agency obligations $ 11,367 $ 13,684 1.6Asset-backed securities 7,419 8,252 18.6Corporate securities 6,634 6,823 2.2Money market funds 463 109 n/a

Total trading securities $ 25,883 $ 28,868 The expected maturity of the asset-backed securities may be significantly shorter than the contractual maturity, as reported above, due to prepayment features. NOTE D – INVESTMENTS The carrying amount of investments at June 30, 2013 and June 30, 2012 comprises (US$ millions): June 30, 2013 June 30, 2012Loans

Loans at amortized cost $ 21,923 $ 20,226Less: Reserve against losses on loans (1,628) (1,381)

Net loans 20,295 18,845

Loans held for sale at lower of amortized cost or fair value 43 60Loans accounted for at fair value under the Fair Value Option

(outstanding principal balance $474 - June 30, 2013, $607 - June 30, 2012) 493 591

Total loans 20,831 19,496

Equity investments Equity investments at cost less impairment* 3,119 3,066Equity investments accounted for at fair value as available-for-sale

(cost $2,397 - June 30, 2013, $1,783 - June 30, 2012) 4,230 3,231Equity investments accounted for at fair value

(cost $3,697 - June 30, 2013, $2,636 - June 30, 2012) 4,346 3,477

Total equity investments 11,695 9,774 Debt securities

Debt securities accounted for at fair value as available-for-sale (amortized cost $1,889 - June 30, 2013, $1,916 - June 30, 2012) 1,911 1,916

Debt securities accounted for at fair value under the Fair Value Option (amortized cost $237 - June 30, 2013, $210 - June 30, 2012) 240 252

Total debt securities 2,151 2,168

Total carrying amount of investments $ 34,677 $ 31,438 * Equity investments at cost less impairment at June 30, 2013 includes unrealized gains of $2 million ($2 million - June 30, 2012) related to equity investments accounted for as available-for-sale in previous periods and for which readily determinable fair vales are no longer available.

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The distribution of the investment portfolio by industry sector and by geographical region and a reconciliation of total disbursed portfolio to carrying amount of investments is as follows (US$ millions):

June 30, 2013 June 30, 2012 Sector

Loans Equity

investmentsDebt

securities Total Loans Equity

investments Debt

securities Total Manufacturing, agribusiness and services

Asia $ 2,020 $ 503 $ 264 $ 2,787 $ 1,946 $ 385 $ 201 $ 2,532Europe, Middle East and North Africa 3,297 634 76 4,007 3,131 599 36 3,766Sub-Saharan Africa, Latin America

and Caribbean 2,105 473 36 2,614 1,947 390 37 2,374Other 1,018 100 - 1,118 615 - - 615

Total manufacturing, agribusiness and services 8,440 1,710 376 10,526 7,639 1,374 274 9,287

Financial markets

Asia 1,842 1,381 125 3,348 1,218 1,098 274 2,590Europe, Middle East and North Africa 2,337 1,815 755 4,907 2,660 1,564 552 4,776Sub-Saharan Africa, Latin America

and Caribbean 2,061 1,797 437 4,295 1,796 1,526 682 4,004Other 302 872 164 1,338 382 546 128 1,056

Total financial markets 6,542 5,865 1,481 13,888 6,056 4,734 1,636 12,426

Infrastructure and natural resources

Asia 1,702 430 66 2,198 1,742 401 55 2,198Europe, Middle East and North Africa 2,314 399 66 2,779 2,273 356 10 2,639Sub-Saharan Africa, Latin America

and Caribbean 3,194 622 69 3,885 3,078 448 130 3,656Other 414 183 12 609 255 234 5 494

Total infrastructure and natural resources 7,624 1,634 213 9,471 7,348 1,439 200 8,987

Total disbursed investment portfolio $ 22,606 $ 9,209 $ 2,070 $ 33,885 $ 21,043 $ 7,547 $ 2,110 $ 30,700

Reserve against losses on loans (1,628) (1,628) (1,381) (1,381)Unamortized deferred loan origination

fees, net and other (139) (139) (120) (120)Disbursed amount allocated to a related

financial instrument reported separately in other assets or derivative assets (35) (37) - (72) (38) (64) (3) (105)

Adjustments to disbursed investment portfolio 8 44 - 52 8 3 (12) (1)

Unrealized losses on equity investments held by consolidated VIEs (3) (3) (1) (1)

Unrealized gains on investments accounted for at fair value as available-for-sale 1,833 78 1,911 1,448 31 1,479

Unrealized gains (losses) on investments 19 649 3 671 (16) 841 42 867 Carrying amount of investments $ 20,831 $ 11,695 $ 2,151 $ 34,677

$ 19,496 $ 9,774 $ 2,168 $ 31,438

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NOTE E – LOANS AND GUARANTEES Loans Income from loans and guarantees for the years ended June 30, 2013, June 30, 2012 and June 30, 2011, comprise the following (US$ millions): 2013 2012 2011 Interest income $ 879 $ 818 $ 704Commitment fees 35 29 33Other financial fees 90 68 52Gains on sale of loans - 2 -Gains on non-monetary exchanges 20 78 9Unrealized gains (losses) on loans accounted for at fair value

under the Fair Value Option

35

(57)

79

Income from loans and guarantees $ 1,059 $ 938 $ 877 The currency composition and average contractual rate of the disbursed loan portfolio are summarized below: June 30, 2013 June 30, 2012

Amount

(US$ millions)

Average contractual

rate (%) Amount

(US$ millions)

Average contractual

rate (%) US dollar $ 16,711 3.9 $ 15,635 4.2Euro 2,959 4.0 2,831 4.4Chinese renminbi 472 5.4 337 5.1Indian rupee 417 10.0 390 9.8Mexican peso 417 7.9 367 2.9Philippine pesos 273 7.2 308 7.9Brazilian real 245 8.9 157 8.9South African rand 233 9.1 165 9.2Russian ruble 207 10.8 224 11.3Indonesian rupiah 198 8.3 145 9.5Colombian pesos 83 8.3 117 10.1Turkish lira 48 12.1 52 13.1Vietnamese dong 40 17.4 52 14.3Other currencies

OECD currencies 39 3.2 53 3.4Non-OECD currencies 264 8.9 210 7.0

Total disbursed loan portfolio $ 22,606 4.5 $ 21,043 4.7

After the effect of interest rate swaps and currency swaps, IFC’s loans are principally denominated in variable rate US dollars. Loans in all currencies are repayable during the years ending June 30, 2014 through June 30, 2018 and thereafter, as follows (US$ millions):

2014 2015 2016 2017 2018 Thereafter Total Fixed rate loans $ 994 $ 576 $ 774 $ 368 $ 662 $ 1,294 $ 4,668Variable rate loans 4,210 2,711 2,920 2,129 1,814 4,154 17,938

Total disbursed loan portfolio $ 5,204 $ 3,287 $ 3,694 $ 2,497 $ 2,476 $ 5,448 $ 22,606 At June 30, 2013, 21% of the disbursed loan portfolio consisted of fixed rate loans (21% - June 30, 2012), while the remainder was at variable rates. At June 30, 2013, the disbursed loan portfolio included $86 million of loans serving as collateral under secured borrowing arrangements ($100 million - June 30, 2012). IFC’s disbursed variable rate loans generally reprice within one year. During the year ended June 30, 2013, IFC received mortgage loans with an initial carrying amount of $0 ($6 million - year ended June 30, 2012) in conjunction with the settlement of borrowers obligation to IFC. These loans are classified as held-for-sale.

_ 55



Reserve against losses on loans and provision for losses on loans Changes in the reserve against losses on loans for the years ended June 30, 2013, June 30, 2012 and June 30, 2011, as well as the related recorded investment in loans, evaluated for impairment individually (specific reserves) and on a pool basis (portfolio reserves) respectively, are summarized below (US$ millions): Year ended June 30, 2013

Specific reserves

Portfolio reserves

Total reserves

Beginning balance $ 447 $ 934 $ 1,381Provision (release of provision for) losses on loans, net 298 (49) 249Write-offs (13) - (13)Foreign currency transaction adjustments (2) 2 -Other adjustments* 11 - 11

Ending balance $ 741 $ 887 $ 1,628

Related recorded investment in loans at June 30, 2013 evaluated for impairment** $ 21,923 $ 20,520 $ 21,923

Recorded investment in loans with specific reserves $ 1,403 Year ended June 30, 2012

Specific reserves

Portfolio reserves

Total reserves

Beginning balance $ 382 $ 925 $ 1,307Provision for losses on loans, net 76 39 115Write-offs (13) - (13)Recoveries of previously written off loans 2 - 2Foreign currency transaction adjustments (5) (30) (35)Other adjustments* 5 - 5

Ending balance $ 447 $ 934 $ 1,381 Related recorded investment in loans

at June 30, 2012 evaluated for impairment** $ 20,226 $ 19,303 $ 20,226Recorded investment in loans with specific reserves $ 923

Year ended June 30, 2011

Specific reserves

Portfolio reserves

Total reserves

Beginning balance $ 432 $ 917 $ 1,349Release of provision for losses on loans, net (16) (24) (40)Write-offs (56) - (56)Recoveries of previously written off loans 4 - 4Foreign currency transaction adjustments 10 32 42Other adjustments* 8 - 8 Ending balance $ 382 $ 925 $ 1,307 Related recorded investment in loans

at June 30, 2011 evaluated for impairment** $ 19,038 $ 18,120 $ 19,038Recorded investment in loans with specific reserves $ 918

*Other adjustments comprise reserves against interest capitalized as part of a debt restructuring. **IFC individually evaluates all loans for impairment. Portfolio reserves are established for losses incurred, but not specifically identifiable, on loans for which no specific reserve is established.

56 _



Reserve for losses on guarantees and other receivables and provision for losses on guarantees and other receivables Changes in the reserve against losses on guarantees for the years ended June 30, 2013, June 30, 2012 and June 30, 2011, are summarized below (US$ millions): 2013 2012 2011 Beginning balance $ 21 $ 24 $ 24Release of provision for losses on guarantees (4) (3) -

Ending balance $ 17 $ 21 $ 24

Changes in the reserve against losses on other receivables for the years ended June 30, 2013, June 30, 2012 and June 30, 2011, are summarized below (US$ millions):

2013 2012 2011 Beginning balance $ 5 $ - $ -(Release of) provision for losses on other receivables (2) 5 -

Ending balance $ 3 $ 5 $ - Impaired loans The average recorded investment during the year ended June 30, 2013, in loans at amortized cost that are impaired was $1,352 million ($908 million - year ended June 30, 2012). The recorded investment in loans at amortized cost that are impaired at June 30, 2013 was $1,403 million ($923 million - June 30, 2012). Loans at amortized cost that are impaired with specific reserves are summarized by industry sector and geographic region as follows (US$ millions):

June 30, 2013

Recorded investment

Unpaid principal balance

Related specific reserve

Average recorded

investment

Interest income

recognized Manufacturing, agribusiness and services

Asia $ 165 $ 171 $ 116 $ 162 $ 2Europe, Middle East and North Africa 508 517 297 515 10Sub-Saharan Africa, Latin America and Caribbean 398 460 189 333 13

Total manufacturing, agribusiness and services 1,071 1,148 602 1,010 25

Financial markets

Asia 15 17 3 18 1Europe, Middle East and North Africa 17 24 7 22 1Sub-Saharan Africa, Latin America and Caribbean 7 32 7 7 1

Total financial markets 39 73 17 47 3


Asia 72 72 35 72 -Europe, Middle East and North Africa - - - - -Sub-Saharan Africa, Latin America and Caribbean 188 188 76 187 4Other 33 33 11 36 2

Total infrastructure and natural resources 293 293 122 295 6

Total $ 1,403 $ 1,514 $ 741 $ 1,352 $ 34

IFC had no impaired loans at June 30, 2013 with no specific reserves.

_ 57



June 30, 2012

Recorded investment

Unpaid principal balance

Related specific reserve

Average recorded

investment

Interest income

recognized Manufacturing, agribusiness and services

Asia $ 100 $ 106 $ 72 $ 101 $ -Europe, Middle East and North Africa 436 444 235 440 12Sub-Saharan Africa, Latin America and Caribbean 181 244 46 163 5

Total manufacturing, agribusiness and services 717 794 353 704 17

Financial markets

Asia 22 24 5 19 2Europe, Middle East and North Africa 40 46 18 48 3Sub-Saharan Africa, Latin America and Caribbean 7 32 7 7 1

Total financial markets 69 102 30 74 6


Asia 73 73 25 70 3Europe, Middle East and North Africa 14 14 6 14 -Sub-Saharan Africa, Latin America and Caribbean 50 51 33 46 3

Total infrastructure and natural resources 137 138 64 130 6

Total $ 923 $ 1,034 $ 447 $ 908 $ 29

IFC had no impaired loans at June 30, 2012 with no specific reserves. Nonaccruing loans Loans on which the accrual of interest has been discontinued amounted to $1,272 million at June 30, 2013 ($859 million - June 30, 2012). The interest income on such loans for the years ended June 30, 2013 and June 30, 2012 is summarized as follows (US$ millions):

2013 2012 2011 Interest income not recognized on nonaccruing loans $ 90 $ 47 $ 61Interest income recognized on loans in nonaccrual status

related to current and prior years, on a cash basis 38 21 22 The recorded investment in nonaccruing loans at amortized cost is summarized by industry sector and geographic region as follow (US$ millions):

June 30, 2013

Manufacturing, agribusiness and services

Financial markets


Total recorded investment in nonaccruing

loans Asia $ 148 $ 15 $ 64 $ 227Europe, Middle East and North Africa 460 4 - 464Sub-Saharan Africa, Latin America and Caribbean 388 - 129 517

Total disbursed loans at amortized cost $ 996 $ 19 $ 193 $ 1,208

June 30, 2012

Manufacturing, agribusiness and services

Financial markets


Total recorded investment in nonaccruing

loans Asia $ 82 $ - $ 8 $ 90Europe, Middle East and North Africa 467 9 14 490Sub-Saharan Africa, Latin America and Caribbean 142 - 32 174

Total disbursed loans at amortized cost $ 691 $ 9 $ 54 $ 754

58 _



Past due loans

An age analysis, based on contractual terms, of IFC’s loans at amortized cost by industry sector and geographic region follows (US$ millions):

June 30, 2013

30-59 days

past due

60-89 days

past due

90 days or greater past due

Total past due Current

Total loans

Manufacturing, agribusiness and services Asia $ - $ - $ 141 $ 141 $ 1,820 $ 1,961Europe, Middle East and North Africa 10 - 399 409 2,803 3,212Sub-Saharan Africa, Latin America and

Caribbean 31 35 146 212 1,860 2,072Other - - - - 1,017 1,017

Total manufacturing, agribusiness and services 41 35 686 762 7,500 8,262

Financial markets

Asia - - - - 1,837 1,837Europe, Middle East and North Africa 1 - 4 5 2,290 2,295Sub-Saharan Africa, Latin America and

Caribbean - - - - 1,946 1,946Other - 1 - 1 216 217

Total financial markets 1 1 4 6 6,289 6,295


Asia - 4 64 68 1,627 1,695Europe, Middle East and North Africa - - - - 2,306 2,306Sub-Saharan Africa, Latin America and

Caribbean - - 130 130 2,996 3,126Other - - - - 413 413

Total infrastructure and natural resources - 4 194 198 7,342 7,540

Total disbursed loans

at amortized cost $ 42 $ 40 $ 884 $ 966 $ 21,131 $ 22,097

Unamortized deferred loan origination fees, net and other (139)

Disbursed amount allocated to a related financial instrument reported separately in other assets or derivative assets (35)

Recorded investment in loans at amortized cost $ 21,923

At June 30, 2013, there are no loans 90 days or greater past due still accruing.

_ 59



June 30, 2012

30-59 days

past due

60-89 days

past due

90 days or greater past due

Total past due Current

Total loans

Manufacturing, agribusiness and services Asia $ 18 $ - $ 73 $ 91 $ 1,821 $ 1,912Europe, Middle East and North Africa - 26 397 423 2,600 3,023Sub-Saharan Africa, Latin America and Caribbean - 40 63 103 1,824 1,927Other - - - - 615 615

Total manufacturing, agribusiness and services 18 66 533 617 6,860 7,477

Financial markets

Asia - - - - 1,198 1,198Europe, Middle East and North Africa - - 4 4 2,576 2,580Sub-Saharan Africa, Latin America and

Caribbean - - - - 1,712 1,712Other - - - - 330 330

Total financial markets - - 4 4 5,816 5,820


Asia - - - - 1,548 1,548Europe, Middle East and North Africa - - 14 14 2,250 2,264Sub-Saharan Africa, Latin America and

Caribbean - - 32 32 2,988 3,020Other - - - - 255 255

Total infrastructure and natural resources - - 46 46 7,041 7,087

Total disbursed loans

at amortized cost $ 18 $ 66 $ 583 $ 667 $ 19,717 $ 20,384

Unamortized deferred loan origination fees, net and other (120)

Disbursed amount allocated to a related financial instrument reported separately in other assets or derivative assets (38)


At June 30, 2012, there are no loans 90 days or greater past due still accruing.

60 _



Loan Credit Quality Indicators IFC utilizes a rating system to classify loans according to credit worthiness and risk. Each loan is categorized as very good, good, average, watch, substandard, doubtful or loss. A description of each category (credit quality indicator), in terms of the attributes of the borrower, the business environment in which the borrower operates or the loan itself, follows:

Credit quality indicator

Description

Very good Excellent debt service capacity; superior management; market leader; very favorable operating environment; may also have strong collateral and/or guaranteed arrangements.

Good Strong debt service capacity: good liquidity; stable performance, very strong management, high market share; minimal probability of financial deterioration.

Average Satisfactory balance sheet ratios, average liquidity; good debt service capacity; good management; average size and market share.

Watch Tight liquidity; financial performance below expectations; higher than average leverage ratio; week management in certain aspects; uncompetitive products and operations; unfavorable or unstable macroeconomic factors.

Substandard Poor financial performance; difficulty servicing debt; inadequate net worth and debt service capacity; loan not fully secured: partial past due amounts of interest and/or principal; well-defined weaknesses may adversely impact collection but no loss of principal is expected.

Doubtful Bad financial performance; serious liquidity and debt service capacity issues: large and increasing past due amounts: partial loss is very likely.

Loss Close to or already in bankruptcy; serious regional geopolitical issues/conflicts; default and total loss highly likely.

_ 61



A summary of IFC’s loans at amortized cost by credit quality indicator updated effective June 30, 2013 and June 30, 2012 respectively, as well as by industry sector and geographic region follows (US$ millions): June 30, 2013

Very good

Good

Average

Watch

Substandard

Doubtful

Loss

Total

Manufacturing, agribusiness

and services Asia $ - $ 420 $ 830 $ 440 $ 86 $ 51 $ 134 $ 1,961Europe, Middle East and North Africa 9 369 986 994 400 86 368 3,212Sub-Saharan Africa, Latin America

and Caribbean Europe 25 184 998 344 208 248 65 2,072Other - 826 164 24 3 - - 1,017

Total manufacturing, agribusiness and services 34 1,799 2,978 1,802 697 385 567 8,262

Financial markets

Asia 41 713 813 242 12 16 - 1,837Europe, Middle East and North Africa - 530 1,280 289 165 27 4 2,295Sub-Saharan Africa, Latin America

and Caribbean - 870 911 148 10 7 - 1,946Other - - 1 216 - - - 217

Total financial markets 41 2,113 3,005 895 187 50 4 6,295


Asia - 291 589 664 79 8 64 1,695Europe, Middle East and North Africa - 245 825 924 290 22 - 2,306Sub-Saharan Africa, Latin America

and Caribbean - 232 1,072 1,472 238 43 69 3,126Other - 35 49 123 206 - - 413

Total infrastructure and natural resources - 803 2,535 3,183 813 73 133 7,540Total disbursed loans

at amortized cost $ 75 $ 4,715 $ 8,518 $ 5,880 $ 1,697 $ 508 $ 704 $ 22,097 Unamortized deferred loan origination

fees, net and other (139)Disbursed amount allocated

to a related financial instrument reported separately in other assets or derivative assets (35)

Recorded investment in loans

at amortized cost $ 21,923

62 _



June 30, 2012

Very good

Good

Average

Watch

Substandard

Doubtful

Loss

Total Manufacturing, agribusiness and

services Asia $ - $ 381 $ 793 $ 461 $ 187 $ 81 $ 9 $ 1,912Europe, Middle East and North Africa - 312 1,092 904 302 231 182 3,023Sub-Saharan Africa, Latin America

and Caribbean Europe - 218 933 531 110 114 21 1,927Other - 336 279 - - - - 615

Total manufacturing, agribusiness and services - 1,247 3,097 1,896 599 426 212 7,477

Financial markets

Asia - 649 283 244 - 22 - 1,198Europe, Middle East and North Africa - 425 1,440 387 267 57 4 2,580Sub-Saharan Africa, Latin America

and Caribbean - 338 1,181 176 10 7 - 1,712Other - - - 330 - - - 330

Total financial markets - 1,412 2,904 1,137 277 86 4 5,820


Asia - 257 553 630 35 41 32 1,548Europe, Middle East and North Africa - 243 779 1,066 31 143 2 2,264Sub-Saharan Africa, Latin America

and Caribbean - 301 1,015 1,383 226 54 41 3,020Other - 44 102 109 - - - 255

Total infrastructure and natural resources - 845 2,449 3,188 292 238 75 7,087

Total disbursed loans at amortized cost $ - $ 3,504 $ 8,450 $ 6,221 $ 1,168 $ 750 $ 291 $ 20,384

Unamortized deferred loan origination

fees, net and other (120)Disbursed amount allocated to

a related financial instrument reported separately in other assets or derivative assets (38)


Loan modifications during the year ended June 30, 2013 considered troubled debt restructurings were not significant. There were no loans that defaulted during the year ended June 30, 2013 that had been modified in a troubled debt restructuring within 12 months prior to the date of default. Guarantees

IFC extends financial guarantee facilities to its clients to provide full or partial credit enhancement for their debt securities and trade obligations. Under the terms of IFC’s guarantees, IFC agrees to assume responsibility for the client’s financial obligations in the event of default by the client, where default is defined as failure to pay when payment is due. Guarantees entered into by IFC generally have maturities consistent with those of the loan portfolio. Guarantees signed at June 30, 2013 totaled $4,933 million ($4,507 million - June 30, 2012). Guarantees of $3,565 million that were outstanding (i.e., not called) at June 30, 2013 ($3,420 million - June 30, 2012), were not included in loans on IFC’s consolidated balance sheet. The outstanding amount represents the maximum amount of undiscounted future payments that IFC could be required to make under these guarantees.

_ 63



NOTE F – DEBT SECURITIES

Income from debt securities for the years ended June 30, 2013, June 30, 2012 and June 30, 2011, comprise the following (US$ millions): 2013 2012 2011 Interest income $ 59 $ 60 $ 39Dividends 14 14 9Realized gains (losses) on sales of debt securities 10 12 (2)Gains on non-monetary exchanges 7 1 4Other-than-temporary impairments (46) (27) (2)Unrealized (losses) gains on debt securities accounted for at fair value under the Fair Value Option (39) 21 (2)

Total income from debt securities $ 5 $ 81 $ 46 Debt securities accounted for as available-for-sale at June 30, 2013 and June 30, 2012 comprise (US$ millions):

June 30, 2013 June 30, 2012 Amortized

cost Unrealized

Fair value Amortized

cost Unrealized

Fair value gains losses gains losses Corporate debt securities $ 1,381 $ 6 $ (17) $ 1,370 $ 1,425 $ - $ (26) $ 1,399Preferred shares 438 43 (10) 471 483 41 (15) 509Asset-backed securities 67 - - 67 6 - - 6Other debt securities 3 - - 3 2 - - 2

Total $ 1,889 $ 49 $ (27) $ 1,911 $ 1,916 $ 41 $ (41) $ 1,916 Unrealized losses on debt securities accounted for as available-for-sale at June 30, 2013 are summarized below (US$ millions):

Less than 12 months 12 months or greater Total Fair

value Unrealized

losses Fair

value Unrealized

losses Fair

value Unrealized

losses Corporate debt securities $ 224 $ (5) $ 173 $ (12) $ 397 $ (17)Preferred shares 23 (2) 106 (8) 129 (10)

Total $ 247 $ (7) $ 279 $ (20) $ 526 $ (27) Unrealized losses on debt securities accounted for as available-for-sale at June 30, 2012 are summarized below (US$ millions):

Less than 12 months 12 months or greater Total Fair

value Unrealized

losses Fair

value Unrealized

losses Fair

value Unrealized

losses Corporate debt securities $ 127 $ (3) $ 339 $ (23) $ 466 $ (26)Preferred shares 179 (15) - - 179 (15)

Total $ 306 $ (18) $ 339 $ (23) $ 645 $ (41) Corporate debt securities comprise investments in bonds and notes. Unrealized losses associated with corporate debt securities are primarily attributable to movements in the credit default swap spread curve applicable to the issuer. Based upon IFC’s assessment of expected credit losses, IFC has determined that the issuer is expected to make all contractual principal and interest payments. Accordingly, IFC expects to recover the cost basis of these securities. Preferred shares comprise investments in preferred equity investments that are redeemable at the option of IFC or mandatorily redeemable by the issuer. Unrealized losses associated with preferred shares are primarily driven by changes in discount rates associated with changes in credit spreads or interest rates, minor changes in exchange rates and comparable market valuations in the applicable sector. Based upon IFC’s assessment of the expected credit losses, IFC expects to recover the cost basis of these securities.

64 _



Debt securities with contractual maturities that are accounted for as available-for-sale have contractual maturities during the years ending June 30, 2014 through June 30, 2018 and thereafter, as follows (US$ millions):

2014 2015 2016 2017 2018 Thereafter Total Corporate debt securities $ 207 $ 201 $ 136 $ 100 $ 319 $ 345 $ 1,308Asset-backed securities 2 2 67 2 1 12 86Preferred shares - - - - - 44 44

Total disbursed portfolio of debt securities with contractual maturities $ 209

$ 203

$ 203

$ 102

$ 320

$ 401

$ 1,438

The expected maturity of asset-backed securities may differ from the contractual maturity, as reported above, due to prepayment features. In addition, IFC has $505 million of redeemable preferred shares and other debt securities with undefined maturities ($489 million - June 30, 2012). The currency composition and average contractual rate of debt securities with contractual maturities that are accounted for as available-for-sale are summarized below:

June 30, 2013 June 30, 2012

Amount

(US$ millions)

Average contractual

rate (%) Amount

(US$ millions)

Average contractual

rate (%) US dollar $ 816 3.5 $ 541 3.5Brazilian real 261 7.4 511 10.2Euro 100 3.3 69 2.6South African rand 100 5.6 121 6.1Turkish lira 88 7.9 25 8.1Other non-OECD currencies 73 5.3 169 6.7

Total disbursed portfolio of debt securities with contractual maturities $ 1,438 4.7 $ 1,436 6.5

After the effect of interest rate swaps and currency swaps, IFC’s debt securities with contractual maturities that are accounted for as available-for-sale are principally denominated in variable rate US dollars. NOTE G – EQUITY INVESTMENTS

Income from equity investments for the years ended June 30, 2013, June 30, 2012 and June 30, 2011 comprises the following (US$ millions):

2013 2012 2011

Realized gains on equity sales, net $ 921 $ 2,000 $ 737Gains on non-monetary exchanges 6 3 217Dividends and profit participations 248 274 280Custody, fees and other (8) - (6)Other-than-temporary impairments:

Equity investments at cost less impairment (152) (272) (87)Equity investments available-for-sale (289) (420) (131)

Total other-than-temporary impairments (441) (692) (218)

Unrealized gains (losses) on equity investments 26 (128) 454

Total income from equity investments $ 752

$

1,457

$ 1,464

Dividends and profit participations include $36 million at June 30, 2013 ($43 million - year ended June 30, 2012; $57 million - year ended June 30, 2011) of receipts received in freely convertible currency, net of cash disbursements, in respect of investments accounted for under the cost recovery method, for which cost has been fully recovered.

Equity investments include several private equity funds that invest primarily in emerging markets across a range of sectors and that are accounted for at fair value under the Fair Value Option. These investments cannot be redeemed. Instead distributions are received through the liquidation of the underlying assets of the funds. IFC estimates that the underlying assets of the funds will be liquidated over five to eight years. The fair values of all these funds have been determined using the net asset value of IFC’s ownership interest in partners’ capital and totaled $2,687 million as of June 30, 2013 ($2,181 million - June 30, 2012).

_ 65



NOTE H – INVESTMENT TRANSACTIONS COMMITTED BUT NOT DISBURSED OR UTILIZED Loan, equity and debt security commitments signed but not yet disbursed, and guarantee and client risk management facilities signed but not yet utilized are summarized below (US$ millions):

June 30, 2013 June 30, 2012 Investment transactions committed but not disbursed:

Loans, equity investments and debt securities $ 10,358 $ 9,641Investment transactions committed but not utilized:

Guarantees 1,368 1,087Client risk management facilities 290 250 Total investment transactions committed but not disbursed or utilized $ 12,016 $ 10,978

The disbursements of investment transactions committed but not disbursed or utilized are generally subject to fulfillment of conditions of disbursement. NOTE I – LOAN PARTICIPATIONS

Loan participations signed as commitments for which disbursement has not yet been made and loan participations disbursed and outstanding which are serviced by IFC for participants are as follows (US$ millions): June 30, 2013 June 30, 2012 Loan participations signed as commitments but not disbursed $ 1,961 $ 1,880Loan participations disbursed and outstanding which are serviced by IFC $ 6,621 $ 6,463 NOTE J – RECEIVABLES AND OTHER ASSETS

Receivables and other assets are summarized below (US$ millions):

June 30, 2013 June 30, 2012 Receivables from unsettled security trades $ 236 $ 691Accrued interest income on time deposits and securities 135 126Accrued income on derivative instruments 440 507Accrued interest income on loans 207 229Headquarters building:

Land 89 89Building 233 225Less: Accumulated building depreciation (122) (106)

Headquarters building, net 200 208

Deferred charges and other assets 1,063 1,068

Total receivables and other assets $ 2,281 $ 2,829

66 _



NOTE K – BORROWINGS

Market borrowings and associated derivatives

IFC's borrowings outstanding from market sources and currency and interest rate swaps, net of unamortized issue premiums and discounts, are summarized below:

June 30, 2013

Market borrowings Currency swaps

payable (receivable)

Interest rate swaps notional principal

payable (receivable) Net currency obligation

Amount (US$

millions)

Weighted average rate (%)

Amount (US$

millions)


Notional amount (US$

millions)


Amount (US$

millions)


US dollar $ 25,148 1.9 $ 18,400 (0.2) $ 37,767 0.4 $ 43,328 0.3 (37,987) (1.4) Australian dollar 8,136 4.8 (8,136) (4.8) - - - - Japanese yen 2,684 2.6 (2,684) (2.6) - - - - New Zealand dollar 1,616 4.3 (1,616) (4.3) - - - - Turkish lira 1,367 7.5 (1,367) (7.5) - - - - Brazilian real 1,318 6.3 (1,318) (6.3) - - - - South African rand 692 6.3 (692) (6.3) - - - - Russian ruble 498 3.8 (406) (3.8) - - 122 4.6 30 6.4 - - Pound sterling 447 2.9 (447) (2.9) - - - - Chinese renminbi 432 3.0 (81) (1.9) - - 351 3.2 Mexican peso 320 4.8 (320) (4.8) - - - - Euro 277 7.2 (269) (7.4) 8 0.4 8 0.4 (8) (0.3) Canadian dollar 183 2.8 (183) (2.8) - - - - Norwegian kroner 166 3.3 (166) (3.3) - - - - Hong Kong dollar 128 5.1 (128) (5.1) - - - - Nigerian naira 74 10.2 (49) (10.2) - - 25 10.2 Costa Rican colones 60 7.9 (60) (7.9) - - - - C.F.A. franc 40 4.3 - - - - 40 4.3 South Korean won 39 1.8 (39) (1.8) - - - - New Ghanaian cedi 11 14.9 (11) (14.9) - - - - Dominican pesos 9 10.5 - - - - 9 10.5 Principal at face value 43,645 $ 458 $ (220) $ 43,883 0.4Borrowings under the short-

term Discount Note Program 1,316 44,961 Unamortized discounts, net (499) Total market borrowings 44,462 Fair value adjustments 177 Carrying amount of market

borrowings $ 44,639

_ 67



June 30, 2012

Market borrowings Currency swaps

payable (receivable)

Interest rate swaps notional principal

payable (receivable) Net currency obligation

Amount (US $

millions)


Amount (US $

millions)


Notional amount (US $

millions)


Amount (US $

millions)


US dollar $ 22,573 2.3 $ 17,946 (0.5) $ 35,208 0.7 $ 40,273 0.6 (35,454) (1.7) Australian dollar 9,048 5.4 (9,048) (5.4) - - - - Japanese yen 3,831 2.1 (3,831) (2.1) - - - - Turkish lira 1,801 8.9 (1,801) (8.9) - - - - New Zealand dollar 1,264 5.9 (1,264) (5.9) - - - - Brazilian real 913 8.4 (913) (8.4) - - - - Canadian dollar 780 4.6 (780) (4.6) - - - - South African rand 629 6.9 (629) (6.9) - - - - Pound sterling 490 3.1 (490) (3.1) - - - - Chinese renminbi 339 3.2 - - - - 339 3.2 Norwegian kroner 277 3.4 (277) (3.4) - - - - Euro 267 6.6 (259) (6.8) 8 1.0 8 1.0 (8) (0.8) - - Singapore dollar 158 1.1 (158) (1.1) - - - - Hong Kong dollar 128 5.1 (128) (5.1) - - - - Mexican peso 124 6.0 (124) (6.0) - - - - Swiss franc 111 4.6 (111) (4.6) - - - - Costa Rican colones 60 7.9 (60) (7.9) - - - - South Korean won 39 1.8 (39) (1.8) - - - - C.F.A. franc 38 4.3 - - - - 38 4.3 Russian ruble 30 5.8 (30) (5.8) - - - - 30 6.5 30 6.5 Principal at face value 42,900 $ (1,966) $ (246) $ 40,688 0.7Borrowings under the short-

term Discount Note Program 1,400 44,300 Unamortized discounts, net (640) Total market borrowings 43,660 Fair value adjustments 963 Carrying amount of market

borrowings $ 44,623 The net currency obligations in C.F.A. francs, Chinese renminbi, Dominican pesos, Nigerian naira, and Russian rubles at June 30, 2013 have generally been invested and/or onlent to the clients in such currencies. The weighted average remaining maturity of IFC’s borrowings from market sources was 4.1 years at June 30, 2013 (5.5 years - June 30, 2012). Charges on borrowings for the year ended June 30, 2013 include $4 million of interest expense on secured borrowings ($5 million - year ended June 30, 2012; $4 million - year ended June 30, 2011) and is net of $11 million of gains on buybacks of market borrowings ($19 million - June 30, 2012; $10 million - year ended June 30, 2011). The net nominal amount payable from currency swaps of $458 million and the net notional amount receivable from interest rate swaps of $220 million at June 30, 2013 (receivable of $1,966 million from currency swaps and of $246 million from interest rate swaps - June 30, 2012), shown in the above table, are represented by currency and interest rate swap assets at fair value of $1,503 million and currency and interest rate swap liabilities at fair value of $1,823 million ($3,369 million and $627 million - June 30, 2012), included in derivative assets and derivative liabilities, respectively, on the consolidated balance sheet. Short-term market borrowings

IFC’s short-term Discount Note Program has maturities ranging from overnight to one year. The amount outstanding under the program at June 30, 2013 is $1,316 million ($1,400 million - June 30, 2012). Charges on borrowings for the year ended June 30, 2013, include $2 million in respect of this program ($1 million - June 30, 2012; $3 million - June 30, 2011).

68 _



Borrowings from IBRD Borrowings outstanding from IBRD and currency are summarized below:

June 30, 2013 June 30, 2012

Principal amount

(US$ millions)

Weighted average cost (%)

Principal amount

(US$ millions)

Weighted average cost (%)

Saudi Arabian riyal $ 34 4.0 $ 42 4.0 US dollar 196 0.2 - -

Total borrowings outstanding from IBRD $ 230 $ 42 The weighted average remaining maturity of borrowings from IBRD was 3.8 years at June 30, 2013 (2.7 years - June 30, 2012). Charges on borrowings for the year ended June 30, 2013, includes $2 million ($2 million - year ended June 30, 2012; $2 million - year ended June 30, 2011) in respect of borrowings from IBRD. Maturity of borrowings

The principal amounts repayable on borrowings outstanding in all currencies, gross of any premiums or discounts, during the years ending June 30, 2014, through June 30, 2018, and thereafter are summarized below (US$ millions):

2014 2015 2016 2017 2018 Thereafter Total Borrowings from market sources $ 9,264 $ 7,053 $ 6,236 $ 7,027 $ 8,191 $ 5,874 $ 43,645Borrowings under the short-term


1,316

-

-

-

-

-

1,316Borrowings from IBRD 8 8 8 8 198 - 230

Total borrowings, gross $ 10,588 $ 7,061 $ 6,244 $ 7,035 $ 8,389 $ 5,874 $ 45,191Unamortized discounts, net (499)Fair value adjustments 177

Carrying amount of borrowings $ 44,869

After the effect of interest rate and currency swaps, IFC’s borrowings generally reprice within one year. NOTE L – PAYABLES AND OTHER LIABILITIES Payables and other liabilities are summarized below (US$ millions):

June 30, 2013 June 30, 2012 Accrued charges on borrowings $ 395 $ 491Accrued charges on derivative instruments 153 180Payables for unsettled security trades 179 477Secured borrowings 86 100Liabilities under retirement benefit plans 183 338Accounts payable, accrued expenses and other liabilities 1,225 1,162Deferred income 114 110

Total payables and other liabilities $ 2,335 $ 2,858

NOTE M – CAPITAL TRANSACTIONS

On July 20, 2010, the Board of Directors recommended that the Board of Governors approve an increase in the authorized share capital of IFC of $130 million, to $2,580 million, and the issuance of $200 million of shares (including $70 million of unallocated shares). The resolution recommended by the Board of Directors was adopted by the Board of Governors on March 9, 2012. The amendment to the Articles of Agreement and the increase in the authorized share capital have become effective on June 27, 2012. During the year ended June 30, 2013, 31,321 shares, at a par value of $1,000 each, were subscribed and paid by member countries (2,500 shares at a par value of $1,000 each - year ended June 30, 2012; 0 shares at a par value of $1,000 each - year ended June 30, 2011).

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Under IFC’s Articles of Agreement, in the event a member withdraws from IFC, IFC and the member may negotiate on the repurchase of the member’s capital stock on such terms as may be appropriate under the circumstances. Such agreement may provide, among other things, for a final settlement of all obligations of the member to IFC. If such an agreement is not made within six months after the member withdraws or such other time as IFC and the member may agree, the repurchase price of the member’s capital stock shall be the value thereof shown by the books of IFC on the day when the member withdraws. The repurchase of capital stock is subject to certain conditions including payments in installments, at such times and in such available currency or currencies as IFC reasonably determines, taking into account the financial position of IFC. IFC’s Articles of Agreement also provide for the withdrawing member to repay losses on loans and equity investments in excess of reserves provided on the date of withdrawal. NOTE N – OTHER INCOME Other income for the year ended June 30, 2013, predominantly comprises $25 million of fees collected from clients ($20 million - year ended June 30, 2012; $24 million - year ended June 30, 2011), $41 million of income from consolidated entities ($28 million - year ended June 30, 2012; $29 million - year ended June 30, 2011) and income under other reimbursable arrangements of $8 million ($10 million - year ended June 30, 2012; $6 million - year ended June 30, 2011). NOTE O – RETAINED EARNINGS DESIGNATIONS AND RELATED EXPENDITURES AND ACCUMULATED OTHER COMPREHENSIVE INCOME Designated retained earnings The components of designated retained earnings and related expenditures are summarized below (US$ millions):

Grants to

IDA Advisory services

Performance-based grants

SME Ventures for IDA

countries


Project Development

Fund

Total designated

retained earnings

At June 30, 2010

$

-

$ 313

$ 101

$ 37

$ 30

$ 481

Year ended June 30, 2011


600 10 - - - 610


earnings (600) (106) (47) (3) - (756)

At June 30, 2011 $ - $ 217 $ 54 $ 34 $ 30 $ 335 Year ended June 30, 2012


330 69 - - - 399


earnings (330) (67) (13) (2) - (412)

At June 30, 2012 $ - $ 219 $ 41 $ 32 $ 30 $ 322

Year ended June 30, 2013 Designations of retained

earnings 340 80 - - - 420


earnings (340) (100) (10) (4) (10) (464)

At June 30, 2013 $ - $ 199 $ 31 $ 28 $ 20 $ 278 On August 9, 2012, the Board of Directors approved a designation of $340 million of IFC’s retained earnings for grants to IDA and $80 million of IFC’s retained earnings for advisory services. On October 12, 2012, the Board of Governors noted with approval the designations approved by the Board of Directors. IFC recognizes designation of retained earnings for advisory services when the Board of Directors approves it and recognizes designation of retained earnings for grants to IDA when it is noted with approval by the Board of Governors. On January 15, 2013, IFC recognized expenditures against grants to IDA on signing of a grant agreement between IDA and IFC concerning the transfer to IDA and use of funds corresponding to designation of retained earnings for grants to IDA approved by the Board of Directors on August 9, 2012 and noted with approval by the Board of Governors on October 12, 2012.

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Accumulated other comprehensive income

The components of accumulated other comprehensive income at June 30, 2013 and June 30, 2012 are summarized as follows (US$ millions):

June 30, 2013 June 30, 2012 Net unrealized gains on available-for-sale debt securities $ 22 $ -Net unrealized gains on available-for-sale equity investments 1,835 1,450Unrecognized net actuarial losses and unrecognized prior service costs on benefit plans (736) (937)

Total accumulated other comprehensive income $ 1,121 $ 513

NOTE P – NET GAINS AND LOSSES ON OTHER NON-TRADING FINANCIAL INSTRUMENTS ACCOUNTED FOR AT FAIR VALUE Net gains and losses on other non-trading financial instruments accounted for at fair value for the years ended June 30, 2013, June 30, 2012 and June 30, 2011, comprises (US$ millions):

2013 2012 2011 Net realized gains and losses on derivatives associated with investments:

Realized (losses) gains on derivatives associated with loans $ (30) $ (1) $ 4Realized gains on derivatives associated with debt securities 25 - 11Realized gains on derivatives associated with equity investments 40 12 48

Total net realized gains on derivatives associated with investments 35 11 63

Net gains and losses on non-monetary exchanges of derivatives associated with investments:

Gains (losses) on non-monetary exchanges of derivatives associated with loans 2 (1) -Gains on non-monetary exchanges of derivatives associated with debt securities - 11 8Gains on non-monetary exchanges of derivatives associated with equity investments - - 14 Total net non-monetary gains on derivatives associated with investments 2 10 22

Net unrealized gains and losses on other non-trading financial instruments: Unrealized gains and losses on derivatives associated with investments:

Unrealized gains (losses) on derivatives associated with loans 279 (99) (68)Unrealized gains (losses) on derivatives associated with debt securities 134 (14) (30)Unrealized (losses) gains on derivatives associated with equity investments (60) 79 75

Total unrealized gains (losses) on derivatives associated with investments 353 (34) (23)

Unrealized gains and losses on market borrowings accounted for at fair value: Credit spread component 31 (59) (44)Interest rate, foreign exchange and other components 755 (1,148) 187

Total unrealized gains (losses) on market borrowings 786 (1,207) 143

Unrealized (losses) gains on derivatives associated with market borrowings (754) 1,001 (50)

Net unrealized gains (losses) on market borrowings and associated derivatives 32 (206) 93

Total net unrealized gains (losses) on other non-trading financial instruments 385 (240) 70

Net gains (losses) on other non-trading financial instruments accounted for at fair value $ 422 $ (219) $ 155

As discussed in Note A, “Summary of significant accounting and related policies”, market borrowings with associated derivatives are accounted for at fair value under the Fair Value Option. Differences arise between the movement in the fair value of market borrowings and the fair value of the associated derivatives primarily due to the different credit characteristics. The change in fair value reported in “Net unrealized gains (losses) on market borrowings and associated derivatives” includes the impact of changes in IFC's own credit spread. As credit spreads widen, unrealized gains are recorded and when such credit spreads narrow, unrealized losses are recorded (notwithstanding the impact of other factors, such as changes in risk-free interest and foreign currency exchange rates). The magnitude and direction (gain or loss) can be volatile from period to period but do not alter the cash flows on the market borrowings.

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NOTE Q – DERIVATIVE AND OTHER FINANCIAL INSTRUMENTS

As discussed in Note A, “Summary of significant accounting and related policies”, IFC enters into transactions in various derivative instruments for financial risk management purposes in connection with its principal business activities, including lending, investing in debt securities, equity investments, client risk management, borrowing, liquid asset management and asset and liability management. None of these derivative instruments are designated as hedging instruments under ASC Topic 815. Note A describes how and why IFC uses derivative instruments. The fair value of derivative instrument assets and liabilities by risk type at June 30, 2013 and June 30, 2012 is summarized as follows (US$ millions):

June 30, 2013 Fair value

June 30, 2012 Consolidated balance sheet location Fair value Derivative assets

Interest rate $ 684 $ 905 Foreign exchange 124 174 Interest rate and currency 1,787 3,116 Equity 780 418 Other derivative 1 2

Total derivative assets $ 3,376 $ 4,615

Derivative liabilities Interest rate $ 446 $ 410 Foreign exchange 41 68 Interest rate and currency 1,823 782 Equity and other - 1

Total derivative liabilities $ 2,310 $ 1,261 The effect of derivative instruments contracts on the consolidated income statement for the years ended June 30, 2013, June 30, 2012 and June 30, 2011 is summarized as follows (US$ millions): Derivative risk category Income statement location 2013 2012 2011 Interest rate Income from loans and guarantees $ (48) $ (39) $ (50) Income from liquid asset trading activities (237) (282) (238) Charges on borrowings 373 440 464 Other income 9 2 11 Net gains and losses on other non-trading financial

instruments accounted for at fair value (365) 267 (38) Foreign exchange Foreign currency transaction gains and losses

on non-trading activities 134 75 46 Income from liquid asset trading activities (179) (22) (33) Net gains and losses on other non-trading financial

instruments accounted for at fair value 14 26 (11) Interest rate and currency Income from loans and guarantees (157) (187) (198) Income from debt securities (29) (61) (79) Income from liquid asset trading activities 164 (74) (32) Charges on borrowings 910 940 943 Foreign currency transaction gains and losses

on non-trading activities (2,829) 512 993 Net gains and losses on other non-trading financial

instruments accounted for at fair value (105) 660 (81) Other income (7) - (5) Equity Net gains and losses on other non-trading financial

instruments accounted for at fair value 93 40 135 Other derivative contracts Net gains and losses on other non-trading financial

instruments accounted for at fair value (1) (5) 7 Total $ (2,260) $ 2,292 $ 1,834 The income related to each derivative instrument category includes realized and unrealized gains and losses.

72 _



At June 30, 2013, the outstanding volume, measured by US$ equivalent notional, of interest rate contracts was $55,400 million ($51,147 million - June 30, 2012), foreign exchange contracts was $10,853 million ($11,605 million - June 30, 2012) and interest rate and currency contracts was $31,765 million ($28,730 million - June 30, 2012). At June 30, 2013, there were 263 equity risk and other contracts related to IFC’s loan and equity investment portfolio recognized as derivatives assets or liabilities under ASC Topic 815 (221 equity risk and other contracts - June 30, 2012). IFC enters into interest rate and currency derivative instruments under standard industry contracts that contain credit risk-linked contingent features with respect to collateral requirements. Should IFC’s credit rating be downgraded from the current AAA, the credit support annexes of these standard swap agreements detail, by swap counterparty, the collateral requirements IFC must satisfy in this event. The aggregate fair value of derivatives containing a credit risk-linked contingent feature in a net liability position was $724 million at June 30, 2013 ($105 million - June 30, 2012). At June 30, 2013, IFC had no collateral posted under these agreements. If IFC was downgraded from the current AAA to AA+ or less, then collateral in the amount of $233 million would be required to be posted against net liability positions with counterparties at June 30, 2013 ($6 million - June 30, 2012). As of June 30, 2013, IFC had $245 million ($183 million - June 30, 2012) of outstanding obligations to return cash collateral under master netting agreements. NOTE R – FAIR VALUE MEASUREMENTS Many of IFC’s financial instruments are not actively traded in any market. Accordingly, estimates and present value calculations of future cash flows are used to estimate the fair values. Determining future cash flows for fair value estimation is subjective and imprecise, and minor changes in assumptions or methodologies may materially affect the estimated values. The excess or deficit resulting from the difference between the carrying amounts and the fair values presented does not necessarily reflect the values which will ultimately be realized, since IFC generally holds loans, borrowings and other financial instruments with contractual maturities, with the aim of realizing their contractual cash flows. The estimated fair values reflect the interest rate environments as of June 30, 2013 and June 30, 2012. In different interest rate environments, the fair value of IFC’s financial assets and liabilities could differ significantly, especially the fair value of certain fixed rate financial instruments. Reasonable comparability of fair values among financial institutions is not likely, because of the wide range of permitted valuation techniques and numerous estimates that must be made in the absence of secondary market prices. This lack of objective pricing standards introduces a greater degree of subjectivity and volatility to these derived or estimated fair values. Therefore, while disclosure of estimated fair values of financial instruments is required, readers are cautioned in using these data for purposes of evaluating the financial condition of IFC. The fair values of the individual financial instruments do not represent the fair value of IFC taken as a whole. IFC’s financial instruments measured at fair value have been classified as Level 1, Level 2 or Level 3 based on the fair value hierarchy in ASC 820, as described in Note A. i) Level 1 primarily consists of financial instruments whose values are based on unadjusted quoted market prices. ii) Level 2 financial instruments are valued using models and other valuation methodologies and substantially all of the inputs are observable in

the market place, can be derived from observable data or are supported by observable levels at which market transactions are executed. iii) Level 3 consists of financial instruments whose fair value is estimated based on internally developed models or methodologies utilizing inputs

that are non-observable. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement.

All of IFC’s financial instruments in its liquid assets portfolio are managed according to an investment authority approved by the Board of Directors and investment guidelines approved by IFC’s Corporate Risk Committee (CRC), a subcommittee of IFC’s Management Team. Third party independent vendor prices are used to price the vast majority of the liquid assets. The vendor prices are evaluated by IFC's Treasury department and IFC’s Integrated Risk department, maintains oversight for the pricing of liquid assets. IFC’s regional and industry departments are primarily responsible for fair valuing IFC’s investment portfolio (equity investments, debt securities, loan investments and related derivatives). IFC’s Portfolio Valuation Unit and Loss Provisioning Unit in the Accounting and Financial Operations department, provide oversight over the fair valuation process by monitoring and reviewing the fair values of IFC’s investment portfolio. IFC’s Valuation Oversight Subcommittee, which is a subcommittee of CRC, reviews significant valuation principles and the reasonableness of high exposure valuations quarterly. IFC's borrowings are fair valued by the Quantitative Analysis Group in IFC’s Treasury department under the oversight of the Integrated Risk department.

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The methodologies used and key assumptions made to estimate fair values as of June 30, 2013, and June 30, 2012, are summarized below. Liquid assets - The primary pricing source for the liquid assets is valuations obtained from external pricing services (vendor prices). The most liquid securities in the liquid asset portfolio are exchange traded futures, options, and US Treasuries. For exchange traded futures and options, exchange quoted prices are obtained and these are classified as Level 1 in accordance with ASC 820. Liquid assets valued using quoted market prices are also classified as Level 1. Securities valued using vendor prices for which there is evidence of high market trade activity may also be classified as Level 1. US Treasuries are valued using index prices and also classified as Level 1. The remaining liquid assets valued using vendor prices are classified as Level 2 or Level 3 based on the results of IFC’s evaluation of the vendor's pricing methodologies. Most vendor prices use some form of matrix pricing methodology to derive the inputs for projecting cash flows or to derive prices. When vendor prices are not available, liquid assets are valued internally by IFC using yield-pricing approach or comparables model approach and these are classified as Level 2 or Level 3 depending on the degree that the inputs are observable in the market. The critical factors in valuing liquid assets in both Level 2 and Level 3 are the estimation of cash flows and yield. Other significant inputs for valuing corporate securities, quasi-government securities and sovereign or sovereign-guaranteed securities include reported trades, broker/dealer quotes, benchmark securities, option adjusted spread curve, volatilities, and other reference data. In addition to these inputs, valuation models for securitized or collateralized securities use collateral performance inputs, such as weighted average coupon rate, weighted average maturity, conditional prepayment rate, constant default rate, vintage, and credit enhancements. Loans and debt securities - Loans and debt securities in IFC’s investment portfolio that do not have available market prices are primarily valued using discounted cash flow approaches. All loans measured at fair value are classified as Level 3. Certain loans contain embedded conversion and/or income participation features. If not bifurcated as standalone derivatives, these features are considered in determining the loans’ fair value based on the quoted market prices or other calculated values of the equity investments into which the loans are convertible and the discounted cash flows of the income participation features. The valuation techniques and significant unobservable inputs for loans and debt securities classified as Level 3 as of June 30, 2013 and June 30, 2012 are presented below:

June 30, 2013

Valuation technique

Fair value (US$

millions) Significant inputs Range

(%)

Weighted average

(%) Debt securities - preferred shares Discounted cash flows $ 267 Discount rate 6.9 - 18.0 12.0

Relative valuations 130 Valuation multiples* Net asset value 148 Third party pricing Recent transactions 33 Other techniques 7

Total preferred shares 585

Loans and other debt securities Discounted cash flows 1,545 Credit default swap spreads 1.0 - 50.0 2.9

Recent transactions

416 Expected recovery rates 0.0 - 85.0 45.6

Other techniques 98

Total loans and other debt securities 2,059

Total $ 2,644

June 30, 2012

Valuation technique

Fair value (US$


(%)

Weighted average

(%) Debt securities - preferred shares Discounted cash flows $ 159 Discount rate 8.0 - 22.2 13.3

Relative valuations 91 Valuation multiples* Net asset value 123 Third party pricing Recent transactions 275 n/a n/a Other techniques 9

Total preferred shares 657

Loans and other debt securities Discounted cash flows 2,037 Credit default swap spreads 0.7 - 80.0 3.9

Recent transactions

57 Expected recovery rates 0.0 - 85.0

n/a 44.8 n/a

Other techniques 8

Total loans and other debt securities 2,102

Total $ 2,759 * In case of valuation techniques with multiple significant inputs, the range and weighted average are not provided.

74 _



Borrowings - Fair values derived by using quoted prices in active markets are classified as Level 1. Fair values derived by determining the present value of estimated future cash flows using appropriate discount rates and option specific models where appropriate are classified as Level 2. The significant inputs used in valuing borrowings classified as Level 2 are presented below: Classes Significant Inputs Structured bonds Foreign exchange rate and inter-bank yield curves, IFC's credit curve and swaption volatility matrix, foreign

exchange rate volatility, equity spot price, volatility and dividend yield. Unstructured bonds Inter-bank yield curve and IFC's credit curve. As of June 30, 2013 IFC had four inflation index linked structured borrowing issues classified as level 3 with a total fair value of $391 million. The significant unobservable inputs in the valuation of this structure are the correlations between and the weights of the constituents of the inflation index. Derivative instruments - The various classes of derivative instruments include interest rate contracts, foreign exchange contracts, interest rate and currency contracts, equity contracts and other derivative contracts. Certain over the counter derivatives in the liquid asset portfolio priced in-house are classified as Level 2, while certain over the counter derivatives priced using external manager prices are classified as Level 3. Fair values for derivative instruments are derived by determining the present value of estimated future cash flows using appropriate discount rates and option specific models where appropriate. The significant inputs used in valuing the various classes of derivative instruments classified as Level 2 and significant unobservable inputs for derivative instruments classified as Level 3 as of June 30, 2013 and June 30, 2012 are presented below: Level 2 derivatives Significant Inputs Interest rate contracts Inter-bank yield curves, foreign exchange basis curve and yield curves specified to index floating rates. Foreign exchange Foreign exchange rate, inter-bank yield curves and foreign exchange basis curve. Interest rate and currency rates Foreign exchange rate, inter-bank yield curves, foreign exchange basis curve and yield curves specified to

index floating rates.

June 30, 2013

Level 3 derivatives Type

Fair value (US$


(%)

Weighted average

(%) Equity related derivatives Fixed strike price options $ 38 Volatilities 1.0 - 70.6 21.5 Variable strike price options 742 Contractual strike price* Other techniques 1 Borrowing related structured currency swap

Inflation index linked note (26)

Inflation index weights and correlations

Total $ 755

June 30, 2012

Level 3 derivatives Type

Fair value (US$


(%)

Weighted average

(%) Equity related derivatives Fixed strike price options $ 76 Volatilities 14.4 -115.1 34.9 Variable strike price options 332 Contractual strike price* Other techniques 7 Other derivatives 4 Total $ 419 * In case of valuation techniques with multiple significant inputs, the range and weighted average are not provided

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Equity investments - Equity investments valued using quoted prices in active markets are classified as Level 1. Equity investments classified as Level 2 were valued using quoted prices in inactive markets. The valuation techniques and significant unobservable inputs for equity investments classified as Level 3 as of June 30, 2013 and June 30, 2012 are presented below:

June 30, 2013

Sector Valuation technique Fair value

(US$ millions) Significant inputs Range (%) Weighted

average (%) Banking and other financial Discounted cash flows $ 674 Cost of equity 9.2 - 22.1 15.0

institutions Asset growth rate (5.9) - 170.0 9.7 Return on assets (14.2) - 6.2 2.2 Perpetual growth rate 2.5 - 11.0 5.0 Relative valuations 261 Price/book value 1.0 - 1.3 1.3 Listed price (adjusted) 203 Discount for lock-up 8.1 - 30.0 11.2 Recent transactions 271 Other techniques 96

Total banking and other financial institutions 1,505

AMC Funds Net Asset Value 886 Recent transactions 2 Other funds Net Asset Value 1,801 Third party pricing Recent transactions 42

Total funds 2,731

Others Discounted cash flows 318 Weighted average cost of capital 6.7 - 16.7 11.8

Cost of equity 8.7 - 19.1 13.1 Relative valuations 174 Valuation multiples* Listed price (adjusted) 29 Discount for lock-up 2.1 - 24.0 11.0 Recent transactions 156 Other techniques 138

Total others 815


76 _



June 30, 2012

Sector Valuation technique Fair value

(US$ millions) Significant inputs Range (%) Weighted

average (%) Banking and other financial Discounted cash flows $ 514 Cost of equity 9.8 - 22.7 16.8

institutions Asset growth rate (34.0) - 113.0 20.1 Return on assets (8.6) - 7.4 2.1 Perpetual growth rate 3.0 - 11.0 5.2 Relative valuations 203 Price/book value 1.5 - 2.4 1.5 Listed price (adjusted) 207 Discount for lock-up 9.4 - 27.8 12.5 Recent transactions 70 n/a n/a Other techniques 14

Total banking and other financial institutions 1,008

AMC Funds Net Asset Value 491 Other funds Net Asset Value 1,690 Third party pricing Recent transactions 103 n/a n/a

Total funds 2,284

Others Discounted cash flows 177 Weighted average cost of capital 6.8 - 16.1 10.4

Cost of equity 10.2 - 16.4 13.9 Relative valuations 135 Valuation multiples* Listed price (adjusted) 37 Discount for lock-up 5.0-18.7 6.5 Recent transactions 151 n/a n/a Other techniques 161

Total others 661


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Fair value of assets and liabilities

Estimated fair values of IFC’s financial assets and liabilities and off-balance sheet financial instruments at June 30, 2013 and June 30, 2012 are summarized below (US$ millions).

June 30, 2013 June 30, 2012

Carrying amount Fair value

Carrying amount Fair value

Financial assets Cash and due from banks, time deposits, trading securities and

securities purchased under resale agreements $ 37,191 $ 37,191 $ 36,879 $ 36,879 Investments:

Loans at amortized cost, net of reserves against losses 20,295 21,801 18,845 19,452Loans held for sale at lower of amortized cost or fair value 43 84 60 84Loans accounted for at fair value under the Fair Value Option 493 493 591 591

Total loans 20,831 22,378 19,496 20,127

Equity investments at cost less impairment 3,119 4,733 3,066 5,269Equity investments accounted for at fair value as available-for-

sale 4,230 4,230 3,231 3,231Equity investments accounted for at fair value 4,346 4,346 3,477 3,477

Total equity investments 11,695 13,309 9,774 11,977

Debt securities accounted for at fair value as available-for-sale 1,911 1,911 1,916 1,916Debt securities accounted for at fair value under the Fair Value

Option 240 240 252 252

Total debt securities 2,151 2,151 2,168 2,168

Total investments 34,677 37,838 31,438 34,272 Derivative assets:

Borrowings-related 1,503 1,503 3,369 3,369Liquid asset portfolio-related and other 376 376 264 264Investment-related 1,378 1,378 852 852Client risk management-related 119 119 130 130

Total derivative assets 3,376 3,376 4,615 4,615

Other investment-related financial assets 5 120 37 158 Financial liabilities Securities sold under repurchase agreements and payable for

cash collateral received $ 5,736 $ 5,736 $ 6,397 $ 6,397 Market and IBRD borrowings outstanding 44,869 44,863 44,665 44,669 Derivative liabilities:

Borrowings-related 1,823 1,823 627 627Liquid asset portfolio-related and other 210 210 223 223Investment-related 157 157 281 281Client risk management-related 120 120 130 130

Total derivative liabilities 2,310 2,310 1,261 1,261

Other investment-related financial assets comprise standalone options and warrants that do not meet the definition of a derivative. The fair value of loan commitments amounted to $24 million at June 30, 2013 ($20 million - June 30, 2012). Fair values of loan commitments are based on present value of loan commitment fees.

78 _



Fair value hierarchy

The following tables provide information as of June 30, 2013 and June 30, 2012, about IFC’s financial assets and financial liabilities measured at fair value on a recurring basis. As required by ASC 820, financial assets and financial liabilities are classified in their entirety based on the lowest level input that is significant to the fair value measurement (US$ millions):

June 30, 2013 Level 1 Level 2 Level 3 Total

Trading securities: Money market funds $ 768 $ - $ - $ 768Treasury securities 6,098 - - 6,098Foreign government obligations 6,491 - - 6,491Government guaranteed obligations 436 55 - 491Supranational bonds 131 26 - 157Municipal bonds 900 - - 900Agency bonds 170 2 - 172Foreign agency bonds 893 - - 893Agency residential mortgage-backed securities 184 63 - 247Asset-backed securities - 3,533 5 3,538Foreign asset-backed securities - 2,359 - 2,359Corporate bonds 4,930 - - 4,930Commercial mortgage-backed securities - 601 - 601Foreign residential mortgage-backed securities 19 2,281 - 2,300Non-agency residential mortgage-backed securities - 311 34 345Collateralized debt and collateralized loan obligations - 13 46 59

Total trading securities 21,020* 9,244 85 30,349 Loans (outstanding principal balance $474) - - 493 493 Equity investments:

Banking and non-banking financial institutions 1,669 18 1,464 3,151Insurance companies 229 73 41 343Funds - - 2,731 2,731Others 1,490 46 815 2,351

Total equity investments 3,388 137 5,051 8,576Debt securities:

Corporate debt securities - - 1,474 1,474Preferred shares - - 585 585Asset-backed securities - - 87 87Other debt securities - - 5 5

Total debt securities - - 2,151 2,151Derivative assets:

Interest rate contracts - 684 - 684Foreign exchange - 124 - 124Interest rate and currency - 1,787 - 1,787Equity - - 780 780Others - - 1 1

Total derivative assets - 2,595 781 3,376 Total assets at fair value $ 24,408 $ 11,976 $ 8,561 $ 44,945Borrowings:

Structured bonds $ - $ 3,606 $ 391 $ 3,997Unstructured bonds 24,798 14,129 - 38,927

Total borrowings (outstanding principal balance $43,245**) 24,798 17,735 391 42,924 Derivative liabilities:

Interest rate contracts - 446 - 446Foreign exchange - 41 - 41Interest rate and currency rates - 1,797 26 1,823

Total derivative liabilities - 2,284 26 2,310 Total liabilities at fair value $ 24,798 $ 20,019 $ 417 $ 45,234* includes securities priced at par plus accrued interest, which approximates fair value, with a fair value of $768 million at June 30, 2013. ** includes discount notes (not under the short-term Discount Note Program), with original maturities greater than one year, with principal due at maturity of $2,386 million, with a fair value of $1,925 million as of June 30, 2013. Note: For the year ended June 30, 2013: trading securities with a fair value of $180 million transferred from level 2 to level 1 due to indications of improved market activity; and trading securities with a fair value of $1 million were transferred from level 1 to level 2 due to decrease in market activity. Equity investments with fair value of $72 million transferred from level 1 to level 2 and $49 million from level 2 to level 1 due to decrease/increase in market activities. Bonds issued by IFC with a fair value of $1,090 million transferred from level 1 to level 2 due to change in information quality.

_ 79



June 30, 2012 Level 1 Level 2 Level 3 Total

Trading securities: Money market funds $ 109 $ - $ - $ 109Treasury securities 6,362 - - 6,362Foreign government obligations 6,251 14 - 6,265Government guaranteed obligations 696 1,436 - 2,132Supranational bonds 63 38 - 101Municipal bonds 480 301 - 781Agency bonds (95) 4 - (91)Foreign agency bonds 1,020 171 - 1,191Agency residential mortgage-backed securities 213 62 - 275Asset-backed securities - 3,780 10 3,790Foreign asset-backed securities 1 1,026 - 1,027Corporate bonds 3,503 73 - 3,576Commercial mortgage-backed securities - 874 - 874Foreign residential mortgage-backed securities 24 1,946 - 1,970Non-agency residential mortgage-backed securities - 348 46 394Collateralized debt and collateralized loan obligations - 18 94 112

Total trading securities 18,627* 10,091 150 28,868 Loans (outstanding principal balance $607) - -

591 591

Equity investments:

Banking and non-banking financial institutions 1,353 69 930 2,352Insurance companies 114 13 78 205Funds - - 2,284 2,284Others 1,145 61 661 1,867

Total equity investments 2,612 143 3,953 6,708 Debt securities:

Corporate debt securities - - 1,495 1,495Preferred shares - - 657 657Asset-backed securities - - 7 7Other debt securities - - 9 9

Total debt securities - - 2,168 2,168 Derivative assets:

Interest rate contracts - 905 - 905Foreign exchange - 174 - 174Interest rate and currency rate - 3,116 - 3,116Equity - - 418 418Other - - 2 2

Total derivative assets - 4,195 420 4,615 Total assets at fair value $ 21,239 $ 14,429 $ 7,282 $ 42,950 Borrowings:

Structured bonds $ - $ 6,219 $ - $ 6,219Unstructured bonds 23,444 13,183 - 36,627

Total borrowings (outstanding principal balance $42,523**) 23,444 19,402 - 42,846 Derivative liabilities:

Interest rate contracts - 410 - 410Foreign exchange - 68 - 68Interest rate and currency rates - 782 - 782Equity price risk contracts - - 1 1

Total derivative liabilities - 1,260 1 1,261 Total liabilities at fair value $ 23,444 $ 20,662 $ 1 $ 44,107* includes securities priced at par plus accrued interest, which approximates fair value, with a fair value of $109 million at June 30, 2012. ** includes discount notes (not under the short-term Discount Note Program), with original maturities greater than one year, with principal due at maturity of $3,229 million, with a fair value of $2,640 million as of June 30, 2012. Note: For the year ended June 30, 2012: trading securities with a fair value of $214 million were transferred from level 2 to level 1 due to indications of improved market activity; and, trading securities with a fair value of $749 million were transferred from level 1 to level 2 due to decrease in market activity. Equity investments with fair value of $116 million were transferred from level 1 to level 2 due to decrease in market activity. Bonds issued by IFC with a fair value of $514 million were transferred from level 2 to level 1, while bonds issued with a fair value of $1,952 million were transferred from level 1 to level 2 due to change in information quality.

80 _



The following tables present the changes in the carrying value of IFC’s Level 3 financial assets and financial liabilities for the year ended June 30, 2013 and June 30, 2012 (US$ millions). IFC’s policy is to recognize transfers in and transfers out at the beginning of the reporting period.

Level 3 trading securities for the year ended June 30, 2013 Asset

backed securities

Mortgage backed

securities

Collateralized loan and debt

obligations

Total

Balance as of July 1, 2012 $ 10 $ 46 $ 94 $ 150Transfers out Level 3 (*) (5) - - (5)Net gains and losses (realized and unrealized) in

net income - 9 19 28Purchases, issuances, sales and settlements: Purchases 5 - - 5

Sales (5) - (4) (9) Settlements and others - (21) (63) (84) Balance as of June 30, 2013 $ 5 $ 34 $ 46 $ 85For the year ended June 30, 2013: Net unrealized gains and losses included in net income $ - $ 13 $ 18 $ 31(*)Transfers out of Level 3 are due to availability of observable market data resulting from an increase in market activity for these securities or sales of some securities that were part of June 2012 beginning balance as of June 30, 2013.

Level 3 loans for the year ended June 30, 2013

Loans Total Balance as of July 1, 2012 $ 591 $ 591Net gains and losses (realized and unrealized) in:

Net income 38 38Purchases, issuances, sales and settlements:

Issuances 141 141 Settlements and others (277) (277) Balance as of June 30, 2013 $ 493 $ 493For the year ended June 30, 2013: Net unrealized gains and losses included in net income $ 38 $ 38

Level 3 debt securities for the year ended June 30, 2013 Corporate

securities Preferred

shares Asset

backed securities

Others Total

Balance as of July 1, 2012 $ 1,495 $ 657 $ 7 $ 9 $ 2,168Net gains and losses (realized and unrealized) in:

Net income (14) (37) - (4) (55)Other comprehensive income 14 1 - - 15

Purchases, issuances, sales and settlements: Purchases 387 50 86 - 523Proceeds from sales - (35) - - (35)

Settlements and others (408) (51) (6) - (465) Balance as of June 30, 2013 $ 1,474 $ 585 $ 87 $ 5 $ 2,151 For the year ended June 30, 2013: Net unrealized gains and losses included in net income $ (1) $ (48) $ - $ (4) $ (53) Net unrealized gains and losses included in other comprehensive income $ 18 $ 2 $ (1) $ - $ 19

_ 81



Level 3 equity investments for the year ended June 30, 2013 Banking and

non-banking institutions

Insurance companies

Funds Others Total

Balance as of July 1, 2012 $ 930 $ 78 $ 2,284 $ 661 $ 3,953Transfers into Level 3 (*) 52 - - - 52Transfers out of Level 3 (**) (65) (51) - (33) (149)Net gains and losses (realized and unrealized) in:

Net income 4 (8) 34 (75) (45)Other comprehensive income 43 2 - 6 51

Purchases, issuances, sales and settlements: Purchases 322 21 713 167 1,223Proceeds from sales (13) - (316) (19) (348)

Settlements and others 191 (1) 16 108 314 Balance as of June 30, 2013 $ 1,464 $ 41 $ 2,731 $ 815 $ 5,051For the year ended June 30, 2013: Net unrealized gains and losses included

in net income $ 39

$ (8)

$

(142)

$ (77)

$ (188)

Net unrealized gains and losses included in other comprehensive income

$ 50

$ 2

$

-

$ 5

$ 57

(*) Transfers into Level 3 are due to lack of observable market data resulting from a decrease in market activity for these securities as of June 30, 2013. (**)Transfers out of Level 3 are due to availability of observable market data resulting from an increase in market activity for these securities or sales of some securities that were part of June 2012 beginning balance as of June 30, 2013.

Level 3 derivative assets for the year ended June 30, 2013

Equity Other Total Balance as of July 1, 2012 $ 418 $ 2 $ 420Net gains and losses (realized and unrealized) in:

Net income 93 (1) 92Purchases, issuances, sales and settlements:

Purchases 5 - 5Settlements and others 264 - 264

Balance as of June 30, 2013 $ 780 $ 1 $ 781For the year ended June 30, 2013: Net unrealized gains and losses included in net income $ 78 $ (2) $ 76

Level 3 bond liabilities for the year ended June 30, 2013

Structured Unstructured Total Balance as of July 1, 2012 $ - $ - $ -Net gains and losses (realized and unrealized) in:

Net income 52 - 52Purchases, issuances, sales and settlements:

Issuances (443) - (443) Balance as of June 30, 2013 $ (391) $ - $ (391)For the year ended June 30, 2013: Net unrealized gains and losses included in net income $ 52 $ - $ 52

82 _



Level 3 derivative liabilities for the year ended June 30, 2013

Interest rate and currency Total

Balance as of July 1, 2012 $ - $ -Net gains and losses (realized and unrealized) in:

Net income (34) (34)Purchases, issuances, sales and settlements:

Purchases and other 8 8 Balance as of June 30, 2013 $ (26) $ (26)For the year ended June 30, 2013: Net unrealized gains and losses included in net income $ (34) $ (34)

Level 3 trading securities for the year ended June 30, 2012

Asset backed

securities

Mortgage backed

securities

Collateralized loan and debt

obligations Total Balance as of July 1, 2011 $ 43 $ 64 $ 103 $ 210Transfers into Level 3 (*) 5 - - 5Transfers out of Level 3 (**) (43) (13) - (56)Net gains and losses (realized and unrealized) in:

Net income - (5) 13 8Purchases, issuances, sales and settlements:

Purchases 5 - - 5Settlements and others - - (22) (22)

Balance as of June 30, 2012 $ 10 $ 46 $ 94 $ 150For the year ended June 30, 2012: Net unrealized gains and losses included in net income $ - $ 10 $ 12 $ 22(*) Transfers into Level 3 are due to lack of observable market data resulting from a decrease in market activity for these securities as of June 30, 2012. (**)Transfers out of Level 3 are due to availability of observable market data resulting from an increase in market activity for these securities or sales of some securities that were part of June 2011 beginning balance as of June 30, 2012.

Level 3 loans for the year ended June 30, 2012

Loans Total Balance as of July 1, 2011 $ 637 $ 637Net gains and losses (realized and unrealized) in:

Net income (13) (13)Purchases, issuances, sales and settlements:

Issuances 129 129 Settlements and others (162) (162) Balance as of June 30, 2012 $ 591 $ 591For the year ended June 30, 2012: Net unrealized gains and losses included in net income $ (14) $ (14)

Level 3 debt securities for the year ended June 30, 2012

Corporate securities

Preferred shares

Asset backed

securities Others Total Balance as of July 1, 2011 $ 1,620 $ 516 $ 22 $ 8 $ 2,166Net gains and losses (realized and unrealized) in:

Net income 10 27 - 1 38Other comprehensive income (221) (38) - - (259)

Purchases, issuances, sales and settlements: Purchases 307 214 - - 521Proceeds from sales - (56) - - (56)

Settlements and others (221) (6) (15) - (242) Balance as of June 30, 2012 $ 1,495 $ 657 $ 7 $ 9 $ 2,168For the year ended June 30, 2012: Net unrealized gains and losses included in net income $ (7) $ 13 $ - $ 1 $ 7Net unrealized gains and losses included in other comprehensive income $ (171) $ (38) $ - $ - $ (209)

_ 83



Level 3 equity investments for the year ended June 30, 2012

Banking and non-banking institutions

Insurance companies Funds Others Total

Balance as of July 1, 2011 $ 566 $ 14 $ 2,104 $ 548 $ 3,232Transfers into Level 3 (*) 393 - - 21 414Transfers out of Level 3 (**) (110) - - (59) (169)Net gains and losses (realized and unrealized) in:

Net income (4) (2) (19) (8) (33)Other comprehensive income (3) 41 - 19 57

Purchases, issuances, sales and settlements: Purchases 58 13 436 138 645Proceeds from sales (28) - (237) (1) (266)

Settlements and others 58 12 - 3 73 Balance as of June 30, 2012 $ 930 $ 78 $ 2,284 $ 661 $ 3,953For the year ended June 30, 2012: Net unrealized gains and losses included in net income $ 29 $ (2) $ (157) $ (6) $ (136)Net unrealized gains and losses included in other comprehensive income $ (3) $ 41 $

- $ 19 $ 57

(*) Transfers into Level 3 are due to lack of observable market data resulting from a decrease in market activity for these securities as of June 30, 2012. (**)Transfers out of Level 3 are due to availability of observable market data resulting from an increase in market activity for these securities or sales of some securities that were part of June 2011 beginning balance as of June 30, 2012.

Level 3 derivative assets for the year ended June 30, 2012 Equity Other Total Balance as of July 1, 2011 $ 390 $ 7 $ 397Net gains and losses (realized and unrealized) in:

Net income 40 (5) 35Purchases, issuances, sales and settlements:

Purchases and issuances 8 - 8Settlements and others (20) - (20)

Balance as of June 30, 2012 $ 418 $ 2 $ 420For the year ended June 30, 2012: Net unrealized gains and losses included in net income $ 70 $ (5) $ 65 Gains and losses (realized and unrealized) from trading securities, loans, equity investments and debt securities included in net income for the period are reported on the consolidated income statement in income from liquid asset trading activities, income from loans and guarantees, income from equity investments and income from debt securities, respectively. As of June 30, 2013, equity investments, accounted for at cost less impairment, with a carrying amount of $1,090 million were written down to their fair value of $938 million ($1,519 million and $1,247 million - June 30, 2012), resulting in a loss of $152 million, which was included in income from equity investments in the consolidated income statement during the year ended June 30, 2013 (loss of $272 million - year ended June 30, 2012). The amount of the write-down was based on a Level 3 measure of fair value.

84 _



NOTE S – CURRENCY POSITION

IFC conducts its operations for loans, debt securities, equity investments, time deposits, trading securities, and borrowings in multiple currencies. IFC’s policy is to minimize the level of currency risk by closely matching the currency of its assets (other than equity investments and quasi-equity investments) and liabilities by using hedging instruments. IFC’s equity investments in enterprises located in its developing member countries are typically made in the local currency of the country. As a matter of policy, IFC carries the currency risk of equity investments and funds these investments from its capital and retained earnings. The following table summarizes IFC’s exposure in major currencies at June 30, 2013 and June 30, 2012 (US$ millions): June 30, 2013

US dollar Euro Japanese

yen Other

currencies

Fair value and other

adjustments Total Assets

Cash and cash equivalents $ 2,965 $ 1,461 $ 4 $ 2,075 $ - $ 6,505Trading securities 17,630 2,256 330 10,133 - 30,349Securities purchased under resale

agreements 337 - - - - 337 Investments:

Loans 16,594 2,935 20 2,910 - 22,459Less: Reserve against losses on loans (1,200) (218) - (210) - (1,628)

Net loans 15,394 2,717 20 2,700 - 20,831Equity investments - - - 11,695 - 11,695Debt securities 1,528 100 - 523 - 2,151

Total investments 16,922 2,817 20 14,918 - 34,677

Derivative assets 6,833 537 2,683 15,623 (22,300) 3,376Receivables and other assets 1,238 577 41 425 - 2,281

Total assets $ 45,925 $ 7,648 $ 3,078 $ 43,174 $ (22,300) $ 77,525

Liabilities

Securities sold under repurchase agreements $ 5,715 $ 21 $ - $ - $ - $ 5,736

Borrowings 26,406 278 2,685 15,500 - 44,869Derivative liabilities 9,009 6,438 26 9,874 (23,037) 2,310Payables and other liabilities 1,346 584 40 365 - 2,335

Total liabilities $ 42,476 $ 7,321 $ 2,751 $ 25,739 $ (23,037) $ 55,250

_ 85



June 30, 2012

US dollar Euro Japanese

yen Other

currencies

Fair value and other

adjustments Total Assets

Cash and cash equivalents $ 2,397 $ 1,480 $ 208 $ 2,962 $ - $ 7,047Trading securities 18,763 997 1,359 7,749 - 28,868Securities purchased under resale

agreements 931 - - 33 - 964 Investments

Loans 15,496 2,807 30 2,544 - 20,877Less: Reserve against losses on loans (1,120) (164) (1) (96) - (1,381)

Net loans 14,376 2,643 29 2,448 - 19,496Equity investments - - - 9,774 - 9,774Debt securities 1,287 69 - 812 - 2,168

Total investments 15,663 2,712 29 13,034 - 31,438

Derivative assets 6,454 393 3,832 16,034 (22,098) 4,615Receivables and other assets 1,986 80 36 727 - 2,829

Total assets $ 46,194 $ 5,662 $ 5,464 $ 40,539 $ (22,098) $ 75,761

Liabilities

Securities sold under repurchase agreements $ 6,397 $ - $ - $ - $ - $ 6,397

Borrowings 24,672 267 3,833 15,893 - 44,665Derivative liabilities 6,811 4,871 1,383 10,492 (22,296) 1,261Payables and other liabilities 2,099 89 36 634 - 2,858

Total liabilities $ 39,979 $ 5,227 $ 5,252 $ 27,019 $ (22,296) $ 55,181

NOTE T – SEGMENT REPORTING For management purposes, IFC’s business comprises three segments: investment services, treasury services and advisory services. The investment services segment consists primarily of lending and investing in debt and equity securities. The investment services segment also includes AMC, which is not separately disclosed due to its immaterial impact. Further information about the impact of AMC on IFC’s consolidated balance sheets and income statements can be found in Note B. Operationally, the treasury services segment consists of the borrowing, liquid asset management, asset and liability management and client risk management activities. Advisory services provide consultation services to governments and the private sector. Consistent with internal reporting, net income or expense from asset and liability management and client risk management activities in support of investment services is allocated from the treasury segment to the investment services segment. The performance of investment services, treasury services and advisory services is assessed by senior management on the basis of net income for each segment, return on assets, and return on capital employed. Advisory services are primarily assessed based on the level and adequacy of its funding sources (See Note V). IFC’s management reporting system and policies are used to determine revenues and expenses attributable to each segment. Consistent with internal reporting, administrative expenses are allocated to each segment based largely upon personnel costs and segment headcounts. Transactions between segments are immaterial and, thus, are not a factor in reconciling to the consolidated data.

86 _



An analysis of IFC’s major components of income and expense by business segment for the years ended June 30, 2013, June 30, 2012 and June 30, 2011, is provided below (US$ millions): June 30, 2013

Investment

services Treasury services

Advisory services Total

Income from loans and guarantees $ 1,059 $ - $ - $ 1,059 Provision for losses on loans, guarantees and other receivables (243) - - (243)Income from equity investments 752 - - 752Income from debt securities 5 - - 5 Income from liquid asset trading activities - 500 - 500 Charges on borrowings (109) (111) - (220)Advisory services income - - 239 239 Other income 202 - - 202 Administrative expenses (781) (22) (42) (845)Advisory services expenses - - (351) (351)Expense from pension and other postretirement benefit plans (120) (6) (47) (173)Other expenses (32) - - (32)Foreign currency transaction gains and losses on non-trading

activities 35 - - 35 Income (loss) before net gains and losses on other non-trading

financial instruments accounted for at fair value and grants to IDA 768 361 (201) 928

Net gains and losses on other non-trading financial instruments accounted for at fair value

Realized gains 35 - - 35 Gains on non-monetary exchanges 2 - - 2 Unrealized gains 353 32 - 385

Income (loss) before grants to IDA 1,158 393 (201) 1,350 Grants to IDA (340) - - (340)Net income (loss) 818 393 (201) 1,010Less: Net loss attributable to noncontrolling interests 8 - - 8 Net income (loss) attributable to IFC $ 826 $ 393 $ (201) $ 1,018

June 30, 2012

Investment



Income from loans and guarantees $ 938 $ - $ - $ 938Provision for losses on loans, guarantees and other receivables (117) - - (117)Income from equity investments 1,457 - - 1,457Income from debt securities 81 - - 81Income from liquid asset trading activities - 313 - 313Charges on borrowings (92) (89) - (181)Advisory services income - - 269 269Other income 179 - - 179Administrative expenses (728) (23) (47) (798)Advisory services expenses - - (290) (290)Expense from pension and other postretirement benefit plans (68) (3) (25) (96)Other expenses (23) - - (23)Foreign currency transaction gains and losses on non-trading

activities 145 - - 145Income (loss) before net gains and losses on other non-trading

financial instruments accounted for at fair value and grants to IDA 1,772 198 (93) 1,877


Realized gains 11 - - 11Gains on non-monetary exchanges 10 - - 10Unrealized losses (34) (206) - (240)

Income (loss) before grants to IDA 1,759 (8) (93) 1,658Grants to IDA (330) - - (330)

Net income (loss) $ 1,429 $ (8) $ (93) $ 1,328

_ 87



June 30, 2011

Investment



Income from loans and guarantees $ 869 $ 8 $ - $ 877Release of provisions for losses on loans, guarantees and other

receivables 40 - - 40Income from equity investments 1,464 - - 1,464Income from debt securities 46 - - 46Income from liquid asset trading activities - 529 - 529Charges on borrowings (109) (31) - (140)Other income 222 - - 222Administrative expenses (665) (9) (26) (700)Advisory services expenses - - (153) (153)Expense from pension and other postretirement benefit plans (80) (4) (25) (109)Other expenses (19) - - (19)Foreign currency transaction gains and losses on non-trading

activities (33) - - (33)Income (loss) before net gains and losses on other non-trading

financial instruments accounted for at fair value and grants to IDA 1,735 493 (204) 2,024


Realized gains 63 - - 63Gains on non-monetary exchanges 22 - - 22Unrealized gains (losses) (23) 93 - 70

Income (loss) before grants to IDA 1,797 586 (204) 2,179Grants to IDA (600) - - (600)

Net income (loss) $ 1,197 $ 586 $ (204) $ 1,579

Geographical segment data in respect of investment services is disclosed in Note D, and the composition of Liquid Assets is provided in Note C.

NOTE U – VARIABLE INTEREST ENTITIES Significant variable interests IFC has identified 139 investments in VIEs which are not consolidated by IFC but in which it is deemed to hold significant variable interests at June 30, 2013 (106 investments - June 30, 2012). The majority of these VIEs do not involve securitizations or other types of structured financing. IFC is usually the minority investor in these VIEs. These VIEs are mainly: (a) investment funds, where the general partner or fund manager does not have substantive equity at risk, which IFC does not consolidate because it does not absorb the majority of funds’ expected losses or expected residual returns and (b) entities whose total equity investment is considered insufficient to permit such entity to finance its activities without additional subordinated financial support or whose activities are so narrowly defined by contracts that equity investors are considered to lack decision making ability, which IFC does not consolidate because it does not have the power to control the activities that most significantly impact their economic performance. IFC’s involvement with these VIEs includes investments in equity interests and senior or subordinated interests, guarantees and risk management arrangements. IFC’s interests in these VIEs are recorded on IFC’s consolidated balance sheet primarily in equity investments, loans, debt securities, and other liabilities, as appropriate. Based on the most recent available data of these VIEs, the balance sheet size, including committed funding, in which IFC is deemed to hold significant variable interests, totaled $22,810 million at June 30, 2013 ($18,143 million - June 30, 2012). IFC’s maximum exposure to loss as a result of its investments in these VIEs, comprising both carrying value of investments and amounts committed but not yet disbursed, was $4,712 million at June 30, 2013 ($3,213 million - June 30, 2012).

88 _



The industry sector and geographical regional analysis of IFC’s maximum exposures as a result of its investment in these VIEs at June 30, 2013 and June 30, 2012 is as follows (US$ millions): June 30, 2013

Loans Equity

investments Debt

securities Guarantees Risk

management Total Manufacturing, agribusiness and services

Asia $ 91 $ 7 $ 19 $ - $ - $ 117Europe, Middle East and North Africa 459 18 1 - - 478Sub-Saharan Africa, Latin America and

Caribbean 266 42 - - - 308

Total manufacturing, agribusiness and services 816 67 20 - - 903

Financial markets

Asia 158 69 - 51 10 288Europe, Middle East and North Africa 55 263 201 2 - 521Sub-Saharan Africa, Latin America and Caribbean 48 208 41 121 - 418Other 78 1 159 - 15 253

Total financial markets 339 541 401 174 25 1,480


Asia 594 42 8 - - 644Europe, Middle East and North Africa 429 39 4 - 48 520Sub-Saharan Africa, Latin America and Caribbean 1,081 28 14 7 35 1,165

Total infrastructure and natural resources 2,104 109 26 7 83 2,329 Maximum exposure to VIEs $ 3,259 $ 717 $ 447 $ 181 $ 108 $ 4,712

June 30, 2012

Loans Equity

investments Debt

securities Guarantees Risk

management Total Manufacturing, agribusiness and services

Asia $ 93 $ - $ 4 $ - $ - $ 97Europe, Middle East and North Africa 284 30 3 - - 317Sub-Saharan Africa, Latin America and Caribbean 140 31 - - - 171

Total manufacturing, agribusiness and services 517 61 7 - - 585

Financial markets

Asia 20 57 - - - 77Europe, Middle East and North Africa 56 42 85 - - 183Sub-Saharan Africa, Latin America and Caribbean 62 114 55 1 - 232Other 72 - 122 - 13 207

Total financial markets 210 213 262 1 13 699


Asia 721 33 33 - - 787Europe, Middle East and North Africa 406 31 2 - 72 511Sub-Saharan Africa, Latin America and Caribbean 556 27 25 8 15 631

Total infrastructure and natural resources 1,683 91 60 8 87 1,929 Maximum exposure to VIEs $ 2,410 $ 365 $ 329 $ 9 $ 100 $ 3,213

_ 89



The carrying value of investments and maximum exposure to VIEs at June 30, 2013 and June 30, 2012 is as follows (US$ millions): June 30, 2013

Investment category Carrying value of investments

Committed but not yet disbursed

Maximum exposure

Loans $ 2,207 $ 1,052 $ 3,259Equity investments 504 213 717Debt securities 447 - 447Guarantees 181 - 181Risk management 69 39 108 Maximum exposure to VIEs $ 3,408 $ 1,304 $ 4,712

June 30, 2012

Investment category Carrying value of investments

Committed but not yet disbursed

Maximum exposure

Loans $ 1,749 $ 661 $ 2,410Equity investments 212 153 365Debt securities 329 - 329Guarantees 9 - 9Risk management 79 21 100 Maximum exposure to VIEs $ 2,378 $ 835 $ 3,213

NOTE V – ADVISORY SERVICES

IFC provides advisory services to government and private sector clients through four business lines: access to finance; investment climate; public-private partnerships; and sustainable business. IFC funds this business line by a combination of cash received from government and other donors and IFC’s operations via retained earnings and operating budget designations as well as fees received from the recipients of the services. IFC administers donor funds through trust funds. The donor funds may be used to support feasibility studies, project preparation, and other advisory services initiatives. Donor funds are restricted for purposes specified in agreements with the donors. IFC’s funding for advisory services are made in accordance with terms approved by IFC’s Board. Donor funds under administration and IFC’s funding can be comingled in accordance with administration agreements with donors. The comingled funds are held in a separate liquid asset investment portfolio managed by IBRD, which is not commingled with IFC’s other liquid assets and is reported at fair value in other assets. Donor funds are refundable until expended for their designated purpose. As of June 30, 2013, other assets include undisbursed donor funds of $391 million ($406 million - June 30, 2012) and IFC’s advisory services funding of $170 million ($196 million - June 30, 2012). Included in other liabilities as of June 30, 2013 is $391 million ($406 million - June 30, 2012) of refundable undisbursed donor funds.

90 _



NOTE W – PENSION AND OTHER POSTRETIREMENT BENEFITS

IBRD, IFC and MIGA participate in a defined benefit Staff Retirement Plan (SRP), a Retired Staff Benefits Plan (RSBP) and a Post-Employment Benefits Plan (PEBP) that cover substantially all of their staff members. The SRP provides pension benefits and includes a cash balance plan. The RSBP provides certain health and life insurance benefits to eligible retirees. The PEBP provides certain pension benefits administered outside the SRP. IFC uses a June 30 measurement date for its pension and other postretirement benefit plans. The amounts presented below reflect IFC’s respective share of the costs, assets and liabilities of the plans. All costs, assets and liabilities associated with these plans are allocated between IBRD, IFC and MIGA based upon their employees’ respective participation in the plans. Costs allocated to IBRD are then shared between IBRD and IDA based on an agreed cost-sharing ratio. IDA, IFC and MIGA reimburse IBRD for their proportionate share of any contributions made to these plans by IBRD. Contributions to these plans are calculated as a percentage of salary. The following table summarizes the benefit costs associated with the SRP, RSBP, and PEBP allocated to IFC for the years ended June 30, 2013, June 30, 2012 and June 30 2011 (US$ millions): SRP RSBP PEBP 2013 2012 2011 2013 2012 2011 2013 2012 2011 Benefit cost Service cost $ 116 $ 87 $ 78 $ 25 $ 17 $ 16 $ 11 $ 9 $ 8Interest cost 101 112 109 17 17 16 7 6 5Expected return on plan

assets (141) (150) (137) (18) (18) (16) - - -Amortization of prior service

cost 1 2 1 2 - * * * *Amortization of unrecognized

net loss 36 6 20 9 4 6 7 4 3 Net periodic pension cost

(income) $ 113 $ 57 $ 71 $ 35 $ 20 $ 22 $ 25 $ 19 $ 16* Less than $0.5 million The expenses for the SRP, RSBP, and PEBP are included in expense from pension and other postretirement benefit plans. For the years ended June 30, 2013, June 30, 2012 and June 30, 2011, expenses for these plans of $173 million, $96 million and $109 million, respectively, were allocated to IFC. The following table summarizes the projected benefit obligations, fair value of plan assets, and funded status associated with the SRP, RSBP, and PEBP for IFC for the years ended June 30, 2013 and June 30, 2012 (US$ millions). Since the assets for the PEBP are not held in an irrevocable trust separate from the assets of IBRD, they do not qualify for off-balance sheet accounting and are therefore included in IBRD's investment portfolio. IFC has recognized a receivable (prepaid asset) from IBRD and a payable (liability) to IBRD equal to the amount required to support the plan. The assets of the PEBP are invested in fixed income and equity instruments. SRP RSBP PEBP 2013 2012 2013 2012 2013 2012 Projected benefit obligations

Beginning of year $ 2,647 $ 2,166 $ 416 $ 305 $ 175 $ 127Service cost 116 87 25 17 11 9Interest cost 101 112 17 17 7 7Participant contributions 30 27 2 2 1 *Federal subsidy received - - * - - -Plan amendments - - 2 25 - -Benefits paid (106) (100) (7) (6) (5) (6)Actuarial loss (gain) (85) 355 (22) 56 6 38

End of year 2,703 2,647 433 416 195 175Fair value of plan assets

Beginning of year 2,431 2,347 294 266 - -Participant contributions 30 27 2 2 - -Actual return on assets 183 94 23 6 - -Employer contributions 75 63 28 26 - -Benefits paid (106) (100) (7) (6) - -

End of year 2,613 2,431 340 294 - -

Funded status* (90) (216) (93) (122) (195) (175) Accumulated benefit obligations $ 1,918 $ 1,812 $ 433 $ 416 $ 163 $ 148* Positive funded status is reflected in Receivables and other assets under prepaid pension and other postretirement benefit cost, in Note J; negative funded status is included in Payables and other liabilities under liabilities under retirement benefits plans, in Note L

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During the fiscal year ended June 30, 2012, amendments were made to the RSBP. These included: (i) Providing reimbursements for standard and income related premiums paid by eligible Medicare B participants effective on July 1, 2012, (ii) moving from the current Retiree Drug Subsidy (RDS) arrangement to an Employer Group Waiver Plan (EGWP) effective January 1, 2013, (iii) providing reimbursements of Medicare Part D income-related premium amounts once the plan moved to the EGWP arrangement and (iv) eliminating the Medicare savings feature. The combined effect of these changes was a $25 million increase to the projected benefit obligation at June 30, 2012. During the fiscal year ended June 30, 2013, IFC decided not to transition the RSBP plan from RDS to EGWP following further evaluations of the design and administrative requirements of the EGWP. The effect of this change was a $2 million increase to the projected benefit obligation at June 30, 2013.

The following tables present the amounts included in Accumulated other comprehensive income relating to Pension and Other Postretirement Benefits (US$ millions): Amounts included in Accumulated other comprehensive income in the year ended June 30, 2013: SRP RSBP PEBP Total Net actuarial loss $ 485 $ 115 $ 108 $ 708Prior service cost 3 25 - 28 Net amount recognized in accumulated other comprehensive loss $ 488 $ 140 $ 108 $ 736 Amounts included in Accumulated other comprehensive income in the year ended June 30, 2012: SRP RSBP PEBP Total Net actuarial loss $ 648 $ 151 $ 108 $ 907Prior service cost 4 25 1 30 Net amount recognized in accumulated other comprehensive loss $ 652 $ 176 $ 109 $ 937 The estimated amounts that will be amortized from Accumulated other comprehensive income (loss) into net periodic benefit cost in the fiscal year ending June 30, 2014 are as follows (US$ millions): SRP RSBP PEBP Total Net actuarial loss $ 20 $ 5 $ 7 $ 32Prior service cost 1 3 * 4 Net amount recognized in accumulated other comprehensive loss $ 21 $ 8 $ 7 $ 36* Less than $0.5 million Assumptions

The actuarial assumptions used are based on financial market interest rates, inflation expectations, past experience, and management’s best estimate of future benefit changes and economic conditions. Changes in these assumptions will impact future benefit costs and obligations. The expected long-term rate of return for the SRP assets is a weighted average of the expected long-term (10 years or more) returns for the various asset classes, weighted by the portfolio allocation. Asset class returns are developed using a forward-looking building block approach and are not strictly based on historical returns. Equity returns are generally developed as the sum of expected inflation, expected real earnings growth and expected long-term dividend yield. Bond returns are generally developed as the sum of expected inflation, real bond yield, and risk premium/spread (as appropriate). Other asset class returns are derived from their relationship to equity and bond markets. The expected long-term rate of return for the RSBP is computed using procedures similar to those used for the SRP. The discount rate used in determining the benefit obligation is selected by reference to the year-end yield of AA corporate bonds. Actuarial gains and losses occur when actual results are different from expected results. Amortization of these unrecognized gains and losses will be included in income if, at the beginning of the fiscal year, they exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If required, the unrecognized gains and losses are amortized over the expected average remaining service lives of the employee group.

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The following tables present the weighted-average assumptions used in determining the projected benefit obligations and the net periodic pension costs for the years ended June 30, 2013, June 30, 2012 and June 30, 2011: Weighted average assumptions used to determine projected benefit obligation (%) SRP RSBP PEBP 2013 2012 2011 2013 2012 2011 2013 2012 2011 Discount rate 4.60 3.90 5.30 4.80 4.10 5.50 4.50 3.90 5.20Rate of compensation increase 5.70 5.40 5.90 5.70 5.40 5.90Health care growth rates

- at end of fiscal year 5.90 6.30 6.90 Ultimate health care growth

rate 3.90 3.60 4.00 Year in which ultimate rate

is reached 2022 2022 2022 Weighted average assumptions used to determine net periodic pension cost (%) SRP RSBP PEBP 2013 2012 2011 2013 2012 2011 2013 2012 2011 Discount rate 3.90 5.30 5.75 4.10 5.50 6.00 3.90 5.20 5.75Expected return on plan assets 5.80 6.40 6.75 6.10 6.70 7.75 Rate of compensation increase 5.40 5.90 6.20 5.40 5.90 6.20Health care growth rates

- at end of fiscal year 6.30 6.90 7.00 Ultimate health care growth

rate 3.60 4.00 4.25 Year in which ultimate rate

is reached 2022 2022 2022 The medical cost trend rate can significantly affect the reported postretirement benefit income or costs and benefit obligations for the RSBP. The following table shows the effects of a one-percentage-point change in the assumed healthcare cost trend rate (US$ millions): One-percentage-point increase One-percentage-point decreaseEffect on total service and interest cost $ 12 $ (9) Effect on projected benefit obligation $ 109 $ (82)

Investment Strategy

The investment policies establish the framework for investment of the plan assets based on long-term investment objectives and the trade-offs inherent in seeking adequate investment returns within acceptable risk parameters. A key component of the investment policy is to establish a Strategic Asset Allocation (SAA) representing the policy portfolio (i.e., target mix of assets) around which the plans are invested. The SAA for the plans is reviewed in detail and reset about every three years, with more frequent reviews and changes if and as needed based on market conditions.

The key long-term objective is to target and secure asset performance that is reasonable in relation to the growth rate of the underlying liabilities and the assumed sponsor contribution rates. This is particularly so in the case of the SRP, which has liabilities that can be projected based on the actuarial assumptions. Given the relatively long investment horizons of the SRP and RSBP, and the relatively modest liquidity needs over the short-term to pay benefits and meet other cash requirements, the focus of the investment strategy is on generating sustainable long-term investment returns through various asset classes and strategies including public and private equity and real estate.

The SAA is derived using a mix of quantitative analysis that incorporates expected returns and volatilities by asset class as well as correlations across the asset classes, and qualitative considerations such as the desired liquidity needs of the plans. The SAA is comprised of a diversified portfolio drawn from among fixed-income, equity, real assets and absolute return strategies.

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The following table presents the actual and target asset allocation at June 30, 2013 and June 30, 2012 by asset category for the SRP and RSBP. The target allocations for SRP and RSBP were last revised in May 2013. SRP RSBP Target

Allocation 2013 (%)

% of Plan Assets Target Allocation 2013 (%)

% of Plan Assets

2013 2012 2013 2012 Asset class Public equity 27 30 24 29 30 27Fixed income & cash 26 28 33 24 29 32Private equity 20 18 20 20 21 24Hedge funds 10 12 11 10 9 8Real assets* 12 12 12 12 11 9Opportunistic** 5 - - 5 - - Total 100 100 100 100 100 100

* Real assets include public and private real estate, infrastructure and timber. ** Opportunistic strategies are designed to take advantage of temporary market opportunities that are not captured in other parts of portfolio.

Significant concentrations of risk in Plan assets The assets of the SRP and RSBP are diversified across a variety of asset classes. Investments in these asset classes are further diversified across funds, managers, strategies, geographies and sectors, to limit the impact of any individual investment. In spite of such level of diversification, equity market risk remains the primary source of the overall return volatility of the Plans. Risk management practices

Managing investment risk is an integral part of managing the assets of the Plans. Liability driven investment management and asset diversification are central to the overall investment strategy and risk management approach for the SRP. The surplus volatility risk (defined as the annualized standard deviation of asset returns relative to that of liabilities) and downside risk measures are considered key indicators of the Plan’s overall investment risk. These measures are used to define the risk tolerance level and establish the overall level of investment risk. Investment risk is regularly monitored at the absolute level, as well as at the relative levels with respect to the investment policy, manager benchmarks, and liabilities of the Plans. Stress tests are performed periodically using relevant market scenarios to assess the impact of extreme market events. Monitoring of performance (at both manager and asset class levels) against benchmarks, and compliance with investment guidelines, is carried out on a regular basis as part of the risk monitoring process. Risk management for different asset classes is tailored to their specific characteristics and is an integral part of the external managers’ due diligence and monitoring processes. Credit risk is monitored on a regular basis and assessed for possible credit event impacts. The liquidity position of the Plans is analyzed at regular intervals and periodically tested using various stress scenarios to ensure that the Plans have sufficient liquidity to meet all cash flow requirements. In addition, the long-term cash flow needs of the Plans are considered during the SAA exercise and are one of the main drivers in determining maximum allocation to the illiquid investment vehicles. The plans mitigate operational risk by maintaining a system of internal controls along with other checks and balances at various levels.

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Fair value measurements and disclosures

All plan assets are measured at fair value on recurring basis. The following table presents the fair value hierarchy of major categories of plans assets as of June 30, 2013 and June 30, 2012 (US$ millions):

June 30, 2013 Fair value measurements on a recurring basis SRP RSBP Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Debt securities Time deposits $ * $ 40 $ - $ 40 $ * $ 6 $ - $ 6Securities purchased

under resale agreements 55 - - 55 4 - - 4Government and agency securities 513 119 - 632 35 53 - 88Corporate and convertible bonds - 25 - 25 - 2 - 2Asset-backed securities - 14 - 14 - * - *Mortgage-backed securities - 32 - 32 - * - *

Total debt securities 568 230 - 798 39 61 - 100

Equity securities US common stocks 88 - - 88 7 - - 7Non-US common stocks 419 - - 419 52 - - 52Mutual funds 27 - - 27 7 - - 7

Real estate investment trusts 56 - - 56 6 - - 6Total equity securities 590 - - 590 72 - - 72

Commingled funds - 226 - 226 - 37 - 37Private equity - - 483 483 - - 71 71Hedge funds - 205 79 284 - 21 8 29Derivative assets/ liabilities * 2 - 2 (*) * - *Real estate (including infrastructure and timber) - 76 181 257 - 6 23 29

Other assets/ liabilities**, net - (*) - (27) - - - 2

Total Assets $ 1,158 $ 739 $ 743 $ 2,613 $ 111 $ 125 $ 102 $ 340

June 30, 2012 Fair value measurements on a recurring basis SRP RSBP Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Debt securities Time deposits $ - $ 9 $ - $ 9 $ - $ 4 $ - $ 4Securities purchased

under resale agreements 15 - - 15 3 - - 3Government and agency securities 595 104 - 699 38 49 - 87Corporate and convertible bonds - 27 * 27 - 3 - 3Asset-backed securities - 9 * 9 - 1 * 1Mortgage-backed securities - 49 * 49 - 1 * 1

Total debt securities 610 198 * 808 41 58 * 99

Equity securities US common stocks 73 - - 73 8 - - 8Non-US common stocks 240 - - 240 33 - - 33Mutual funds 107 - - 107 9 - - 9

Real estate investment trusts 57 - - 57 3 - - 3Total equity securities 477 - - 477 53 - - 53

Commingled funds - 140 - 140 - 28 - 28Private equity - - 491 491 - - 67 67Hedge funds - 173 68 241 - 16 7 23Derivative assets/ liabilities (*) (1) - (1) 1 (*) - 1Real estate (including Infrastructure and timber) - 65 174 239 * 2 21 23Other assets/ liabilities**, net - * - 36 - - - - Total Assets $ 1,087 $ 575 $ 733 $ 2,431 $ 95 $ 104 $ 95 $ 294*Less than $0.5 million ** Includes receivables and payables carried at amounts that approximate fair value

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The following tables present a reconciliation of Level 3 assets held during the year ended June 30, 2013 and June 30, 2012 (US$ millions). For the fiscal year ended June 30, 2012, investments in certain real estate funds that were identified as redeemable within 90 days of the period end were transferred out of Level 3 into Level 2.

June 30, 2013 SRP: Fair value measurements using significant unobservable inputs

Corporate and

convertible debt

Asset-backed

securities

Mortgage-backed

securities Private equity

Real estate

Hedge funds Total

Beginning of the fiscal year $ * $ * $ * $ 491 $ 174 $ 68 $ 733Actual return on plan assets:

Relating to assets still held at the reporting date * - * 92 2 6 100

Relating to assets sold during the period - - (*) (22) 15 * (7)

Purchase, issuances and settlements, net (*) (*) (*) (78) (10) 6 (82)

Transfer in - - - - - 11 11Transfer out (*) - - - - (12) (12)Balance at end of

$ - $ - $ - $ 483 $ 181 $ 79 $ 743fiscal year

* Less than $0.5 million

June 30, 2013 RSBP: Fair value measurements using significant unobservable inputs

Corporate and

convertible debt

Asset-backed

securities

Mortgage-backed


Real estate

Hedge funds Total

Beginning of the fiscal year $ - $ * $ * $ 67 $ 21 $ 7 $ 95Actual return on plan assets:

Relating to assets still held at the reporting date - - - 14 * 1 15

Relating to assets sold during the period - - - (3) 2 * (1)

Purchase, issuances and settlements, net - (*) (*) (7) (*) 1 (6)

Transfer in - - - - - 1 1Transfer out - - - - - (2) (2)Balance at end of

$ - $ - $ - $ 71 $ 23 $ 8 $ 102fiscal year

* Less than $0.5 million

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June 30, 2012 SRP: Fair value measurements using significant unobservable inputs

Corporate and

convertible debt

Asset-backed

securities

Mortgage-backed


Real estate

Hedge funds Total

Beginning of the fiscal year $ - $ 5 $ 3 $ 475 $ 139 $ 61 $ 683Actual return on plan assets: Relating to assets still held

at the reporting date * (*) 1 (42) 4 (1) (38)Relating to assets sold

during the period * * (1) 40 6 (1) 44Purchase, issuances and

settlements, net (*) (5) (2) 18 25 11 47Transfer in - - * - - 4 4Transfer out - (*) (1) - - (6) (7)Balance at end of

$ * $ * $ * $ 491 $ 174 $ 68 $ 733fiscal year * Less than $0.5 million

June 30, 2012 RSBP: Fair value measurements using significant unobservable inputs

Corporate and

convertible debt

Asset-backed

securities

Mortgage-backed


Real estate

Hedge funds Total

Beginning of the fiscal year $ - $ * $ * $ 66 $ 17 $ 6 $ 89Actual return on plan assets: Relating to assets still held

at the reporting date - (*) * (5) 3 (*) (2)Relating to assets sold

during the period - (*) * 6 2 (*) 8Purchase, issuances and

settlements, net - (*) (*) * (1) 2 1Transfer in - - - - - * *Transfer out - (*) (*) - - (1) (1)Balance at end of

$ - $ * $ * $ 67 $ 21 $ 7 $ 95fiscal year * Less than $0.5 million Valuation methods and assumptions The following are general descriptions of asset categories, as well as the valuation methodologies and inputs used to determine the fair value of each major category of Plan assets. It is important to note that the investment amounts in the asset categories shown in the table above may be different from the asset category allocation shown in the Investment Strategy section of the note. Asset classes in the table above are grouped by the characteristics of the investments held. The asset class break-down in the Investment Strategy section is based on management’s view of the economic exposures after considering the impact of derivatives and certain trading strategies. Debt securities Debt securities include time deposits, U.S. treasuries and agencies, debt obligations of foreign governments and debt obligations in corporations of domestic and foreign issuers. Fixed income also includes investments in asset backed securities such as collateralized mortgage obligations and mortgage backed securities. These securities are valued by independent pricing vendors at quoted market prices for the same or similar securities, where available. If quoted market prices are not available, fair values are based on discounted cash flow models using market-based parameters such as yield curves, interest rates, volatilities, foreign exchange rates and credit curves. Some debt securities are valued using techniques which require significant unobservable inputs. The selection of these inputs may involve some judgment. Management believes its estimates of fair value are reasonable given its processes for obtaining securities prices from multiple independent third-party vendors, ensuring that valuation models are reviewed and validated, and applying its approach consistently from period to period. Unless quoted prices are available, money market instruments and securities purchased under resale agreements are reported at face value which approximates fair value.

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Equity securities Equity securities, including Real estate investment trusts (REITS), are invested in companies in various industries and countries. Investments in public equity listed on securities exchanges are valued at the last reported sale price on the last business day of the fiscal year. Commingled funds Commingled funds are typically common or collective trusts reported at net asset value (NAV) as provided by the investment manager or sponsor of the fund based on valuation of underlying investments, and reviewed by management. Private equity Private equity includes investments primarily in leveraged buyouts, distressed investments and venture capital funds across North America, Europe and Asia in a variety of sectors. A large number of these funds are in the investment phase of their life cycle. Private Equity investments do not have a readily determinable fair market value and are reported at NAV provided by the fund managers, and reviewed by management, taking into consideration the latest audited financial statements of the funds. The underlying investments are valued using inputs such as cost, operating results, discounted future cash flows and trading multiples of comparable public securities. Real estate Real estate includes several funds which invest in core real estate as well as non-core type of real estate investments such as debt, value add, and opportunistic equity investments. Real estate investments do not have a readily determinable fair market value and are reported at NAV provided by the fund managers, and reviewed by management, taking into consideration the latest audited financial statements of the funds. The valuations of underlying investments are based on income and/or cost approaches or comparable sales approach, and taking into account discount and capitalization rates, financial conditions, local market conditions among others. Hedge fund investments Hedge fund investments include those seeking to maximize absolute returns using a broad range of strategies to enhance returns and provide additional diversification. Hedge Funds include investments in equity, event driven, fixed income, multi strategy and macro relative value strategies. These investments do not have a readily determinable fair market value and are reported at NAVs provided by external managers or fund administrators (based on the valuations of underlying investments) on a monthly basis, and reviewed by management, taking into consideration the latest audited financial statements of the funds. Investments in hedge funds and commingled funds can typically be redeemed at NAV within the near term while investments in private equity and most real estate are inherently long term and illiquid in nature with a quarter lag in reporting by the fund managers. Reporting of those asset classes with a reporting lag, management estimates are based on the latest available information taking into account underlying market fundamentals and significant events through the balance sheet date. Investment in derivatives Investment in derivatives such as equity or bond futures, TBA securities, swaps, options and currency forwards are used to achieve a variety of objectives that include hedging interest rates and currency risks, gaining desired market exposure of a security, an index or currency exposure and rebalancing the portfolio. Over-the-counter derivatives are reported using valuations based on discounted cash flow methods incorporating market observable inputs. Estimated future benefits payments The following table shows the benefit payments expected to be paid in each of the next five years and subsequent five years. The expected benefit payments are based on the same assumptions used to measure the benefit obligation at June 30, 2013 (US$ millions):

SRP RSBP PEBP Before Federal Federal

subsidy subsidy July 1, 2013 - June 30, 2014 $ 109 $ 7 $ * $ 9July 1, 2014 - June 30, 2015 117 8 * 10July 1, 2015 - June 30, 2016 126 9 * 11July 1, 2016 - June 30, 2017 135 10 * 12July 1, 2017 - June 30, 2018 145 11 * 13July 1, 2018 - June 30, 2023 872 77 2 81 * Less than $0.5 million

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Expected contributions

IFC’s contribution to the SRP and RSBP varies from year to year, as determined by the Pension Finance Committee, which bases its judgment on the results of annual actuarial valuations of the assets and liabilities of the SRP and RSBP. The best estimate of the amount of contributions expected to be paid to the SRP and RSBP for IFC during the year beginning July 1, 2013 is $88 million and $33 million, respectively. NOTE X – SERVICE AND SUPPORT PAYMENTS IFC obtains certain administrative and overhead services from IBRD in those areas where common services can be efficiently provided by IBRD. This includes shared costs of the Boards of Governors and Directors, and other services such as communications, internal auditing, administrative support, supplies, and insurance. IFC makes payments for these services to IBRD based on negotiated fees, chargebacks and allocated charges, where chargeback is not feasible. Expenses allocated to IFC for the year ended June 30, 2013, were $60 million ($57 million - year ended June 30, 2012; $50 million - year ended June 30, 2011). Other chargebacks include $30 million for the year ended June 30, 2013 ($26 million - year ended June 30, 2012; $26 million - year ended June 30, 2011). NOTE Y – CONTINGENCIES In the normal course of its business, IFC is from time to time named as a defendant or co-defendant in various legal actions on different grounds in various jurisdictions. Although there can be no assurances, based on the information currently available, IFC’s Management does not believe the outcome of any of the various existing legal actions will have a material adverse effect on IFC’s financial position, results of operations or cash flows.

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Project CommitmentsFiscal Year 2013

This table includes projects signed and processed during FY13. All amounts are given in U.S. dollars, regardless of the currency of the transaction.

Under the Global Trade Finance Program, IFC provides guaran-tee coverage of bank risk in emerging markets, where confirming banks need risk mitigation to support their export clients because of limited capacity for country and bank exposure.

note on categoriZation oF projects:

Projects are assigned a category of A, B, or C, according to their potential environmental and social impacts — or FI, in the case of investments through financial intermediaries that on- lend to cli-ents whose projects may present environmental and social risks.A: Business activities with potential significant adverse envi-

ronmental or social risks and/or impacts that are diverse, irreversible, or unprecedented.

B: Business activities with potential limited adverse environ-mental or social risks and/or impacts that are few in number, generally site- specific, largely reversible, and readily addressed through mitigation measures.

C: Business activities with minimal or no adverse environmental or social risks and/or impacts.

FI: Business activities involving investments in FIs or through delivery mechanisms involving financial intermediation. This category is further divided into:FI–1: when an FI’s existing or proposed portfolio includes, or

is expected to include, substantial financial exposure to business activities with potential significant adverse environmental or social risks or impacts that are diverse, irreversible, or unprecedented.

FI–2: when an FI’s existing or proposed portfolio consists of, or is expected to consist of, business activities that have potential limited adverse environmental or social risks or impacts that are few in number, generally site- specific, largely reversible, and readily addressed through miti-gation measures; or includes a very limited number of business activities with potential significant adverse environmental or social risks or impacts that are diverse, irreversible, or unprecedented.

FI–3: when an FI’s existing or proposed portfolio includes financial exposure to business activities that predom-inantly have minimal or no adverse environmental or social impacts.

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IFC Region Country Name Company Name

Environment & Social Category

Code

IFC Loan & Quasi-Loan

Commitments ($)

IFC Equity & Quasi-Equity

Commitments ($)Risk Management Commitments ($)

Trade Finance Guarantee

Commitments ($)

Non-Trade Finance Guarantee Commitments ($)

Total Commitments for

IFC’s Own Account ($)

Syndications Commitments

[B-loans only] ($)

EAST ASIA ANd ThE PACIFIC

Cambodia ACLEdA Bank Plc. FI-2 — 4,900,000 — 582,768 — 5,482,768 —

Prasac Microfinance Institution FI-3 10,000,000 — — — — 10,000,000 —

China Anyou Biotechnology Group Company Limited B 20,000,000 — — — — 20,000,000 —

Aqualyng Holding AS B 12,000,000 — — — — 12,000,000 —

Bank of Beijing FI — — — 229,245,765 — 229,245,765 —

Bank of deyang FI — — — 4,927,427 — 4,927,427 —

Bank of jiangsu FI-2 — — — — 74,071,105 74,071,105 —

Bank of Shanghai Ltd. Co. FI-2 — — — — 40,252,463 40,252,463 —

Bayan Rongxing Village and township Bank FI — 57,000 — — — 57,000 —

CFPA Microfinance Management Co. FI-3 — 3,586,516 — — — 3,586,516 —

CHUEE Facility — Bank of Beijing FI-2 — — — — 70,723,631 70,723,631 —

CHUEE Facility — Bank of Nanjing FI-2 — — — — 40,183,881 40,183,881 —

China Environmental Fund III, L.P. FI — 250,178 — — — 250,178 —

China Everbright International Limited B 70,000,000 — — — — 70,000,000 —

China Flooring Holding Company Limited A 40,000,000 — — — — 40,000,000 —

Concord Medical Services Holdings Limited B 50,000,000 — — — — 50,000,000 —

daguan jingyun Hydropower Industry Co., Ltd A 17,000,000 — — — — 17,000,000 —

EdC China Holding Ltd B — 9,999,950 — — — 9,999,950 —

ENN Energy Holdings Ltd. B 75,000,000 — — — — 75,000,000 75,000,000

Fullerton Credit Chongqing Ltd FI 14,853,936 — — — — 14,853,936 —

Fullerton Credit Hubei Ltd. FI-2 9,902,624 — — — — 9,902,624 —

Fullerton Credit Sichuan Ltd FI 24,756,560 — — — — 24,756,560 —

Guizhou dushan Lidu Industry development Co., Ltd A 6,000,000 — — — — 6,000,000 —

jiangxi tianren Ecology Co., Ltd B — 8,500,000 — — — 8,500,000 —

Muyuan Foodstuff Co., Ltd B 20,000,000 — — — — 20,000,000 —

New Hope Agriculture and Food Fund II, L.P. FI-1 — 20,000,000 — — — 20,000,000 —

Peak Reinsurance Holdings Limited FI-3 — 81,950,000 — — — 81,950,000 —

Qingdao jason Electric Co., Ltd B — 6,000,000 — — — 6,000,000 —

SNF (China) Flocculant Co., Limited B 30,000,000 — — — — 30,000,000 —

Shandong Changlin deutz-Fahr Machinery Co., Ltd. B 13,005,000 — — — — 13,005,000 —

Shanghai F-Road Commercial Services Co., Ltd FI-3 — 5,500,000 — — — 5,500,000 —

Shanghai Fosun Pharmaceutical Group Co. Ltd B — 25,000,000 — — — 25,000,000 —

Yingjiang Menglang Hydropower Co., Ltd A 27,000,000 — — — — 27,000,000 —

East Asia and Pacific Region AdM Asia Restructuring Facility FI — — 10,000,000 — — 10,000,000 —

Armstrong South East Asia Clean Energy Fund, L.P. FI-2 — 20,000,000 — — — 20,000,000 —

Aureos South-East Asia Fund II LP FI — 25,000,000 — — — 25,000,000 —

Lakeshore Capital Asia Ltd. FI-2 — 20,000,000 — — — 20,000,000 —

Salamander Energy plc. B 10,000,000 — — — — 10,000,000 —

Indonesia Pt Bina Usaha Keluarga FI-3 4,937,002 3,932,323 — — — 8,869,324 —

Pt HARUM ALAM SEGAR B 13,750,000 — — — — 13,750,000 13,750,000

Pt MItRA ALAM SEGAR B 4,750,000 — — — — 4,750,000 4,750,000

Pt Moya Indonesia B — 8,742,607 — — — 8,742,607 —

Pt Moya tangerang B 23,553,613 — — — — 23,553,613 —

Pt tirta Alam Segar B 11,750,000 — — — — 11,750,000 11,750,000

Pt Wintermar Offshore Marine tbk B 10,000,000 — — — — 10,000,000 —

Pt. Bank Hana Indonesia FI-2 30,000,000 — — — — 30,000,000 —

Sayap Mas Utama B 13,750,000 — — — — 13,750,000 13,750,000

Lao People’s democratic Republic Acleda Bank Lao Ltd FI-2 8,000,000 — — — — 8,000,000 —

Mongolia Khan Bank of Mongolia, Ulanbaatar, Mongolia FI-2 20,000,000 — — 4,273,151 — 24,273,151 —

MCS Properties Limited B 60,000,000 — — — — 60,000,000 —

Mongolia Opportunities Fund I, L.P. FI — 1,250,000 — — — 1,250,000 —

Suu jSC B — — 100,000 — — 100,000 —

XacBank Ltd. FI-2 — 7,347,227 — 2,030,694 — 9,377,921 —

Myanmar ACLEdA MFI Myanmar Co., Ltd. FI-3 2,000,000 — — — — 2,000,000 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)


Cambodia ACLEdA Bank Plc. FI-2 — 4,900,000 — 582,768 — 5,482,768 —

Prasac Microfinance Institution FI-3 10,000,000 — — — — 10,000,000 —

China Anyou Biotechnology Group Company Limited B 20,000,000 — — — — 20,000,000 —

Aqualyng Holding AS B 12,000,000 — — — — 12,000,000 —

Bank of Beijing FI — — — 229,245,765 — 229,245,765 —

Bank of deyang FI — — — 4,927,427 — 4,927,427 —

Bank of jiangsu FI-2 — — — — 74,071,105 74,071,105 —

Bank of Shanghai Ltd. Co. FI-2 — — — — 40,252,463 40,252,463 —

Bayan Rongxing Village and township Bank FI — 57,000 — — — 57,000 —

CFPA Microfinance Management Co. FI-3 — 3,586,516 — — — 3,586,516 —

CHUEE Facility — Bank of Beijing FI-2 — — — — 70,723,631 70,723,631 —

CHUEE Facility — Bank of Nanjing FI-2 — — — — 40,183,881 40,183,881 —

China Environmental Fund III, L.P. FI — 250,178 — — — 250,178 —

China Everbright International Limited B 70,000,000 — — — — 70,000,000 —

China Flooring Holding Company Limited A 40,000,000 — — — — 40,000,000 —

Concord Medical Services Holdings Limited B 50,000,000 — — — — 50,000,000 —

daguan jingyun Hydropower Industry Co., Ltd A 17,000,000 — — — — 17,000,000 —

EdC China Holding Ltd B — 9,999,950 — — — 9,999,950 —

ENN Energy Holdings Ltd. B 75,000,000 — — — — 75,000,000 75,000,000

Fullerton Credit Chongqing Ltd FI 14,853,936 — — — — 14,853,936 —

Fullerton Credit Hubei Ltd. FI-2 9,902,624 — — — — 9,902,624 —

Fullerton Credit Sichuan Ltd FI 24,756,560 — — — — 24,756,560 —

Guizhou dushan Lidu Industry development Co., Ltd A 6,000,000 — — — — 6,000,000 —

jiangxi tianren Ecology Co., Ltd B — 8,500,000 — — — 8,500,000 —

Muyuan Foodstuff Co., Ltd B 20,000,000 — — — — 20,000,000 —

New Hope Agriculture and Food Fund II, L.P. FI-1 — 20,000,000 — — — 20,000,000 —

Peak Reinsurance Holdings Limited FI-3 — 81,950,000 — — — 81,950,000 —

Qingdao jason Electric Co., Ltd B — 6,000,000 — — — 6,000,000 —

SNF (China) Flocculant Co., Limited B 30,000,000 — — — — 30,000,000 —

Shandong Changlin deutz-Fahr Machinery Co., Ltd. B 13,005,000 — — — — 13,005,000 —

Shanghai F-Road Commercial Services Co., Ltd FI-3 — 5,500,000 — — — 5,500,000 —

Shanghai Fosun Pharmaceutical Group Co. Ltd B — 25,000,000 — — — 25,000,000 —

Yingjiang Menglang Hydropower Co., Ltd A 27,000,000 — — — — 27,000,000 —

East Asia and Pacific Region AdM Asia Restructuring Facility FI — — 10,000,000 — — 10,000,000 —

Armstrong South East Asia Clean Energy Fund, L.P. FI-2 — 20,000,000 — — — 20,000,000 —

Aureos South-East Asia Fund II LP FI — 25,000,000 — — — 25,000,000 —

Lakeshore Capital Asia Ltd. FI-2 — 20,000,000 — — — 20,000,000 —

Salamander Energy plc. B 10,000,000 — — — — 10,000,000 —

Indonesia Pt Bina Usaha Keluarga FI-3 4,937,002 3,932,323 — — — 8,869,324 —

Pt HARUM ALAM SEGAR B 13,750,000 — — — — 13,750,000 13,750,000

Pt MItRA ALAM SEGAR B 4,750,000 — — — — 4,750,000 4,750,000

Pt Moya Indonesia B — 8,742,607 — — — 8,742,607 —

Pt Moya tangerang B 23,553,613 — — — — 23,553,613 —

Pt tirta Alam Segar B 11,750,000 — — — — 11,750,000 11,750,000

Pt Wintermar Offshore Marine tbk B 10,000,000 — — — — 10,000,000 —

Pt. Bank Hana Indonesia FI-2 30,000,000 — — — — 30,000,000 —

Sayap Mas Utama B 13,750,000 — — — — 13,750,000 13,750,000

Lao People’s democratic Republic Acleda Bank Lao Ltd FI-2 8,000,000 — — — — 8,000,000 —

Mongolia Khan Bank of Mongolia, Ulanbaatar, Mongolia FI-2 20,000,000 — — 4,273,151 — 24,273,151 —

MCS Properties Limited B 60,000,000 — — — — 60,000,000 —

Mongolia Opportunities Fund I, L.P. FI — 1,250,000 — — — 1,250,000 —

Suu jSC B — — 100,000 — — 100,000 —

XacBank Ltd. FI-2 — 7,347,227 — 2,030,694 — 9,377,921 —

Myanmar ACLEdA MFI Myanmar Co., Ltd. FI-3 2,000,000 — — — — 2,000,000 —

_ 105PROjECt COMMItMENtS Fiscal Year 2013



Code


Commitments ($)




Commitments ($)





[B-loans only] ($)


Papua New Guinea Avenell Engineering System Limited B 4,000,000 — — — — 4,000,000 —

Bank South Pacific FI-2 — — — 4,191,792 — 4,191,792 —

Bank of South Pacific Limited FI-1 — — — — 65,064,125 65,064,125 —

Philippines Navegar I L.P. FI-2 — 20,000,000 — — — 20,000,000 —

Philippine Asset Growth One, Inc. FI 34,479,274 — — — — 34,479,274 —

Philippine Asset Growth two, Inc. FI-3 24,312,992 — — — — 24,312,992 —

Philippine Resources Savings Banking Corporation FI-3 — 15,911,873 — — — 15,911,873 —

thailand Bank of Ayudhya Public Company Limited FI 200,000,000 — — — — 200,000,000 —

Chalybs Cylinders Ltd. B 26,155,000 — — — — 26,155,000 —

timor-Leste tuba Rai Metin FI-3 500,000 — — — — 500,000 —

Vietnam An Binh Commercial joint Stock Bank FI — — — 2,250,000 — 2,250,000 —

Asia Commercial Bank C — — — 5,025,600 — 5,025,600 —

dongA Commercial joint Stock Bank FI-3 — — — 38,318,059 — 38,318,059 —

Methis Environmental Vietnam Co., Ltd. C — 700,000 — — — 700,000 —

Orient Commercial joint Stock Bank FI-2 — — — 78,452,423 — 78,452,423 —

SN Power Holdings Singapore, Inc. C 400,000 — — — — 400,000 —

Saigon thuong tin Commercial joint Stock Bank FI — — — 38,281,212 — 38,281,212 —

Vietnam International Commercial joint Stock Bank FI-2 — — — 162,200,000 — 162,200,000 —

Vietnam joint Stock Commercial Bank for Industry and trade FI — — — 25,000,000 — 25,000,000 —

Vietnam technological and Commercial joint Stock Bank FI-2 — — — 454,077,704 — 454,077,704 —

Vina Eco Board Co., Ltd. B — — 300,000 — — 300,000 —

EuROPE ANd CENTRAL ASIA

Albania Banka Credins SHA FI-2 11,806,200 — 50,000 — — 11,856,200 —

Bankers Petroleum Ltd. B 50,000,000 — — — — 50,000,000 —

Armenia ACBA-Credit Agricole Bank Closed joint Stock Company FI-3 — — 1,000,000 — — 1,000,000 —

Ameriabank CjSC FI-3 — — 1,000,000 7,549,633 — 8,549,633 —

Armeconombank FI — — — 1,135,590 — 1,135,590 —

Byblos Bank Armenia C 5,000,000 — — — — 5,000,000 —

Euroterm Closed joint Stock Company B 2,500,000 — — — — 2,500,000 —

HSBC Bank Armenia cjsc FI 11,000,000 — — — — 11,000,000 —

Inecobank FI-3 — — — 2,000,000 — 2,000,000 —

Lydian International Ltd B — 1,949,162 — — — 1,949,162 —

Azerbaijan AccessBank FI-2 15,000,000 — — — — 15,000,000 —

AzeriGazbank FI — 1,114,366 — 3,176,417 — 4,290,783 —

dEMIRBANK OjSC FI — — — 10,568,704 — 10,568,704 —

Finca Azerbaijan LLC FI — — 350,000 — — 350,000 —

jSC Bank Respublika FI-2 14,000,000 — — 218,613 — 14,218,613 —

Belarus Belarusky Narodny Bank FI — — — 4,675,061 — 4,675,061 —

jSC BPS-BANK (Formerly Belpromstroibank) C — — — 23,958,415 — 23,958,415 —

jSC Belgazprombank C — — — 25,739,415 — 25,739,415 —

MINSK tRANSIt BANK FI — — — 5,289,566 — 5,289,566 —

Millex International B 20,000,000 — — — — 20,000,000 —

Bosnia and Herzegovina Bekto Precisa d.o.o. B 10,393,600 — — — — 10,393,600 —

Sisecam Soda Lukavac B 21,436,800 — 1,200,000 — — 22,636,800 —

Bulgaria Eurobank EFG Bulgaria Ad C — — — 28,429,873 — 28,429,873 —

Central Asia Region Fawaz Abdulaziz Al Hokair & Co. B 25,000,000 — — — — 25,000,000 —

Central Europe Region Organica Water Inc. B — 4,000,000 — — — 4,000,000 —

Croatia Atlantic trade d.o.o. Croatia B 20,515,033 — — — — 20,515,033 —

SAME dEUtZ-FAHR Zetelice d.O.O. B 15,096,600 — — — — 15,096,600 —

Vjetroelektrana jelinak d.o.o, B 20,139,350 — — — — 20,139,350 30,401,280

Georgia Bank of Georgia FI-2 — — — 26,065,351 — 26,065,351 —

Clean Energy Invest AS A 365,200 — — — — 365,200 —

jSC Bank Republic FI-3 — — — 3,435,611 — 3,435,611 —

jSC MFO FINCA Georgia FI-3 4,000,000 — — — — 4,000,000 —

jSC m2 Real Estate B 10,000,000 — — — — 10,000,000 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)


Papua New Guinea Avenell Engineering System Limited B 4,000,000 — — — — 4,000,000 —

Bank South Pacific FI-2 — — — 4,191,792 — 4,191,792 —

Bank of South Pacific Limited FI-1 — — — — 65,064,125 65,064,125 —

Philippines Navegar I L.P. FI-2 — 20,000,000 — — — 20,000,000 —

Philippine Asset Growth One, Inc. FI 34,479,274 — — — — 34,479,274 —

Philippine Asset Growth two, Inc. FI-3 24,312,992 — — — — 24,312,992 —

Philippine Resources Savings Banking Corporation FI-3 — 15,911,873 — — — 15,911,873 —

thailand Bank of Ayudhya Public Company Limited FI 200,000,000 — — — — 200,000,000 —

Chalybs Cylinders Ltd. B 26,155,000 — — — — 26,155,000 —

timor-Leste tuba Rai Metin FI-3 500,000 — — — — 500,000 —

Vietnam An Binh Commercial joint Stock Bank FI — — — 2,250,000 — 2,250,000 —

Asia Commercial Bank C — — — 5,025,600 — 5,025,600 —

dongA Commercial joint Stock Bank FI-3 — — — 38,318,059 — 38,318,059 —

Methis Environmental Vietnam Co., Ltd. C — 700,000 — — — 700,000 —

Orient Commercial joint Stock Bank FI-2 — — — 78,452,423 — 78,452,423 —

SN Power Holdings Singapore, Inc. C 400,000 — — — — 400,000 —

Saigon thuong tin Commercial joint Stock Bank FI — — — 38,281,212 — 38,281,212 —

Vietnam International Commercial joint Stock Bank FI-2 — — — 162,200,000 — 162,200,000 —

Vietnam joint Stock Commercial Bank for Industry and trade FI — — — 25,000,000 — 25,000,000 —

Vietnam technological and Commercial joint Stock Bank FI-2 — — — 454,077,704 — 454,077,704 —

Vina Eco Board Co., Ltd. B — — 300,000 — — 300,000 —


Albania Banka Credins SHA FI-2 11,806,200 — 50,000 — — 11,856,200 —

Bankers Petroleum Ltd. B 50,000,000 — — — — 50,000,000 —

Armenia ACBA-Credit Agricole Bank Closed joint Stock Company FI-3 — — 1,000,000 — — 1,000,000 —

Ameriabank CjSC FI-3 — — 1,000,000 7,549,633 — 8,549,633 —

Armeconombank FI — — — 1,135,590 — 1,135,590 —

Byblos Bank Armenia C 5,000,000 — — — — 5,000,000 —

Euroterm Closed joint Stock Company B 2,500,000 — — — — 2,500,000 —

HSBC Bank Armenia cjsc FI 11,000,000 — — — — 11,000,000 —

Inecobank FI-3 — — — 2,000,000 — 2,000,000 —

Lydian International Ltd B — 1,949,162 — — — 1,949,162 —

Azerbaijan AccessBank FI-2 15,000,000 — — — — 15,000,000 —

AzeriGazbank FI — 1,114,366 — 3,176,417 — 4,290,783 —

dEMIRBANK OjSC FI — — — 10,568,704 — 10,568,704 —

Finca Azerbaijan LLC FI — — 350,000 — — 350,000 —

jSC Bank Respublika FI-2 14,000,000 — — 218,613 — 14,218,613 —

Belarus Belarusky Narodny Bank FI — — — 4,675,061 — 4,675,061 —

jSC BPS-BANK (Formerly Belpromstroibank) C — — — 23,958,415 — 23,958,415 —

jSC Belgazprombank C — — — 25,739,415 — 25,739,415 —

MINSK tRANSIt BANK FI — — — 5,289,566 — 5,289,566 —

Millex International B 20,000,000 — — — — 20,000,000 —

Bosnia and Herzegovina Bekto Precisa d.o.o. B 10,393,600 — — — — 10,393,600 —

Sisecam Soda Lukavac B 21,436,800 — 1,200,000 — — 22,636,800 —

Bulgaria Eurobank EFG Bulgaria Ad C — — — 28,429,873 — 28,429,873 —

Central Asia Region Fawaz Abdulaziz Al Hokair & Co. B 25,000,000 — — — — 25,000,000 —

Central Europe Region Organica Water Inc. B — 4,000,000 — — — 4,000,000 —

Croatia Atlantic trade d.o.o. Croatia B 20,515,033 — — — — 20,515,033 —

SAME dEUtZ-FAHR Zetelice d.O.O. B 15,096,600 — — — — 15,096,600 —

Vjetroelektrana jelinak d.o.o, B 20,139,350 — — — — 20,139,350 30,401,280

Georgia Bank of Georgia FI-2 — — — 26,065,351 — 26,065,351 —

Clean Energy Invest AS A 365,200 — — — — 365,200 —

jSC Bank Republic FI-3 — — — 3,435,611 — 3,435,611 —

jSC MFO FINCA Georgia FI-3 4,000,000 — — — — 4,000,000 —

jSC m2 Real Estate B 10,000,000 — — — — 10,000,000 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)


joint Stock Company Kor Standard Bank FI-2 7,000,000 — — — — 7,000,000 —

tBC Bank FI — 4,279,687 — 16,583,460 — 20,863,147 —

tetri Qudi LLC B 1,500,000 — — — — 1,500,000 —

Kazakhstan Bank CenterCredit FI — — — 4,105,032 — 4,105,032 —

Eastcomtrans LLP B 30,000,000 20,000,000 — — — 50,000,000 —

MicroCredit Organization Arnur Credit LLP FI-3 — — 115,000 — — 115,000 —

Subsidiary Bank Sberbank of Russia jSC FI-2 70,000,000 — — 21,885,747 — 91,885,747 —

Kosovo tEB Sh.A. FI-2 5,846,400 — — 258,450 — 6,104,850 —

Kyrgyz Republic CjSC Finca Micro-Credit Company FI — — 610,000 — — 610,000 —

Kompanion Financial Group Microfinance CjSC FI — — 250,000 — — 250,000 —

Macedonia, Former Yugoslav Republic of

NLB tutunska banka, A.d. Skopje FI — — — 3,575,728 — 3,575,728 —

Stopanska Banka a.d. Skopje C — — — 2,903,943 — 2,903,943 —

Universal Investment Bank Ad Skopje C — — — 287,507 — 287,507 —

Moldova Aragvi Holding International Limited B 30,000,000 1 — — — 30,000,001 20,000,000

Bostavan Wineries, Ltd. B — 252,000 — — — 252,000 —

CB Moldova Agroindbank SA FI — — — 2,000,000 — 2,000,000 —

Romania Banca Romaneasca S.A. C — — — 2,155,522 — 2,155,522 —

Banca transilvania S.A. FI-2 25,637,000 — — 1,830,850 — 27,467,850 —

Bancpost S.A. FI — — — 82,296,429 — 82,296,429 —

GE Garanti Bank FI — — — 375,016 — 375,016 —

Patria Credit IFN SA FI-3 10,425,123 — — — — 10,425,123 —

UniCredit tiriac Bank SA FI-1 37,039,781 — — — — 37,039,781 —

Russian Federation Almaz Capital Russia Fund II LP FI — 25,000,000 — — — 25,000,000 —

Asian-Pacific Bank (Open joint-stock company) FI 30,000,000 — — 26,641,760 — 56,641,760 —

Brunswick Rail Finance Limited B 50,000,000 — — — — 50,000,000 —

CREdIt BANK OF MOSCOW (OjSC) FI — 38,442,300 — 128,210,288 — 166,652,588 —

CapMan Russia Fund II, LP FI-2 — 19,507,500 — — — 19,507,500 —

Chuvash Republic B 31,895,237 — — — — 31,895,237 —

Elbrus Capital Fund II FI-2 — 20,000,000 — — — 20,000,000 —

IFC Russian Bank Capitalization Fund, LP FI — 41,747,245 — — — 41,747,245 —

IXcellerate Ltd. C 1,022,076 1,126,052 — — — 2,148,128 —

joint Stock Company Commercial Bank “Center-Invest” FI-2 29,915,240 — — — — 29,915,240 —

OAO Promsvyazbank C — — — 117,155,923 — 117,155,923 —

OjSC Bank Saint Petersburg C — — — 2,662,000 — 2,662,000 —

OjSC KKS-Group B 8,095,855 5,592,484 — — — 13,688,339 —

RosEvroBank joint Stock Commercial Bank C — — — 14,000,000 — 14,000,000 —

Samara region B 64,423,131 — — — — 64,423,131 —

Sanoh Rus limited liability company B — 6,000,000 — — — 6,000,000 —

transcapitalbank FI — 1,598,850 — 28,316,005 — 29,914,855 152,352,875

ZAO Credit Evropa Bank FI — — — 2,539,102 — 2,539,102 —

ZAO Locko Bank FI — 2,414,098 — 117,901,940 — 120,316,039 —

ZAO Masterslavl B 4,618,913 — — — — 4,618,913 —

Serbia Eurobank EFG a.d. Beograd FI — — — 61,593,625 — 61,593,625 —

Grand Prom d.o.o. B 14,689,632 — — — — 14,689,632 —

Victoria Group a.d. B 75,143,100 — — — — 75,143,100 —

Slovenia droga Kolinska d.d. Slovenija B 29,825,335 — — — — 29,825,335 —

Southern Europe Region European Fund for Southeast Europe FI — 20,328,750 — — — 20,328,750 —

Schwarz Group B 10,000,000 105,207,309 — 83,903,752 — 199,111,060 —

tajikistan Open joint Stock Company, Bank Eskhata FI — — — 269,500 — 269,500 —

turkey Acwa Guc Elektrik Isletme ve Yonetim Sanayi ve ticaret Ltd. Sti.

A 125,000,000 — — — — 125,000,000 —

Asyaport Liman A.S. B 75,000,000 — — — — 75,000,000 —

denizbank Covered Bond FI-2 69,525,558 — — — — 69,525,558 —

Earlybird digital East Fund 2012 SCA SICAR FI-2 — 25,000,000 — — — 25,000,000 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)


Fibabanka A.S. FI-2 — — — 32,391,400 — 32,391,400 —

Finansbank A.S. FI-2 75,000,000 — — — — 75,000,000 —

Is Finansal Kiralama A.S. FI-2 35,000,000 — — — — 35,000,000 —

Izmir Buyuksehir Belediyesi C 58,522,500 — — — — 58,522,500 —

Izmir Su ve Kanalizasyon Idaresi Genel Mudurlugu B 35,891,800 — — — — 35,891,800 —

Kipas Kagit Sanayi Isletmeleri A.S. B 50,000,000 — — — — 50,000,000 —

Mediterra Capital Partners I, LP FI — 19,999,500 — — — 19,999,500 —

Modern Karton Sanayii ve ticaret A.S. B 8,000,000 — — — — 8,000,000 —

Sanko tekstil Isletmeleri Sanayi ve ticaret A.S. B 25,000,000 — — — — 25,000,000 —

Sekerbank t.A.S. FI-2 — — — 32,645,496 — 32,645,496 —

Super Film Ambalaj Sanayi ve ticaret A.S. B 45,000,000 — — — — 45,000,000 —

t.C Ozyegin Universitesi B 42,500,000 — — — — 42,500,000 —

t.C. Plato Meslek Yuksek Okulu B 6,000,000 — — — — 6,000,000 —

tURKIYE SINAI KALKINMA BANKASI, A.S. FI-2 75,000,000 — — — — 75,000,000 —

turkiye Sise ve Cam Fabrikalari, A.S. B 40,000,000 — — — — 40,000,000 —

Yapi ve Kredi Bankasi, A.S. FI — — — 109,249,592 — 109,249,592 —

Ukraine Axzon A/S B — 21,086,940 — — — 21,086,940 —

CjSC Myronivsky Hliboproduct B 50,000,000 — — — — 50,000,000 —

FE Integrated Agrosystems B 16,000,000 — — — — 16,000,000 —

LLC Real Estate F.C.A.U. B 30,000,000 — — — — 30,000,000 —

LLC Savservice Center B 10,000,000 — — — — 10,000,000 —

LLC “Firm “Astarta-Kyiv” B 40,000,000 — — — — 40,000,000 —

Limited Liability Company “Okkoskhidinvest” B 30,000,000 — — — — 30,000,000 55,000,000

NIBULON AGRICULtURAL LIMItEd LIABILItY COMPANY B 30,000,000 — — — — 30,000,000 —

PjSC OtP Bank C — — — 1,297,477 — 1,297,477 —

Raiffeisen Bank Aval FI — — — 35,537,369 — 35,537,369 —

the State Export Import Bank of Ukraine C — — — 35,976,124 — 35,976,124 —

Uzbekistan Asaka Bank C — — — 527,588 — 527,588 —

LATIN AMERICA ANd ThE CARIBBEAN

Argentina BBVA Frances S.A. C — — — 10,000,000 — 10,000,000 —

Banco CMF S.A. C — — — 5,678,341 — 5,678,341 —

Banco Itau Argentina S.A. C — — — 29,506,093 — 29,506,093 —

Banco Patagonia S.A. FI — — — 4,858,886 — 4,858,886 —

Banco Supervielle S.A. C — — — 3,887,620 — 3,887,620 —

Banco de Galicia y Buenos Aires, S.A. FI — — — 66,719,226 — 66,719,226 —

S.A. San Miguel A.G.I.C.I. y F. B — — 450,000 — — 450,000 —

Belize Atlantic Bank Belize FI — — — 1,726,825 — 1,726,825 —

Banco Bisa S.A. C — — — 2,474,781 — 2,474,781 —

Banco Ganadero FI-2 — — — 3,745,610 — 3,745,610 —

Banco Mercantil S.A. FI — — — 5,286,851 — 5,286,851 —

Banco de Credito C — — — 125,494 — 125,494 —

Brazil AEGEA Saneamento S/A B — 12,396,182 — — — 12,396,182 —

BHG S.A. – Brazilian Hospitality Group B — 24,368,902 — — — 24,368,902 —

Banco ABC BRASIL S.A. FI-2 — — — 65,049,747 — 65,049,747 —

Banco Cooperativo Sicredi S/A FI — 10,000,000 — — — 10,000,000 —

Banco daycoval S.A. FI-2 — 14,927,972 — 61,000,000 — 75,927,972 —

Banco Fibra S.A. FI — — — 144,884,025 — 144,884,025 —

Banco Industrial do Brasil S.A. FI-2 — — — 34,480,000 — 34,480,000 —

Banco Industrial e Comercial S.A. FI — — — 151,256,273 — 151,256,273 —

Banco Indusval S.A. FI-2 — — — 53,681,788 — 53,681,788 —

Banco Itau Unibanco S.A. FI-2 100,000,000 — — — — 100,000,000 300,000,000

Banco Pine S.A. C — — — 167,406,100 — 167,406,100 —

Banco Sofisa S.A. FI — — — 25,527,201 — 25,527,201 —

Canopus Holding S.A. B — 25,000,000 — — — 25,000,000 —

Centro de Imagem diagnosticos S.A. B 50,000,000 — — — — 50,000,000 —

Companhia Brasileira de Securitizacao C — 39,182 — — — 39,182 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)


Fibabanka A.S. FI-2 — — — 32,391,400 — 32,391,400 —

Finansbank A.S. FI-2 75,000,000 — — — — 75,000,000 —

Is Finansal Kiralama A.S. FI-2 35,000,000 — — — — 35,000,000 —

Izmir Buyuksehir Belediyesi C 58,522,500 — — — — 58,522,500 —

Izmir Su ve Kanalizasyon Idaresi Genel Mudurlugu B 35,891,800 — — — — 35,891,800 —

Kipas Kagit Sanayi Isletmeleri A.S. B 50,000,000 — — — — 50,000,000 —

Mediterra Capital Partners I, LP FI — 19,999,500 — — — 19,999,500 —

Modern Karton Sanayii ve ticaret A.S. B 8,000,000 — — — — 8,000,000 —

Sanko tekstil Isletmeleri Sanayi ve ticaret A.S. B 25,000,000 — — — — 25,000,000 —

Sekerbank t.A.S. FI-2 — — — 32,645,496 — 32,645,496 —

Super Film Ambalaj Sanayi ve ticaret A.S. B 45,000,000 — — — — 45,000,000 —

t.C Ozyegin Universitesi B 42,500,000 — — — — 42,500,000 —

t.C. Plato Meslek Yuksek Okulu B 6,000,000 — — — — 6,000,000 —

tURKIYE SINAI KALKINMA BANKASI, A.S. FI-2 75,000,000 — — — — 75,000,000 —

turkiye Sise ve Cam Fabrikalari, A.S. B 40,000,000 — — — — 40,000,000 —

Yapi ve Kredi Bankasi, A.S. FI — — — 109,249,592 — 109,249,592 —

Ukraine Axzon A/S B — 21,086,940 — — — 21,086,940 —

CjSC Myronivsky Hliboproduct B 50,000,000 — — — — 50,000,000 —

FE Integrated Agrosystems B 16,000,000 — — — — 16,000,000 —

LLC Real Estate F.C.A.U. B 30,000,000 — — — — 30,000,000 —

LLC Savservice Center B 10,000,000 — — — — 10,000,000 —

LLC “Firm “Astarta-Kyiv” B 40,000,000 — — — — 40,000,000 —

Limited Liability Company “Okkoskhidinvest” B 30,000,000 — — — — 30,000,000 55,000,000

NIBULON AGRICULtURAL LIMItEd LIABILItY COMPANY B 30,000,000 — — — — 30,000,000 —

PjSC OtP Bank C — — — 1,297,477 — 1,297,477 —

Raiffeisen Bank Aval FI — — — 35,537,369 — 35,537,369 —

the State Export Import Bank of Ukraine C — — — 35,976,124 — 35,976,124 —

Uzbekistan Asaka Bank C — — — 527,588 — 527,588 —


Argentina BBVA Frances S.A. C — — — 10,000,000 — 10,000,000 —

Banco CMF S.A. C — — — 5,678,341 — 5,678,341 —

Banco Itau Argentina S.A. C — — — 29,506,093 — 29,506,093 —

Banco Patagonia S.A. FI — — — 4,858,886 — 4,858,886 —

Banco Supervielle S.A. C — — — 3,887,620 — 3,887,620 —

Banco de Galicia y Buenos Aires, S.A. FI — — — 66,719,226 — 66,719,226 —

S.A. San Miguel A.G.I.C.I. y F. B — — 450,000 — — 450,000 —

Belize Atlantic Bank Belize FI — — — 1,726,825 — 1,726,825 —

Banco Bisa S.A. C — — — 2,474,781 — 2,474,781 —

Banco Ganadero FI-2 — — — 3,745,610 — 3,745,610 —

Banco Mercantil S.A. FI — — — 5,286,851 — 5,286,851 —

Banco de Credito C — — — 125,494 — 125,494 —

Brazil AEGEA Saneamento S/A B — 12,396,182 — — — 12,396,182 —

BHG S.A. – Brazilian Hospitality Group B — 24,368,902 — — — 24,368,902 —

Banco ABC BRASIL S.A. FI-2 — — — 65,049,747 — 65,049,747 —

Banco Cooperativo Sicredi S/A FI — 10,000,000 — — — 10,000,000 —

Banco daycoval S.A. FI-2 — 14,927,972 — 61,000,000 — 75,927,972 —

Banco Fibra S.A. FI — — — 144,884,025 — 144,884,025 —

Banco Industrial do Brasil S.A. FI-2 — — — 34,480,000 — 34,480,000 —

Banco Industrial e Comercial S.A. FI — — — 151,256,273 — 151,256,273 —

Banco Indusval S.A. FI-2 — — — 53,681,788 — 53,681,788 —

Banco Itau Unibanco S.A. FI-2 100,000,000 — — — — 100,000,000 300,000,000

Banco Pine S.A. C — — — 167,406,100 — 167,406,100 —

Banco Sofisa S.A. FI — — — 25,527,201 — 25,527,201 —

Canopus Holding S.A. B — 25,000,000 — — — 25,000,000 —

Centro de Imagem diagnosticos S.A. B 50,000,000 — — — — 50,000,000 —

Companhia Brasileira de Securitizacao C — 39,182 — — — 39,182 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)


Equatorial Energia S.A. A — 105,207,309 — — — 105,207,309 —

FIRSt Brazil Impact Investing Fund, LP FI-2 — 15,000,000 — — — 15,000,000 —

Gavea Fundo de Investimento Em Cotas de Fundo de Investimento Em direitos Creditorios

FI-1 — 9,516,106 — — — 9,516,106 —

Gávea Crédito Estruturado Fundo de Investimento Em direitos Creditórios

FI-1 19,032,212 — — — — 19,032,212 —

Munich Re Surety Facility FI-3 — — — — 70,000,000 70,000,000 —

NBC BANK BRASIL S.A. BANCO MULtIPLO C — — — 11,000,000 — 11,000,000 —

Recovery do Brasil Consultoria S.A. FI — 100,000,000 — — — 100,000,000 —

Sul America S.A. FI-3 — 197,604,051 — — — 197,604,051 —

Caribbean Region Portland Private Equity FI-1 — 20,000,000 — — — 20,000,000 —

Chile Banco Bilbao Vizcaya Argentaria (Chile), S.A C — — — 8,545,485 — 8,545,485 —

Banco de Credito e Inversiones FI-2 75,000,000 — — — — 75,000,000 —

Bco Internacional SA FI-2 — — — 6,000,000 — 6,000,000 —

Corpbanca FI-1 — 22,752,239 — — — 22,752,239 —

Inversiones Magallanes S.A. FI — 259,281 — — — 259,281 —

Virgin Mobile Chile SPA C 11,000,000 — — — — 11,000,000 —

Colombia BBVA Colombia S.A. C — — — 10,415,806 — 10,415,806 —

Credivalores - Crediservicios S.A.S FI-3 25,000,000 — — — — 25,000,000 —

Energia Integral Andina S.A. B 10,000,000 — — — — 10,000,000 —

Grupo Factoring de Occidente S.A.S FI-3 3,000,000 — — — — 3,000,000 —

PetroNova Inc. B — 14,981,273 — — — 14,981,273 —

Recaudo Bogota SAS C 55,000,000 — 7,500,000 — — 62,500,000 —

tRIAdA S.A.S. B — 10,000,000 — — — 10,000,000 —

Virgin Mobile Colombia S.A.S C 14,000,000 — — — — 14,000,000 —

Costa Rica Banco General (Costa Rica) S.A. FI-2 20,000,000 — — — — 20,000,000 —

Banco Improsa S.A. FI — — — 15,190,000 — 15,190,000 —

Banco LAFISE Costa Rica, S.A C — — — 19,984,077 — 19,984,077 —

Banco Promerica de Costa Rica, S.A. FI — — — 13,422,996 — 13,422,996 —

Coopealianza R.L. FI-2 9,996,002 — — — — 9,996,002 —

Grupo Financiero Coocique R.L FI-3 5,001,000 — — — — 5,001,000 —

dominican Republic Banco Multiple Leon, S.A. C — — — 8,740,945 — 8,740,945 —

Indicana Holdings Inc B 20,000,000 — — — — 20,000,000 10,000,000

InterEnergy Holdings A — 50,000,001 — — — 50,000,001 —

Unigold Inc. B — 4,943,887 — — — 4,943,887 —

Ecuador Procesadora Nacional de Alimentos C.A. - PRONACA B 25,000,000 — — — — 25,000,000 —

El Salvador Banco Agricola S.A. FI — — — 9,000,000 — 9,000,000 —

La Hipotecaria C 10,000,000 — — — — 10,000,000 —

Guatemala Banco Gyt Continental S.A. FI — 830,140 — 65,000,000 — 65,830,140 —

Banco Industrial S.A. (Guatemala) FI — — — 71,483,456 — 71,483,456 —

Banco Internacional S.A. C — — — 23,000,000 — 23,000,000 —

Compartamos, S.A. FI-3 7,683,361 — — — — 7,683,361 —

Seguros G&t, S.A. FI — 5,250,000 — — — 5,250,000 —

Guyana Guyana Goldfields Inc B — 5,539,767 — — — 5,539,767 —

Haiti turgeau developments S.A. B 13,250,000 — — — — 13,250,000 13,250,000

Honduras BANCO dEL PAIS S.A. C — — — 10,000,000 — 10,000,000 —

Banco Atlantida S.A. FI — — — 69,934,882 — 69,934,882 —

Banco Financiera Centroamericana, S.A. FI-2 10,000,000 — — 8,000,000 — 18,000,000 —

Banco Financiera Comercial Hondurena S.A. (Banco Ficohsa) FI — — — 70,984,931 — 70,984,931 —

Banco LAFISE Honduras ,S.A. C — — — 10,000,000 — 10,000,000 —

jamaica MBj Airports Limited B 7,500,000 — — — — 7,500,000 7,500,000

Latin America Region Amerra Latin America Finance LLC FI-2 50,000,000 — — — — 50,000,000 —

Grupo Santillana de Ediciones, S.L. C 32,795,000 — — — — 32,795,000 —

IFC African, Latin American & Caribbean Fund, LP FI — 54,002,521 — — — 54,002,521 —

SAFtPAY, INC. C — 7,000,000 — — — 7,000,000 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)


Yellowpepper Holding Corp C — 113,441 — — — 113,441 —

Mexico Agrofinanzas S.A. Institucion de Banca Multiple FI — 1,394,483 — — — 1,394,483 —

Banco Mercantil del Norte, S. A. Institucion de Banca Multiple FI 44,563,770 — — — — 44,563,770 —

Banco Monex, S.A. Institucion de Banca Multiple C — — — 12,000,000 — 12,000,000 —

Banco del Bajio, S.A. FI — — — 36,615 — 36,615 —

Braskem Idesa, S.A.P.I. A 285,000,000 — — — — 285,000,000 350,000,000

CHG Meridian Mexico, S.A.P.I de C.V. FI 18,412,180 — — — — 18,412,180 —

Credit Suisse Mexico Opportunities trust FI-1 — 50,000,000 — — — 50,000,000 —

desarrolladora Homex S.A.B de C.V. B 141,882,673 — — — — 141,882,673 —

Edilar, S.A. de C.V. B 14,711,747 — — — — 14,711,747 —

Financiamiento Progresemos, SA de CV, SOFOM ENR FI — 1,789,607 — — — 1,789,607 —

Proyectos Adamantine S.A. de C.V. Sociedad Financiera de Objeto Multiple E.N.R.

C 496,295 — — — — 496,295 —

Grupo Calidra, S.A. de C.V. B 50,000,000 — — — — 50,000,000 40,000,000

Hospitaria tenedora, S.A.P.I. de C.V. B 10,062,271 — — — — 10,062,271 —

Norson Holding, S. de R.L. de C.V. B 40,000,000 — — — — 40,000,000 —

Proteak Uno S.A.P.I.B de C.V. B 10,000,000 — — — — 10,000,000 —

Servicios Comerciales de Energia, S.A. de C.V. B 25,316,045 — — — — 25,316,045 —

tenedora Nemak, S.A. de C.V. B 101,562,629 — — — — 101,562,629 —

tiendas Comercial Mexicana S.A. de C.V. B 423,323,112 — — — — 423,323,112 —

nnope B 47,055,952 — — — — 47,055,952 —

Urbi, desarrollos Urbanos, S.A.B. de C.V. B 50,000,000 — — — — 50,000,000 —

Nicaragua Banco de America Central, S.A. C — — — 20,000,000 — 20,000,000 —

Banco de Finanzas FI — — — 13,330,897 — 13,330,897 —

Banco de la Produccion S.A. C — — — 500,000 — 500,000 —

Consorcio Naviero Nicaraguense S.A. A 15,000,000 — — — — 15,000,000 —

LAFISE Bancentro, S.A. C — — — 19,600,000 — 19,600,000 —

Panama BBVA Panama S.A. FI — — — 15,194,689 — 15,194,689 —

Banco LAFISE Panamá, S.A. C — — — 547,253 — 547,253 —

desarrollos Urbanos Educativos S.A. B 25,000,000 — — — — 25,000,000 —

Multibank C — — — 82,840,778 — 82,840,778 —

Paraguay BANCO ItAU PARAGUAY S.A. FI — — — 106,000 — 106,000 —

Banco Bilbao Vizcaya Argentaria Paraguay S.A. FI-3 15,000,000 — — 24,540,074 — 39,540,074 —

Banco Continental S.A.E.C.A. FI — — — 15,453,500 — 15,453,500 —

Banco Regional S.A. FI 15,000,000 — — 14,447,550 — 29,447,550 —

Sudameris Bank FI — — — 31,936,000 — 31,936,000 —

Peru APM terminals Callao S.A. B 46,750,000 — — — — 46,750,000 170,250,000

BBVA Banco Continental FI-1 75,000,000 — — 7,330,785 — 82,330,785 —

Banco Interamericano de Finanzas S.A. FI-2 — 50,000,000 — 10,000,000 — 60,000,000 —

Suriname de Surinaamsche Bank N.V. C — — — 1,170,310 — 1,170,310 —

Uruguay Cooperativa Nacional de Productores de Leche B 30,000,000 — — — — 30,000,000 —

Girocantex S.A. B 74,000,000 — — — — 74,000,000 30,000,000

Nuevo Banco Comercial S.A. FI — — — 38,011 — 38,011 —

Surinor S.A. B 9,000,000 — — — — 9,000,000 —

MIddLE EAST ANd NORTh AFRICA

Afghanistan Afghanistan International Bank CjSC C — — — 1,400,490 — 1,400,490 —

telecom development Company Afghanistan Limited B 65,000,000 — — — — 65,000,000 —

Egypt, Arab Republic of Nile Kordsa Company for Industrial Fabrics SAE B 11,000,000 — — — — 11,000,000 —

Ahli United Bank (Egypt) S.A.E. FI — — — 56,150,000 — 56,150,000 —

Fawry for Banking and Payment technology Services SAE C — 6,000,000 — — — 6,000,000 —

Petroceltic International PLC B 100,000,000 — — — — 100,000,000 —

transglobe Energy Corporation B 33,333,333 8,000,000 — — — 41,333,333 —

Iraq Commercial Bank of Iraq FI — 12,128,923 — — — 12,128,923 —

Gulftainer Company B 30,000,000 — — — — 30,000,000 —

Karbala Cement Manufacturing Limited B 70,000,000 — — — — 70,000,000 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)


Yellowpepper Holding Corp C — 113,441 — — — 113,441 —

Mexico Agrofinanzas S.A. Institucion de Banca Multiple FI — 1,394,483 — — — 1,394,483 —

Banco Mercantil del Norte, S. A. Institucion de Banca Multiple FI 44,563,770 — — — — 44,563,770 —

Banco Monex, S.A. Institucion de Banca Multiple C — — — 12,000,000 — 12,000,000 —

Banco del Bajio, S.A. FI — — — 36,615 — 36,615 —

Braskem Idesa, S.A.P.I. A 285,000,000 — — — — 285,000,000 350,000,000

CHG Meridian Mexico, S.A.P.I de C.V. FI 18,412,180 — — — — 18,412,180 —

Credit Suisse Mexico Opportunities trust FI-1 — 50,000,000 — — — 50,000,000 —

desarrolladora Homex S.A.B de C.V. B 141,882,673 — — — — 141,882,673 —

Edilar, S.A. de C.V. B 14,711,747 — — — — 14,711,747 —

Financiamiento Progresemos, SA de CV, SOFOM ENR FI — 1,789,607 — — — 1,789,607 —

Proyectos Adamantine S.A. de C.V. Sociedad Financiera de Objeto Multiple E.N.R.

C 496,295 — — — — 496,295 —

Grupo Calidra, S.A. de C.V. B 50,000,000 — — — — 50,000,000 40,000,000

Hospitaria tenedora, S.A.P.I. de C.V. B 10,062,271 — — — — 10,062,271 —

Norson Holding, S. de R.L. de C.V. B 40,000,000 — — — — 40,000,000 —

Proteak Uno S.A.P.I.B de C.V. B 10,000,000 — — — — 10,000,000 —

Servicios Comerciales de Energia, S.A. de C.V. B 25,316,045 — — — — 25,316,045 —

tenedora Nemak, S.A. de C.V. B 101,562,629 — — — — 101,562,629 —

tiendas Comercial Mexicana S.A. de C.V. B 423,323,112 — — — — 423,323,112 —

nnope B 47,055,952 — — — — 47,055,952 —

Urbi, desarrollos Urbanos, S.A.B. de C.V. B 50,000,000 — — — — 50,000,000 —

Nicaragua Banco de America Central, S.A. C — — — 20,000,000 — 20,000,000 —

Banco de Finanzas FI — — — 13,330,897 — 13,330,897 —

Banco de la Produccion S.A. C — — — 500,000 — 500,000 —

Consorcio Naviero Nicaraguense S.A. A 15,000,000 — — — — 15,000,000 —

LAFISE Bancentro, S.A. C — — — 19,600,000 — 19,600,000 —

Panama BBVA Panama S.A. FI — — — 15,194,689 — 15,194,689 —

Banco LAFISE Panamá, S.A. C — — — 547,253 — 547,253 —

desarrollos Urbanos Educativos S.A. B 25,000,000 — — — — 25,000,000 —

Multibank C — — — 82,840,778 — 82,840,778 —

Paraguay BANCO ItAU PARAGUAY S.A. FI — — — 106,000 — 106,000 —

Banco Bilbao Vizcaya Argentaria Paraguay S.A. FI-3 15,000,000 — — 24,540,074 — 39,540,074 —

Banco Continental S.A.E.C.A. FI — — — 15,453,500 — 15,453,500 —

Banco Regional S.A. FI 15,000,000 — — 14,447,550 — 29,447,550 —

Sudameris Bank FI — — — 31,936,000 — 31,936,000 —

Peru APM terminals Callao S.A. B 46,750,000 — — — — 46,750,000 170,250,000

BBVA Banco Continental FI-1 75,000,000 — — 7,330,785 — 82,330,785 —

Banco Interamericano de Finanzas S.A. FI-2 — 50,000,000 — 10,000,000 — 60,000,000 —

Suriname de Surinaamsche Bank N.V. C — — — 1,170,310 — 1,170,310 —

Uruguay Cooperativa Nacional de Productores de Leche B 30,000,000 — — — — 30,000,000 —

Girocantex S.A. B 74,000,000 — — — — 74,000,000 30,000,000

Nuevo Banco Comercial S.A. FI — — — 38,011 — 38,011 —

Surinor S.A. B 9,000,000 — — — — 9,000,000 —


Afghanistan Afghanistan International Bank CjSC C — — — 1,400,490 — 1,400,490 —

telecom development Company Afghanistan Limited B 65,000,000 — — — — 65,000,000 —

Egypt, Arab Republic of Nile Kordsa Company for Industrial Fabrics SAE B 11,000,000 — — — — 11,000,000 —

Ahli United Bank (Egypt) S.A.E. FI — — — 56,150,000 — 56,150,000 —

Fawry for Banking and Payment technology Services SAE C — 6,000,000 — — — 6,000,000 —

Petroceltic International PLC B 100,000,000 — — — — 100,000,000 —

transglobe Energy Corporation B 33,333,333 8,000,000 — — — 41,333,333 —

Iraq Commercial Bank of Iraq FI — 12,128,923 — — — 12,128,923 —

Gulftainer Company B 30,000,000 — — — — 30,000,000 —

Karbala Cement Manufacturing Limited B 70,000,000 — — — — 70,000,000 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)


jordan AL EtIHAd C — — — 4,960,946 — 4,960,946 —

Bank of jordan Ltd C — — — 2,410,680 — 2,410,680 —

CtI Group Inc. B 2,000,000 — — — — 2,000,000 —

Cairo Amman Bank C — — — 6,617,662 — 6,617,662 —

Capital Bank of jordan FI — — — 38,429,179 — 38,429,179 —

Middle East Microcredit Company (non-profit) LLC FI-3 2,000,000 — — — — 2,000,000 —

tamweelcom FI-3 2,000,000 — — — — 2,000,000 —

Lebanon BLC bank S.A.L. C — — — 6,044,073 — 6,044,073 —

Bank of Beirut FI 10,000,000 105,207,309 — — — 115,207,309 —

Bank of Beirut and the Arab Countries S.A.L. C — — — 6,668,473 — 6,668,473 —

Banque Libano-Francaise C — — — 125,316,420 — 125,316,420 —

Butec Group S.A.L. (Holding) B 8,000,000 — — — — 8,000,000 —

Credit Libanais SAL FI — — — 83,903,752 — 83,903,752 —

Fransabank SAL (Fransabank) FI — — — 114,585,605 — 114,585,605 —

Vitas SAL FI 2,000,000 — — — — 2,000,000 —

MENA Region FIMBank P.L.C. FI-3 30,000,000 — — 52,344,500 — 82,344,500 —

GC Credit Opportunities GP Limited FI-2 — 20,000,000 — — — 20,000,000 —

Metito Holdings Limited B 50,000,000 599,154 — — — 50,599,154 —

Renaissance Services SAOG B 30,000,000 — — — — 30,000,000 —

Sakr Energy Solutions FZCO B 12,000,000 5,076,984 — — — 17,076,984 —

Morocco Banque Centrale Populaire S.A. FI — 62,042,172 — — — 62,042,172 —

Capital North Africa Venture Fund II SICAV-SIF S.C.A. FI — 13,218,500 — — — 13,218,500 —

Institut des Hautes Etudes de Management B — 7,000,000 — — — 7,000,000 —

Oman Ahli Bank S.A.O.G. FI — 6,495,980 — — — 6,495,980 —

BANKMUSCAt SAOG FI-1 — 82,497,857 — — — 82,497,857 —

Pakistan Allied Bank Limited FI — — — 3,053,601 — 3,053,601 —

Bank Al Habib Limited C — — — 36,400,664 — 36,400,664 —

Bank Alfalah Limited C — — — 15,564,790 — 15,564,790 —

BankIslami Pakistan Limited C — — — 5,680,602 — 5,680,602 —

Habib Bank Limited (HBL) FI — — — 70,351,759 — 70,351,759 —

Habib Metropolitan Bank Ltd. C — — — 67,179,572 — 67,179,572 —

IMPERIAL dEVELOPERS & BUILdERS (PRIVAtE) LIMItEd B 11,000,000 — — — — 11,000,000 —

Karachi Organic Energy (Private) Limited C 2,500,000 — — — — 2,500,000 —

MCB Bank Limited C — — — 56,661,711 — 56,661,711 —

Meezan Bank Limited U — — — 15,550,396 — 15,550,396 —

NIB Bank Limited C — — — 25,138,022 — 25,138,022 —

SilkBank Limited FI — — — 12,965,237 — 12,965,237 —

Soneri Bank Limited C — — — 16,340,430 — 16,340,430 —

United Bank Limited C — — — 7,036,890 — 7,036,890 —

tunisia Amen Bank S.A. FI-2 — 4,796,212 — — — 4,796,212 —

ENdA Inter-Arabe FI 6,292,870 — — — — 6,292,870 —

West Bank and Gaza Bank of Palestine FI — — — 14,524,354 — 14,524,354 —

National Bank U — — — 300,000 — 300,000 —

SOuTh ASIA

Bangladesh AB Bank Limited FI-3 35,000,000 — — 2,014,210 — 37,014,210 —

Ananta Apparels Limited B 6,250,000 — — — — 6,250,000 —

BRAC Bank FI-2 — — — 142,702,612 — 142,702,612 —

Butterfly Marketing Limited B — 6,294,672 — — — 6,294,672 —

Eastern Bank Limited C — — — 123,877,282 — 123,877,282 —

GrameenPhone Limited B 150,000,000 — — — — 150,000,000 40,000,000

Green delta Insurance Company Ltd. FI — 9,990,848 — — — 9,990,848 —

Leopard Bangladesh Fund L.P. FI-2 — 15,000,000 — — — 15,000,000 —

Southeast Bank Limited FI — — — 38,330,263 — 38,330,263 —

the City Bank Limited FI-2 — — — 33,598,750 — 33,598,750 —

bKash Limited FI-3 — 10,000,000 — — — 10,000,000 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)

SOuTh ASIA

Bhutan Bank of Bhutan C — — — 163,975 — 163,975 —

Bhutan National Bank Limited FI-1 — 28,932,663 — 490,712 — 29,423,375 —

India AtC tires Private Limited B — 10,000,000 — — — 10,000,000 —

Aavishkaar Goodwell India Microfinance development Company II

FI — 4,200,000 — — — 4,200,000 —

Avanse Financial Services Pvt. Ltd FI-3 — 2,257,236 — — — 2,257,236 —

Azure Power India Private Limited B 1,421,936 473,979 — — — 1,895,914 —

Azure Sun Energy Private Limited C 2,939,866 — — — — 2,939,866 —

Bhilwara Energy Limited A — 1,029,253 — — — 1,029,253 —

CapAleph Indian Millennium Fund FI — 15,000,000 — — — 15,000,000 —

dQ Entertainment Plc C — 1,500,000 — — — 1,500,000 —

dewan Housing Finance Corporation Ltd. FI-3 70,000,000 — — — — 70,000,000 —

Ecolibrium Energy Private Limited C — 750,000 — — — 750,000 —

Fortis Healthcare Limited B 55,000,000 45,000,000 — — — 100,000,000 —

Green Infra Solar Farms Limited B 8,107,865 — — — — 8,107,865 —

Green Infra Solar Projects Limited B 2,103,371 — — — — 2,103,371 —

Gujarat Pipavav Port Limited B 60,000,000 — — — — 60,000,000 92,000,000

Hikal Limited B 8,000,000 — — — — 8,000,000 —

IFMR Rural Channels and Services Private Limited FI-3 — 7,081,526 — — — 7,081,526 —

Inabensa Bharat Private Limited B 14,000,000 — — — — 14,000,000 —

India 2020 Fund II Limited FI-2 — 25,000,000 — — — 25,000,000 —

Inox Renewables (jaisalmer) Limited B 50,000,000 — — — — 50,000,000 —

jMt Auto Limited B 9,000,000 — — — — 9,000,000 —

jain Irrigation Systems Ltd B 50,000,000 9,971,510 — — — 59,971,510 65,000,000

Kaizen Private Equity FI — 3,000,000 — — — 3,000,000 —

Kotak Mahindra Bank Limited FI — — — 36,098,008 — 36,098,008 —

LNj Power Ventures Limited B 7,531,727 — — — — 7,531,727 —

Meghmani Finechem Limited B — 1,240,340 — — — 1,240,340 —

NSL Renewable Power Pvt Ltd A 5,000,000 — — — — 5,000,000 —

NSL Wind Power Company (Satara) Pvt Limited B 18,353,198 — — — — 18,353,198 —

National Collateral Management Services Limited B — 3,200,000 — — — 3,200,000 —

OCL India Limited A 40,000,000 — — — — 40,000,000 —

PtC INdIA FINANCIAL SERVICES LIMItEd FI-2 30,000,000 — — — — 30,000,000 —

Power Grid Corporation of India Limited A 100,000,000 — — — — 100,000,000 120,000,000

Ramkrishna Forgings Limited B 14,000,000 4,943,820 — — — 18,943,820 —

Religare Enterprises Limited FI-2 74,994,129 5,871 — — — 75,000,000 —

Rhodia Inc. B 85,768,693 — — — — 85,768,693 —

SEI Solar Power Pvt. Ltd B 12,291,134 — — — — 12,291,134 —

Snowman Logistics Limited B 2,763,194 — — — — 2,763,194 —

Suryoday Microfinance Private Limited FI-3 — 2,783,964 — — — 2,783,964 —

the Ratnakar Bank Limited FI-2 — 22,068,584 — — — 22,068,584 —

Utkarsh Micro Finance Private Limited FI-3 — 774,336 — — — 774,336 —

Value and Budget Housing Corporation Private Limited B — 11,061,947 — — — 11,061,947 —

YES BANK Ltd FI — — — 13,887,266 — 13,887,266 —

Nepal Bank of Kathmandu Limited FI — — — 3,462,156 — 3,462,156 —

Buddha Air Private Limited B 6,900,000 — — — — 6,900,000 —

Butwal Power Company (BPC) B 2,500,000 — — — — 2,500,000 —

Himalayan Bank Limited C — — — 1,225,033 — 1,225,033 —

Laxmi Bank Limited C — — — 47,680 — 47,680 —

Nepal Industrial and Commercial Bank Ltd. C — — — 874,107 — 874,107 —

Nepal Investment Bank Ltd C — — — 6,639,677 — 6,639,677 —

Southern Asia Region Earthport PLC C — 10,000,000 — — — 10,000,000 —

Sri Lanka Cargills Agriculture and Commercial Bank Limited FI-1 — 3,876,273 — — — 3,876,273 —

Commercial Bank of Ceylon FI-1 — — — 7,427,714 — 7,427,714 —

National development Bank PLC FI-2 24,000,000 — — — — 24,000,000 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)

SOuTh ASIA

National development Bank Plc. FI — — — 165,876 — 165,876 —

Nations trust Bank Ltd. C — — — 349,741 — 349,741 —

Softlogic Holdings PLC B 10,000,000 — — — — 10,000,000 —

Uni Walkers (Private) Limited B 15,000,000 — — — — 15,000,000 —

Union Bank of Colombo PLC C — — — 253,192 — 253,192 —

SuB-SAhARAN AFRICA

Africa Region Actis Africa Real Estate Fund 2 LP B — 10,000,000 — — — 10,000,000 —

African development Partners II LP FI-2 — 40,000,000 — — — 40,000,000 —

Afrimax Limited B — 10,000,000 — — — 10,000,000 —

BNP Paribas (Suisse) SA & BNP Paribas FI-2 250,000,000 — — — — 250,000,000 —

Business Partners International (Proprietary) Limited FI — 10 — — — 10 —

diViNetworks Ltd. C — 5,000,000 — — — 5,000,000 —

EtC Group B 70,000,000 — — — — 70,000,000 —

Flexenclosure AB (publ) C — 12,258,619 — — — 12,258,619 —

IHS Holding Limited B — 10,000,000 — — — 10,000,000 —

IHS Nigeria Plc B 25,000,000 35,000,000 — — — 60,000,000 60,000,000

Root Capital, Inc. FI-2 5,000,000 — — — — 5,000,000 —

Satya Capital Africa Fund II L.P. FI-2 — 40,000,000 — — — 40,000,000 —

Angola Banco de Fomento. S.A.R.L C — — — 74,386,926 — 74,386,926 —

Benin diamond Bank Benin S.A. C — — — 38,357,747 — 38,357,747 —

Ecobank Benin C — — — 24,204,404 — 24,204,404 —

Botswana tsodilo Resource Limited B — 1,997,503 — — — 1,997,503 —

Burkina Faso Coris Bank International S.A. C — — — 142,033 — 142,033 —

Ecobank-Burkina C — — — 9,634,919 — 9,634,919 —

Gryphon Minerals B — 1,561,096 — — — 1,561,096 —

Burundi Interbank Burundi S.A. FI — — — 252,000 — 252,000 —

Cameroon Ecobank Cameroun S.A. FI — — — 6,834,458 — 6,834,458 —

Societe Commerciale de Banque Cameroun FI-2 — — — 18,332,382 — 18,332,382 —

Central African Republic Ecobank Centrafrique S. A. FI — — — 202,015 — 202,015 —

Chad Ecobank tchad S.A. FI — — — 1,865,881 — 1,865,881 —

Congo, democratic Republic of Advans Banque Congo FI 2,000,000 — — — — 2,000,000 —

FINCA dRC S.A.R.L FI-3 4,000,000 — — — — 4,000,000 —

Rawbank Commercial Banking FI-2 — — — 2,251,870 — 2,251,870 —

Congo, Republic of Credit du Congo C — — — 13,532,151 — 13,532,151 —

Côte d’Ivoire Azito Energie, S.A. B 125,000,000 — 5,000,000 — — 130,000,000 —

Compagnie Hoteliere de la Lagune S.A. B 7,870,800 — — — — 7,870,800 —

Ecobank — Côte d’Ivoire S.A. C — — — 2,749,967 — 2,749,967 —

IAS International Aircraft Services Ltd. B 7,000,000 — — — — 7,000,000 —

Sama Resources Inc B — 1,265,761 — — — 1,265,761 —

Societe Ivoirienne de Banque C — — — 6,948,529 — 6,948,529 —

Eastern Africa Region Africa Railways Limited A — 2,079,275 — — — 2,079,275 —

Gambia, the Ecobank Gambia Limited C — — — 2,000,000 — 2,000,000 —

Ghana Advans Ghana Savings and Loans Company Limited FI — 497,822 — — — 497,822 —

Bank of Africa Ghana Limited FI-2 — — — 387,888 — 387,888 —

EB-ACCION Savings and Loans Company Limited FI — 141,814 — — — 141,814 —

Ecobank Ghana Limited FI — — — 68,416,806 — 68,416,806 —

Fidelity Bank Limited C — — — 5,992,800 — 5,992,800 —

Guaranty trust Bank (Ghana) Limited C — — — 55,769,356 — 55,769,356 —

HFC Bank Ghana Limited C — — — 9,262,550 — 9,262,550 —

Kosmos Energy Finance International A 33,000,000 — — — — 33,000,000 —

takoradi International Company (tICO) B 80,000,000 — 5,000,000 — — 85,000,000 —

Ut Bank Ltd FI-2 — — — 76,079,429 — 76,079,429 —

Guinea Ecobank Guinea C — — — 15,977,177 — 15,977,177 —

Kenya Bank of Africa Kenya Ltd FI — — — 5,774,323 — 5,774,323 —

Chase Bank (Kenya) Ltd C — — — 105,836 — 105,836 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)

SuB-SAhARAN AFRICA

Cooperative Bank of Kenya Limited FI-2 60,000,000 — — — — 60,000,000 —

dtBK RSF FI-2 — — — — 10,155,317 10,155,317 —

diamond trust of Kenya Limited FI-2 20,000,000 — — 6,774,372 — 26,774,372 —

Ecobank Kenya Limited FI — — — 4,413,002 — 4,413,002 —

Electrawinds SE C 3,000,000 — — — — 3,000,000 —

Fina Bank Kenya Limited C — — — 21,463 — 21,463 —

Gulf African Bank Limited FI — 4,982,497 — — — 4,982,497 —

Gulf Power Limited A 26,922,420 — — — — 26,922,420 26,922,420

Housing Finance Company of Kenya Limited FI-1 16,000,000 — — — — 16,000,000 —

I and M Bank Ltd. FI-2 — — — 13,118,498 — 13,118,498 —

Kenya Commercial Bank FI-2 40,000,000 — — 107,994,261 — 147,994,261 —

Kenya Power and Lighting Company Limited B 50,000,000 — — — — 50,000,000 —

Kenya tea development Agency Holdings Limited B 12,000,000 — — — — 12,000,000 —

Kipeto Energy Limited C 2,000,000 — — — — 2,000,000 —

Prime Bank Limited C — — — 8,422,320 — 8,422,320 —

Liberia AccessBank Liberia FI — 231,000 — — — 231,000 —

Ecobank Liberia FI — — — 12,000,000 — 12,000,000 —

Guaranty trust Bank (Liberia) Ltd C — — — 8,904,832 — 8,904,832 —

Hummingbird Resources Plc B — 4,751,100 — — — 4,751,100 —

Madagascar Bank of Africa Madagascar FI — — — 40,432,374 — 40,432,374 —

Malawi First Merchant Bank Ltd., Malawi C — — — 7,869,669 — 7,869,669 —

NBS Bank Limited FI — — — 1,470,576 — 1,470,576 —

Mali Ecobank Mali FI — — — 18,264,438 — 18,264,438 —

Mauritania Attijariwafa Bank Mauritanie S.A C — — — 8,571,734 — 8,571,734 —

BB ENERGY (GULF) dMCC B 127,500,000 — — — — 127,500,000 —

Generale de Banque de Mauritanie pour l’Investissement et le Commerce

FI — — — 11,817,545 — 11,817,545 —

Mozambique AFRICAN BANKING CORPORAtION MOZAMBIQUE C — — — 19,647,879 — 19,647,879 —

Niger Ecobank Niger C — — — 4,000,000 — 4,000,000 —

Nigeria AB Nigeria Microfinance Bank FI-3 — 572,337 — — — 572,337 —

Access Bank Plc FI-2 — — — 66,388,917 — 66,388,917 —

Access Bank Plc. FI-2 50,000,000 — — — — 50,000,000 —

diamond Bank Plc FI 47,200,000 — — 295,073,539 — 342,273,539 —

Ecobank Nigeria Plc FI — — — 38,511,386 — 38,511,386 —

Fidelity Bank C — — — 3,784,041 — 3,784,041 —

First City Monument Bank FI — — — 140,749,282 — 140,749,282 —

Guaranty trust Bank Plc. FI — — — 282,000 — 282,000 —

Indorama Eleme Fertilizer & Chemicals Limited B 150,000,000 — — — — 150,000,000 75,000,000

Kaizen Partners Limited FI — 20,250,000 — — — 20,250,000 —

LAPO Microfinance Bank FI-3 5,087,440 — — — — 5,087,440 —

Natural Prime Resources Nigeria Limited B 19,800,000 — — — — 19,800,000 —

RSF Access Bank FI-2 — — — — 11,203,588 11,203,588 —

Zenith Bank Plc C — — — 124,607,617 — 124,607,617 —

Rwanda Banque Commerciale du Rwanda (BCR) C — — — 5,672,158 — 5,672,158 —

Ecobank Rwanda Limited C — — — 11,415,589 — 11,415,589 —

São tomé and Príncipe Banco Internacional de São tomé e Príncipe C — — — 201,590 — 201,590 —

Senegal CBAO Groupe Attijariwafa C — — — 7,005,774 — 7,005,774 —

Ecobank Senegal C — — — 12,231,221 — 12,231,221 —

Matelec S.A.L. A 1,000,000 — — — — 1,000,000 —

MicroCred Senegal FI — 424,934 — — — 424,934 —

Sierra Leone Ecobank Sierra Leone Limited C — — — 2,000,000 — 2,000,000 —

Guranty trust Bank Sierra Leone C — — — 44,400 — 44,400 —

Sierra Leone Commercial Bank C — — — 112,495 — 112,495 —

South Africa Amakhala Emoyeni RE Project 1 (RF) Proprietary Ltd B 70,703,691 — 2,800,000 — — 73,503,691 —

Country Bird Holdings Limited B 25,000,000 — — — — 25,000,000 —




Code


Commitments ($)




Commitments ($)





[B-loans only] ($)

SuB-SAhARAN AFRICA

CustomCapitalSPV FI-2 26,764,804 — — — — 26,764,804 —

Hans Merensky Holdings (Proprietary) Limited B — 34,586,917 — — — 34,586,917 —

International Housing Solutions, S.à r.l. FI-2 — 25,000,000 — — — 25,000,000 —

Kaxu Solar One (RF) Proprietary Limited B 75,514,769 — 1,325,000 — — 76,839,769 —

Khi Solar One (RF) Proprietary Limited B 69,450,224 — 1,215,000 — — 70,665,224 —

Petra diamonds Limited B 25,000,000 3,007,273 — — — 28,007,273 —

SRF Flexipak (South Africa) (Pty) Ltd. B 40,000,000 — — — — 40,000,000 —

Sasfin Bank Limited FI — — — 2,995,346 — 2,995,346 —

Western Platinum Ltd A — 5,011,488 — — — 5,011,488 —

Southern Africa Region Business Partners International Southern Africa SME Fund FI — 8,000,000 — — — 8,000,000 —

tanzania AFRICAN BANKING CORPORAtION tANZANIA C — — — 2,689,404 — 2,689,404 —

AccessBank tanzania Limited FI-3 — 485,258 — — — 485,258 —

Aldwych International Limited C 4,000,000 — — — — 4,000,000 —

diamond trust Bank tanzania Ltd FI-2 — — — 332,644 — 332,644 —

Exim Bank of tanzania FI — — — 2,598,857 — 2,598,857 —

FINCA tanzania Limited FI-3 3,000,000 — — — — 3,000,000 —

National Bank of Commerce (NBC) FI — 6,898,955 — — — 6,898,955 —

togo Ecobank togo C — — — 8,930,814 — 8,930,814 —

Uganda diamond trust Bank Uganda Ltd FI-2 — — — 38,875 — 38,875 —

Eaton towers Uganda Limited B 30,000,000 — — — — 30,000,000 —

Orient Bank Limited C — — — 1,753,840 — 1,753,840 —

Umeme Ltd. B — 10,000,000 — — — 10,000,000 —

Zambia AFRICAN BANKING CORPORAtION ZAMBIA C — — — 1,360,195 — 1,360,195 —

WORLd

World Region APRM-Société Général FI — — 100,000,000 — — 100,000,000 —

AllianceBernstein Next 50 Emerging Markets LLC FI-3 — 100,000,000 — — — 100,000,000 —

Altobridge Limited C — 3,125,852 — — — 3,125,852 —

Citibank, N.A. FI 270,000,000 — — — — 270,000,000 —

Columbia Sportswear Company B 3,956,744 — — — — 3,956,744 —

delta Partners Emerging Markets tMt Growth Fund II, L.P. FI-2 — 20,000,000 — — — 20,000,000 —

Global Climate Partnership Fund SA FI 30,000,000 — — — — 30,000,000 —

Global Health Investment Fund FI-2 — 10,000,000 — — — 10,000,000 —

Goodyear tire & Rubber Company B 50,513,831 — — — — 50,513,831 —

IFC Capitalization (Equity) Fund, L.P. FI — 336,277,841 — — — 336,277,841 —

IFC Capitalization (Subordinated debt) Fund, L.P. FI 33,105,829 512,241 — — — 33,618,070 —

IFC Catalyst Fund, LP FI — 876,690 — — — 876,690 —

IFC Global Infrastructure Fund L.P. FI — 1,030,773 — — — 1,030,773 —

Laureate Education Inc. B — 100,000,000 — — — 100,000,000 —

Levi Strauss & Co. B 65,664 — — — — 65,664 —

MICROENSURE HOLdING LIMItEd FI-3 862,500 1,312,500 — — — 2,175,000 —

Perry Ellis International, Inc. B 10,040,989 — — — — 10,040,989 —

Société Générale S.A. FI-2 100,000,000 — — — — 100,000,000 —

Sunpreme Co. Ltd B 3,000,000 — — — — 3,000,000 —

the Bank of tokyo-Mitsubishi UFj, Ltd. FI-2 — — — — 100,000,000 100,000,000 —

Eleni LLC FI-3 — 1,000,000 — — — 1,000,000 —


Region CountryNumber of

Enterprises IFCLoan & Guarantee

Participations Total

SuB-SAhARAN AFRICA

Angola 7 326,353.0 — 326,353.0

Benin 10 157,645.0 — 157,645.0

Botswana 6 35,451.6 — 35,451.6

Burkina Faso 15 86,750.6 — 86,750.6

Burundi 9 46,512.5 — 46,512.5

Cameroon 37 597,275.5 471,500.0 1,068,775.5

Cape Verde 6 15,901.9 — 15,901.9

Central African Republic 1 5,730.4 — 5,730.4

Chad 7 48,510.1 13,900.0 62,410.1

Congo, democratic Republic of 21 245,973.1 94,000.0 339,973.1

Congo, Republic of 7 138,442.5 25,000.0 163,442.5

Côte d’Ivoire 49 473,018.8 70,963.8 543,982.6

djibouti 1 4,000.0 — 4,000.0

Eritrea 1 949.2 — 949.2

Ethiopia 8 98,927.5 1,719.0 100,646.5

Gabon 5 145,588.0 110,000.0 255,588.0

Gambia, the 10 22,192.8 — 22,192.8

Ghana 72 1,819,705.8 432,750.0 2,252,455.8

Guinea 11 235,660.8 — 235,660.8

Guinea-Bissau 4 7,246.0 — 7,246.0

Kenya 97 1,482,458.7 86,217.1 1,568,675.8

Lesotho 2 454.0 — 454.0

Liberia 8 70,957.4 — 70,957.4

Madagascar 21 224,374.5 21,000.0 245,374.5

Malawi 20 158,109.8 9,500.0 167,609.8

Mali 23 179,233.7 40,000.0 219,233.7

Mauritania 14 269,664.4 9,502.6 279,167.0

Mauritius 17 130,794.8 96.0 130,890.8

Mozambique 27 337,103.7 — 337,103.7

Namibia 6 44,969.3 — 44,969.3

Niger 3 22,808.1 — 22,808.1

Nigeria 95 5,910,464.9 312,155.0 6,222,619.9

Rwanda 15 96,341.2 — 96,341.2

São tomé and Príncipe 1 501.1 — 501.1

Senegal 31 267,871.5 12,398.0 280,269.5

Seychelles 7 39,443.2 2,500.0 41,943.2

Sierra Leone 9 69,007.9 25,000.0 94,007.9

Somalia 2 974.6 — 974.6

South Africa 83 2,211,244.5 15,000.0 2,226,244.5

South Sudan 1 5,000.0 — 5,000.0

Sudan 6 27,267.8 6,488.8 33,756.6

Swaziland 9 47,779.5 — 47,779.5

tanzania 57 322,728.3 13,040.5 335,768.8

togo 11 190,327.4 — 190,327.4

Uganda 51 371,982.8 13,088.4 385,071.1

Zambia 37 243,785.7 20,285.8 264,071.5

Zimbabwe 51 284,261.9 99,000.0 383,261.9

Regional Investments: Sub-Saharan Africa 85 2,459,664.2 61,906.0 2,521,570.2


Cambodia 10 151,727.9 60,000.0 211,727.9

China 233 5,974,551.1 1,308,109.3 7,282,660.4

Fiji 8 47,993.2 2,500.0 50,493.2

Indonesia 118 3,142,475.8 1,768,655.4 4,911,131.1

Kiribati 1 1,798.0 — 1,798.0

Korea, Republic of 51 868,449.2 195,700.0 1,064,149.2

Investment PortfolioStatement of Cumulative Gross Commitments1 (at june 30, 2013) (US$ thousands)






Lao People’s democratic Republic 11 49,951.8 — 49,951.8

Malaysia 12 154,868.4 5,389.1 160,257.5

Mongolia 16 304,511.5 — 304,511.5

Myanmar 1 2,000.0 — 2,000.0

Papua New Guinea 10 323,894.8 — 323,894.8

Philippines 101 2,685,757.4 695,879.6 3,381,637.0

Samoa 7 20,096.6 — 20,096.6

Singapore 1 546.8 — 546.8

Solomon Islands 1 35,000.0 — 35,000.0

thailand 84 2,000,805.1 1,748,419.3 3,749,224.5

timor-Leste 1 500.0 — 500.0

tonga 1 6,787.0 — 6,787.0

Vanuatu 3 16,604.0 — 16,604.0

Vietnam 50 3,428,694.6 253,135.0 3,681,829.6

Regional Investments: East Asia and the Pacific 39 1,141,814.0 — 1,141,814.0

SOuTh ASIA

Bangladesh 36 1,607,442.1 92,745.4 1,700,187.5

Bhutan 3 43,245.9 — 43,245.9

India 365 9,540,409.0 1,648,639.8 11,189,048.8

Maldives 7 168,250.0 8,500.0 176,750.0

Nepal 18 172,888.9 36,000.0 208,888.9

Sri Lanka 39 573,143.6 23,615.6 596,759.2

Regional Investments: South Asia 9 221,570.0 — 221,570.0


Albania 19 442,129.3 9,893.0 452,022.3

Armenia 13 271,543.8 — 271,543.8

Azerbaijan 26 533,557.2 197,930.0 731,487.2

Belarus 17 420,158.5 — 420,158.5

Bosnia and Herzegovina 30 333,885.3 10,577.6 344,462.9

Bulgaria 25 674,179.3 183,646.7 857,826.0

Croatia 19 607,865.3 197,096.8 804,962.0

Czech Republic 18 455,175.9 245,587.9 700,763.8

Estonia 11 137,806.1 11,855.0 149,661.1

Georgia 21 646,286.0 11,500.0 657,786.0

Hungary 34 437,985.4 70,334.8 508,320.2

Kazakhstan 33 1,348,545.0 282,916.7 1,631,461.7

Kosovo 3 33,904.4 — 33,904.4

Kyrgyz Republic 15 102,396.2 — 102,396.2

Latvia 7 80,966.8 35,000.0 115,966.8

Lithuania 11 95,041.0 9,309.0 104,350.0

Macedonia, Former Yugoslav Republic of 15 207,445.2 25,000.0 232,445.2

Moldova 18 233,322.9 45,000.0 278,322.9

Montenegro 6 86,754.2 — 86,754.2

Poland 44 438,121.4 115,316.8 553,438.3

Romania 41 1,637,840.3 478,163.5 2,116,003.8

Russian Federation 191 8,087,572.0 2,448,372.0 10,535,944.0

Serbia 38 1,320,017.3 135,630.3 1,455,647.5

Slovak Republic 7 115,543.7 — 115,543.7

Slovenia 12 241,309.5 47,382.7 288,692.2

tajikistan 17 76,157.0 — 76,157.0

turkey 170 6,975,595.8 3,443,543.2 10,419,139.0

Ukraine 49 1,981,937.9 686,700.0 2,668,637.9

Uzbekistan 17 93,974.6 12,900.0 106,874.6

Regional Investments: Europe and Central Asia 56 2,273,450.3 200,880.0 2,474,330.3

_ 127INVEStMENt PORtFOLIO Statement of Cumulative Gross Commitments1 (at june 30, 2013) (US$ thousands)





Antigua and Barbuda 1 30,000.0 — 30,000.0

Argentina 191 4,820,481.0 3,654,163.0 8,474,644.0

Barbados 6 128,625.1 — 128,625.1

Belize 4 28,663.7 11,000.0 39,663.7

Bolivia 29 460,894.9 140,500.0 601,394.9

Brazil 244 11,978,013.0 6,037,821.8 18,015,834.8

Chile 56 1,685,509.5 1,160,604.7 2,846,114.1

Colombia 117 2,670,627.6 1,168,631.0 3,839,258.7

Costa Rica 30 463,188.6 99,708.8 562,897.5

dominica 1 700.0 — 700.0

dominican Republic 36 635,279.0 241,850.0 877,129.0

Ecuador 23 348,127.5 39,240.1 387,367.6

El Salvador 18 339,883.1 113,500.0 453,383.1

Grenada 2 8,000.0 — 8,000.0

Guatemala 26 966,587.9 210,000.0 1,176,587.9

Guyana 7 31,417.0 — 31,417.0

Haiti 11 94,664.5 25,250.0 119,914.5

Honduras 20 828,560.2 124,400.8 952,961.0

jamaica 22 426,295.6 194,244.5 620,540.1

Mexico 191 6,294,797.8 2,607,133.5 8,901,931.3

Nicaragua 21 359,942.0 12,428.6 372,370.6

Panama 27 1,554,606.0 153,300.0 1,707,906.0

Paraguay 15 721,596.3 10,000.0 731,596.3

Peru 72 2,013,978.7 923,871.2 2,937,849.9

St. Lucia 3 45,421.9 — 45,421.9

Suriname 1 3,065.9 — 3,065.9

trinidad and tobago 15 358,653.7 235,000.0 593,653.7

Uruguay 18 337,853.6 120,000.0 457,853.6

Venezuela, Republica Bolivariana de 39 897,229.5 703,791.4 1,601,021.0

Regional Investments: Latin America and the Caribbean 71 1,516,641.4 350,000.0 1,866,641.4


Afghanistan 8 220,372.8 — 220,372.8

Algeria 14 253,557.3 5,556.9 259,114.2

Bahrain 1 216,274.0 — 216,274.0

Egypt, Arab Republic of 90 2,646,568.7 789,871.3 3,436,440.0

Iran, Islamic Republic of 11 63,342.9 8,199.5 71,542.4

Iraq 7 402,025.0 50,000.0 452,025.0

jordan 45 1,109,100.5 380,384.0 1,489,484.5

Lebanon 35 2,095,376.5 230,430.0 2,325,806.5

Morocco 41 855,237.8 515,014.1 1,370,251.9

Oman 7 319,853.4 57,000.0 376,853.4

Pakistan 127 4,395,495.3 607,970.1 5,003,465.4

Saudi Arabia 8 261,286.0 — 261,286.0

Syrian Arab Republic 4 24,731.6 — 24,731.6

tunisia 29 458,686.9 417,227.8 875,914.7

United Arab Emirates 2 30,000.0 — 30,000.0

Yemen, Republic of 14 206,004.2 56,104.7 262,108.9

Regional Investments: Middle East and North Africa 39 1,592,181.2 3,000.0 1,595,181.2





WORLdWIdE

Australia 2 975.0 — 975.0

Cyprus 7 32,181.5 645.3 32,826.7

Finland 4 1,233.1 1,914.5 3,147.6

Greece 6 25,742.3 40,131.3 65,873.6

Israel 1 10,500.0 — 10,500.0

Italy 1 960.0 — 960.0

Portugal 7 51,811.1 11,000.0 62,811.1

Spain 5 19,042.5 1,685.0 20,727.5

Regional Investments: Worldwide 109 6,198,359.9 183,000.0 6,381,359.9

Other2 24 304,853.3 11,400.0 316,253.3

TOTAL 5,260 144,902,712.4 40,425,808.9 185,328,521.3

1. Commitments are composed of funds to be provided by IFC for its own account and funds to be provided by participants through the purchase of an interest in IFC’s investment.

2. Of this amount, $9.8 million ($8.4m for IFC and $1.4m for participant’s account) represents investments made at a time when the authorities on taiwan represented China in the

International Finance Corporation. the balance represents investments in West Bank and Gaza, taiwan, China, and Hong Kong SAR, China.

_ 129INVEStMENt PORtFOLIO Statement of Cumulative Gross Commitments1 (at june 30, 2013) (US$ thousands)

notes anD DeFinitions

The fiscal year at IFC runs from July 1 to June 30. Thus FY13 began on July 1, 2012, and ended on June 30, 2013.

Investment amounts are given in U.S. dollars unless otherwise specified. Rounding of numbers may cause totals to differ from the sum of individual figures in some tables.

Loan participants and IFC fully share the commercial credit risks of projects but, because IFC is the lender of record, partic-ipants receive the same tax and country risk benefits that IFC derives from its special status as a multilateral financial institution.

Quasi- equity instruments incorporate both loan and equity features, which are designed to provide varying degrees of risk/return trade- offs that lie between those of straight loan and equity investments.

On- lending is the process of lending funds from IFC’s own sources through intermediaries, such as local banks and micro-finance institutions.

The World Bank includes the International Bank of Recon-struction and Development and the International Development Association. The World Bank Group includes IBRD, IDA, IFC, the Multilateral Investment Guarantee Agency, and the International Centre for Settlement of Investment Disputes.


Annual Report 2013

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