FTS-DOC-ITA
Moderator: Linda Abbruzzese
October 17, 2007
1:00 pm CT
Coordinator: Welcome and thank you for standing by.
At this time all participants are in a listen only mode.
During the question and answer session you may press star 1 on your touchtone phone to ask a question.
Today’s conference is being recorded. If you have any objections you may disconnect at this time.
And now I’d like to turn the meeting over to Ms. Linda Abbruzzese, International Trade Specialist. Ma’am you may begin.
Linda Abbruzzese: Thank you. Good afternoon for those of you joining on the East Coast and good morning for those of you joining us on the West Coast.
Thank you for joining us for our webinar on the World Bank.
I’m pleased to note that we have more than 80 people registered for the webinar today.
I’m Linda Abbruzzese, International Trade Specialist for the Marketing Communications Office for the U.S. Commercial Service at Department of Commerce.
This webinar is being brought to you in cooperation with the U.S. and Foreign Commercial Service in Advocacy Center’s office at the World Bank.
I’d like to welcome the U.S. and Foreign Commercial Service clients as well as other participants joining us from all across the USA to learn about the procurement opportunities and the international financing available to you as companies through the World Bank Group.
In a moment I’ll turn the presentation over to William Center, the Senior Commercial Officer, and Brian Lott, U.S. Business Liaison located in the office of the U.S. Executive Director at the World Bank.
William and Brian will be the main speakers of today’s webinar. Both speakers will be available at the end of the presentation to answer your specific questions.
Contact information will also be provided at the end of the presentation.
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Now because of the large number of participants online more than 59, it will not be logistically feasible to take voice questions.
However we invite you to send in your questions as they occur to you during the presentation.
There is a box at the bottom of the screen on which you can click and type in your questions at any time during the presentation.
We will compile the questions and present as many as time allows after the presentation.
(For) questions which are not answered during the webinar due to time constraints will receive personal answers via email after the webinar.
In addition all listeners will be provided with information for any individual follow-up counseling needed to pursue World Bank finance project opportunities.
Now for those of you who just joined us and logged in you can still join in our Internet conference.
Now I’d like to introduce live on line from the World Bank in Washington, D.C. Senior Commercial Officer William Center.
William thanks for joining us.
William Center: My pleasure Linda and thank you for all your hard work in organizing this webinar. It’s my first and hopefully the beginning of many webinars in the future.
And I’m very encouraged by the number of people who signed up for this event. It’s very consistent with what I know to be a high level of interest in bank finance projects around the world and how you as companies can take advantage of them.
What we – what Brian and I want to do today is go through a PowerPoint presentation and we’re going to do it rather fast because I understand you will have – you will be able to access this PowerPoint after the webinar is concluded.
So we won’t dwell on each slide. We’ll move quickly. I will take the first half and then Brian will take the second half.
We do think that the value of this event is going to be in your – in the question and answer period.
So we’re going to try our best to go – finish our presentation at about 35 minutes after the hour and leave 25 minutes for questions.
If the questions are – if we’ve answered all the questions there are – there’s additional material that we can discuss orally with the time that’s left to us.
So with that I think it’s first important to explain where Brian and I fit in the Commerce Department structure.
We are in the Office of Multilateral Development Banks which is part of the Advocacy Center. The – this particular branch of the International Trade Administration of the U.S. and Foreign Commercial Service was created by statute in ’88 when Congress who’s been donating billions of dollars every three years to the World Bank and other institutions decided they needed to do more to help U.S. companies get some business back.
So we were there. We’ve been there for – by statute in order to find procurement opportunities for U.S. companies. We are represented in the World Bank and the Inter-American Development Bank in Washington, D.C. and we’re also in Manila a the Asian Development Bank, in London at the European Bank of Reconstruction and Development and in Tunis at the African Development Bank.
These are pretty precious assets if I do say so myself. I mean these are boots on the ground, people who can take your specific inquiries through the halls of the Asian Development Bank for example which is several times (on its way).
So I encourage you to take note of these resources and use the contact information at the end of this presentation to follow-up with us and see how we can help each of you individually.
So going forward I think it takes – it’s worthwhile just saying a few things about the – what the World Bank is. Some of you I’ve noticed – I’ve seen a list of the participants on this call and many of you know the bank very, very well. I would also imagine that some of you are only – only have some surface knowledge of it.
So I’ll try to give you a little bit of an introduction now and there’s a slide in our presentation that will also touch upon the background of the bank and I’ll probably return to some of this in a little while.
But just – the easiest way for me to make this relevant to those of you who are participating today, we are the largest development institution in the world. It is in the United States, you Americans take advantage of it.
The Europeans are all over it. They win eight times as much procurement as we do. They have 30 embassies here who have permanent staff assigned to working the World Bank and Inter-American Development Bank and they also take full advantage of the private sector financing options at the International Finance Corporation.
We are relevant because the emerging markets that the bank does its work in are growing twice as fast as develop markets. The paradigm is different. It’s not the booming (buzz) cycles that we’ve seen in the past. We are really experiencing (new catch phrase) now is inclusive globalization where countries around the world are beginning to develop the infrastructure and are beginning to take advantage of a growing network of free trade agreements, etcetera, to put more products into the global marketplace.
So the bank is relevant because it knows these markets better than any institution in the world.
So with that I’d like to start the presentation. And I got a couple slides here to talk about what I just mentioned.
This is basically a fact now. Most of the population is in these - are in these emerging economies. They’ve got most of the reserves there and they have huge needs particularly in infrastructure and the World Bank and other institutions is trying to meet those needs.
This is what I mentioned before about growth rate. There is – these growth rates are expected to maintain these levels for the next few years at least.
I think this slide most of us have heard about China but there are other economies that also have very healthy reserves.
This is just (car ownership) showing the rise in consumption patterns in emerging markets.
And the point of this slide is that if you take China and India out of the equation you’re still looking at some significant growth. And the curve it’s not as cyclical as it’s been in the past.
Just on India it was the biggest borrower last year. They borrowed $3.8 billion from the bank. And all that money if your business is involved in following the money trail, you know, that’s quite a lot of money to follow, quite a lot of projects to follow as well.
So let me continue.
This slide sort of lays out who the World Bank is. It’s there are actually five units here. The easiest way to divide the – to understand the bank is that it does a lot of public sector lending to governments and a lot of private sector lending and it’s the private sector that’s growing the quickest.
But still the overall volume is more in sovereign lending to governments where the bank loaned 24 billion last year.
There was sort of a combination about 8 billion between grants, guaranties, equity, debt transactions over the IFC.
And the (MIGA) is essentially the World Bank’s version of OPEC in providing political risk insurance.
I think I’ll mention here and this may come up and Brian and I may end up repeating this point more than once. The U.S. is the largest shareholder in these institutions.
And that helps us for when our companies want to engage the bank, the bank staff has to be sensitive to that point.
But what’s interesting about the services of the World Bank Group in terms of feasibility study, grant money or trade finance or procurement or risk insurance and so forth is because it’s a multilateral institution it’s not bound by domestic content regulations which some of our, you know, Exen Bank and OPEC and others are bound somewhat by those types of rules.
So if you’re in the IT business for example and you come to Exen Bank for financing and they’re going to want to see your 51%, the multilateral institutions are not governed by the same sort of rules.
The other thing about this particular group which is important is that they have thousands of staff overseas in over a hundred countries.
And these are countries where the commercial service is not represented. These are the fast growing countries like Angola or in Indonesia. Well we are in Indonesia but I mean the bank is a much larger presence.
And Exen Bank, OPEC and TDA among them have I believe two people overseas and just in one organization, the International Finance Corporation, they’ve got I think about 1,300 people now overseas.
So there’s a tremendous advantage of having people on the ground looking for deals, looking for structuring deals so that the contours are known early and supplier networks are alerted early and, you know, one of my major points that is that these institutions have remarkable insight into what’s happening and to developing – helping countries.
This is – I think I covered some of this. There is one - on the second part of this slide there is one thing I have overlooked and that is the bank itself as a customer of or consumer of U.S. goods and services. It’s pretty substantial. They procure about $800 million worth of consulting services and which makes the bank one of the most sought after clients for international consultants.
The consulting business in general is a real opportunity here insofar that a lot of the bank staff have trained in U.S. universities and there’s a good appreciation for the quality of U.S. service providers.
I think that’s a pretty significant. We’re in the same time zone. We respond quickly.
And as a result U.S. consultants win more World Bank contracts than anyone else.
I think the next slide is significant and I’m going to toggle over to the Internet here for a second to show where to find some of these documents.
This is the World Bank’s external web site. They spend about $20 million a year keeping it up-to-date. Great resource but of course when you come to it you say well what - you know, where’s the business.
Well if you scroll down there is a link to resources for business.
But I’m going to let each of you explore that on your own. I’m going to go to the top bar and click on publications.
And I’m going to click on the second item down, documents and reports and for a particular document type.
And I’m not sure. We haven’t done a dry run on this. I’m not so sure I’m going to go much further into the documents.
But what I want to point out is that if you scroll down there’s something here called the procurement plan and it is a requirement of all World Bank finance projects that when a loan is approved at the Board level there has to be in place a 15 month procurement plan which is updated as they go forward.
It’s not perfect. There all – you know, sometimes there are delays and sometimes the format is different from loan to loan.
But in general it’s a very transparent process and if you have – if you’re just trying to get a feel for how the bank operates this is a great resource.
I’ll also point out there’s a country assistance strategy document which is up here under country focus.
That is an unusual document in that it is actually a negotiated instrument, well document. I shouldn’t call it an instrument. That includes and in addition to laying out the development priorities for each country, it includes a three year lending portfolio.
So as these things come out and I guess they sort of kind of – they do about I’m guessing 15 to 20 of these a year and it’s a constant rolling process.
As they come off the press and you go to that lending portfolio image you can start looking three years out about what is – they’re going to – they plan to borrow 200 million in education or, you know, 400 million in water supply and starting to figure out whether it’s time to start developing contacts in that particular market.
Okay. Okay, I’m going to try to speed this up a little bit so that we give time for Brian to talk about the IFC.
And again, you know, we’ll be very happy to meet and follow-up with any of you for – you know, after this webinar has concluded.
This is a procurement cycle. Just basically there’s just a ton of consulting opportunities at every stage of this cycle. I caution however that it’s – you know, we are an international institution and it’s staffed with a lot of international bureaucrats and it’s not the quickest cycle. I would say this can be frustrating if you chase an opportunity and it takes, you know, 15 months for it to be concluded.
This is more of the same of what I was – what I’ve been talking about. I think the relevant information on this slide is on the right hand side in terms of sources of information.
And I’ll just – some of the acronym like ESW is economic sector work. These are all analytical reports. It could be very useful. The poverty reduction strategy paper or country assistance strategy, monthly operational summaries, project information documents, this is – these resources are all on the web.
And Brian and I will be happy to show people how to navigate the web site if you’re trying to find out more information about not only what is being planned but who’s on the team that’s planning it.
There’s a – this is just a slide about I guess it really just reflects that the bank employs different selection methods for different type of consulting assignments. This really is more aimed at not the consulting that they use to prepare the projects but the consulting that is used to actually implement the projects which are usually more lucrative assignments.
I will say that there’s been a lot of debate about the selection methods. There’s been – we’re pushing back from our side on the preponderance of using cost as a standard.
But I guess the real message I’d like to leave with you on this slide is that people like World Bank projects because there is a process that one can at least understand and if you’re going into Zambia or you’re not so sure about the government in Argentina these days, at least there’s an international institution that can insist that the buyer or the borrower follow certain rules.
This is sort of common sense but it’s more along the lines of what I just said. I do think that, you know, if you’re interested in project preparation there’s a few tips we can provide. The bank is a fairly academic institution, not overly friendly to the private sector. One has to approach it in terms of outcomes, development outcomes. That’s what pricks up their ears is they’re not really interested in win-win solutions or saving anyone money. You know, they’re quite happy spending other people’s money.
But what happens overseas is really your success rate is going to depend and go in direct correlation to how strong your own international networks are.
And the commercial service has a – some very good programs to help you identify people who could represent your interest overseas. That’s I think something to take advantage of.
This is just a slide on who’s doing most of the borrowing within China and India. Some of those (borrowers), Brazil is a big borrower.
And, you know, a couple surprises like Ethiopia. Vietnam’s coming up fast, a lot of borrowing.
And these countries like to borrow from the World Bank even though there’s a lot of cheap credit on the market these days. They find that the bank – because they – each of these countries is represented on the Bank’s Board that there’s a certain sort of – certain amount of control they can have over how the bank implements its projects.
But I guess more importantly the bank is known for its safeguards and its best practices. It’s ponderous, it’s expensive.
But in the end the governments feel that they can understand the bank and have a measure of control whereas if they just pick commercial lending they’re often left to their own devices.
This slide is just the only point I wanted to make on this slide, it was from another presentation, was that there’s a ton of money coming into these markets on the private side.
But if you look at the lower right hand corner, you know, the private sector likes to finance telecom projects. You know, they’ll do some energy but they don’t like water.
And this is where institutions like the World Bank are more active and other multilateral lenders, etcetera.
Okay, so that is the procurement piece.
And I’m now going to turn the phone over to Brian Lott who’s going to touch base on the International Finance Corporation.
Brian Lott: Thank you (Will). Before we get into International Finance Corporation I just wanted to elaborate a little bit on what (Will) was describing as our operations.
He did describe that each of the commercial offices at the MDBs that we do have counterparts at each of the MDBs, multilateral development banks.
And each of these offices is attached to the U.S. Executive Director’s office.
And unlike an embassy overseas these offices are represented by or appointed, overseen by the U.S. Treasury Department.
And so the U.S. Executive Director of the World Bank has the overall responsibility of governance. He sits on the Board. He approves loans and crucial policy decisions that govern really the fiduciary and governance of the bank and kind of oversees that process.
And so we are attached to his office and we are a part of his office and so we are a part of the governing structure of the bank and it’s really a privileged position where we can see quite a bit of information, a rich flow of information that’s coming through the bank about the bank’s lending patterns and projects that – to bring into the Board for approval.
With that said we are kind of duck tailing now into a different part of the presentation.
I think (Will) has elaborate primarily on the sovereign lending side of the World Bank where the bank lends money directly to sovereign entities, sovereign governments who then carry out projects according to certain lending agreements or loan agreements where now we would be derelict in our duties if we didn’t also touch upon the International Finance Corporation and the Multilateral Investment Guaranty Agency which are both entities of the World Bank, agencies of the World Bank which provide financial assistance to private entities in these markets, in these emerging markets.
As you can see from – so really this slide is just kind of the segue into a different part of the presentation.
This particular slide kind of – this slide right here really elaborates on the increasing demand in emerging markets and developing countries for private sector finance. There is - generally governments are getting out of financing what has perhaps been a government rule in the past and they’re looking at public private partnerships for infrastructure and looking for the private sector to come in and perhaps run a railway or operate a railway or looking at independent power producers to provide power or even distribute and transmit power.
So this is showing where as this liberalization, this privatization of what has been traditionally government rules has been - now taken on more and more by private entities. These entities need financing and there are multilateral international finance entities, institutions that are coming in and trying to fill this gap.
And as you can see in the lower right hand corner that the IFC which is the – that maroon there at the bottom is one of the largest sources of private sector finance in emerging markets, in fact this is what this slide here really hits home.
The IFC is the largest multilateral source of debt and equity financing for private enterprise.
And in last year alone they did $8.2 billion worth of commitments and debt equity. And they do loan syndications. Obviously that’s not on their own account.
They can also provide a number of financing instruments to mitigate risk and address currency mismatch and currency swaps and the interest rate swaps.
We’re not going to elaborate too much on the risk mitigation aspects in this particular presentation. Looking at the list of participants I think most of you are probably interested in the procurement through the sovereign lending side.
But one thing that the International Finance Corporation does have and I’ll get to this slide in just a moment is trade finance program which I think would be relevant for many of you.
So this particular slide kind of talks about the Multilateral Investment Guaranty Agency and the International Finance Corporation, as I mentioned both private financing arms of the World Bank.
Unlike the World Bank as (Will) kind of talked about those are the traditional banks or traditional agencies within the bank, they have callable capital where their shareholders which are governments all around the world have pledged that in the event of some kind of financial insolvency or bankruptcy that they will bail out the World Bank.
So that’s a tremendous indemnity or resource for the bank and that may – that ensures while U.S. Executive Director and other Directors on the Board ensure that the bank is governed so that never takes place it helps ensure that the bank itself maintains a AAA institution. That differs from these private entities in the World Bank Group. They don’t have callable capital.
So they have to make sure that their exposure in these markets is limited and still meets rating agencies demands in terms of their audits and ensuring that the exposure that they have will not impinge on their rating.
And so when you see a AAA rated institution, it truly is like a real bank where they have to, you know, watch their lending.
With that said it is also charged with a development aspect and so it has to be – look for opportunities where it can provide access to capital, where it’s not competing with the private sector.
And that is a typical (unintelligible) International Finance Corporation is that it competes with the private sector, you know, investment banks and the like.
And so they have to make sure that they’re bringing it - the (key buzz word) with the International Finance Corporation and with MIGA is additionality to their deals where they can add some value both in name or where otherwise a commercial entity would not be able to provide that value.
So moving on, we’re talking about the International Finance Corporation here. It provides loans, equity, quasi-equity. It can do – it’s B Loan Program is loan syndications where it will provide on it’s own account a loan at maybe 15 million but it will also underwrite a much larger loan for maybe 150 million which you’ll then resell to other participating banks.
Risk management products, those are what I mentioned in terms of risk mitigation insurance. That goes along with the guaranties and partial credit guaranties.
The technical assistance and advisory services as well is another area where the bank can provide or excuse me the International Finance Corporation can provide value to governments where they’re trying to structure perhaps a privatization or looking at some type of public private partnership arrangement.
And this is additional value. This is where I was talking about additionality. I think (Will) really kind of covered this already. The IFC has 1,200 people in the market or in these countries.
And these investment officers are looking for deals with their specific mandate and they’re looking in frontier regions where they can provide the greatest value. In frontier regions there’s less access to capital and so they’re looking to fulfill some type of gap and they can do it in fairly innovative ways.
IFC presence sometimes brings comfort to investors and partners and governments and lenders. And so it tends to have a halo effect that can really improve the situation.
I’ll try to speed it up here so that we can move onto Q&As.
I think here it’s kind of talking about, you know, commitments, 8.2 billion last year alone. And this is regions.
I think it’s important to point out that the 22% for Europe and Central Asia was dominated by Russia.
Moving on, it’s also the industry. I think the (Lotus upper-end dive) by the International Finance Corporation as you see here, financial markets is 41%. They’ll go in and take an equity stake in a bank and improve it’s operations and then use that bank as a window into the market and into the clientele of that bank in a given country.
I’m going to leave these charts here which really talk about the trade finance program.
And you can kind of go over some of the specifics and comparison shop if you’re interested.
I think the point I want to make is that the bank has what’s called the global trade finance program.
So if you’re doing trade deals in a given country and your bank is a little nervous about taking on that risk or that exposure in that given country, you can make them either aware and have them sign up to the global trade finance program as a confirming bank or you can go to one of the banks in the global trade finance program’s – in the program.
And you can ask them to confirm an LC from an in country bank and where the International Finance Corporation comes in is they will provide a guaranty against that confirmation. It allows the confirming bank here in the U.S. to take a AAA rated IFC risk profile of the IFC on their balance sheet instead of the risk profile of that bank in that given country.
Now where the risk profile is going to be a bit – much bigger stretch and perhaps beyond the appetite of your U.S. bank, perhaps we can elaborate a little bit more on that in the Q&A.
But I think it’s important to note that they cover all forms of trade finance. It’s a very agile and accommodating program. Works very quickly and has market based rates for their fees. Pretty much the guaranty access standby LC covers 100% country and commercial risk.
What they don’t cover is the performance risk of the buyer and the given country. That is up to the issuing bank in that country.
But the program is very enticing for U.S. exporters. They’re looking to penetrate markets where their banks are generally adverse or perhaps fidgety and nervous about entering into.
I’m going to speed through some of these. You can see the issuing bank network here in some of the countries where the network is already active and they have issuing banks in the network already.
Now we’re getting into IFC’s risk mitigation instruments and currency mismatch instruments and whatnot.
And I think that’s probably not tailored well for this audience and we’re also running against some time constraints here. I guess what I – the point to be made about risk mitigation instruments is if you’re somewhat of a large company and you’re looking to mitigate some of your risk the IFC can enter into some kind of risk sharing facility where they can provide credit through this risk (main) sharing or they can improve your appetite for risk to sell – to lend to you the buyers in these developing countries.
So I think with that I think we’re going to try to wrap it up and open it up to Q&A, so Linda.
Linda Abbruzzese: Thank you Brian and thank you William.
Now we’ll have a sampling of more than ten questions submitted by our participants.
Now for those of you who have questions we are not able to get to you during this presentation, if you left your email address when you registered you can expect a replay via email from one of our speakers.
Also we will have archive tape version of this webinar and we will have PowerPoint slides available as well as a transcript and they will be available hopefully in a couple weeks on the Commercial Service web site, www.export.gov under the link view webinars.
Okay great. It looks like we have our first question here from (Kwame Bonnie).
He would like to know how will a startup company like mine with extensive field experience in Ghana, Nigeria who intend to perform operational service work to a team recognition and help.
Hello?
William Center: Yeah, trying to wrap our minds around the question.
Linda Abbruzzese: Okay.
William Center: Well I think – I’m going to take a leap of faith here and say that (Kwame)’s has good networks in Ghana.
You know, obviously – well all of the sovereign lending programs are predicated on open public competition rules.
So to the extent so that you can reduce your cost structure by using local talent that will, you know, obviously improve your chances. Also I would say that the World Bank’s funds, you know, the governments borrow them.
So Ghana, the Ghanaian government wants to have a bigger say on how much of the funds stay in Ghana.
So I think that is, you know, if you have – I said this before and I’ll just use this occasion to repeat it, the strength of your international network overseas is going to really be the main difference in how successful you are in pursuing these opportunities.
Now I’ll just – I know there are other questions so I’ll just say this quickly. There’s a ton of information available on the web so if you just - you know, what we often say is hire a grad student here in the United States and have them pour over all the available information on Ghana and give them the parameters that interest your particular business.
And then take a look at that and divide your short list and come with a strategy that way.
Linda Abbruzzese: Great, thank you William. I have a question here from (Jesse Pennington).
He would like to know as a supplier of raw materials is there a potential interest by the World Bank Group or is the focus on finished products only.
William Center: Well I think, you know, it depends on what we’re talking about. I don’t think there’s a limitation. The bank doesn’t have a limitation like that.
So if a particular lending program is – requires the importation of raw materials then the bank will finance it.
It comes down again, the bank talks to the government and says, what are your development goals? Let’s agree on them. What do you want to – let’s sculpture a program so you’ll follow best international practices and you get the desired development outcomes. Now here’s the money. Let’s borrow it. And if it involves importing raw materials then that’s just the way it is.
Linda Abbruzzese: Okay, thank you William. I have a question here from (Dan Fife).
He would like to know can – for example the National Police Department request a loan from the World Bank for speeding enforcement appointments or can you give some examples of how they do requests for the – and do the borrowing.
William Center: Right, okay, good question. The World Bank does not lend money to projects involving the defense industry, police forces or any of the traditional vice areas I guess. We would- you know, tobacco, cigarettes and that sort of thing.
Linda Abbruzzese: Okay thank you. (Eric Braunward) has a question. He says that he is involved in a small scale like gem stone mining in Africa and with Afghanistan and Pakistan. In all projects he includes – they include hospital and health support, education, school building.
And he would like to know that when they financially support these related development projects (to mining).
How does the World Bank have any way to support them?
William Center: Well there’s – the World Bank led an effort along with the British Aid Agency known as the Extractive Industries Review.
And that was – what (Eric) is talking about is right up the alley of the World Bank institution which is promoting good development of mining projects so that there’s good – so that the populations that are impacted by mine development are taken care of.
So I think that a lot of the expensive capital intensive projects, the key is to be involved in the dialogue early when the projects are being designed and that is really sort of the focus of maybe looking at the country assistance strategy document or, you know, obviously our office can introduce you to the names of people who are working in these areas.
Just as a caution though that (Eric)’s interests seem to be right on the money in terms of development but these people are notorious for not responding to business overtures.
So you have to speak about development outcomes. And it sounds like he’s got that figured out.
Linda Abbruzzese: Great, thank you. Well there’s another question here from (Laura Klenke).
She would like to know does a company have to be in a “Approved World Bank Vendor” before they can bid on a project.
William Center: No, they don’t have to be an approved – there is no approved list. There is a constant push to be more transparent; the consulting selections now are getting – are becoming online.
Well but the bank does keep a negative list of companies who have – who they sanction. They have their own Sanction Board. And so that’s the only list that they really keep track of.
Linda Abbruzzese: Okay, great. And just to let everyone know if you still have questions please let us know and type them in and we have a lot of time to answer them so thank you.
(Rock Lindsay) would like to know that how can he identify the internal World Bank staff member’s design to help assist with specific market sectors for example the medical equipment supplies, business opportunities, etcetera.
William Center: On the web site there is – there are three documents that are relevant. One would be the project information document which is an early feasibility report that describes the outline of the project and there is contact information in that document both for the World Bank person and the local government entity that is in charge of the project. It will also list how much the World Bank is financing and how much local governments are borrowing from their own resources, etcetera.
There is also another document. Once they’ve gone beyond the pre-feasibility and they’re ready to take – bring a large loan to the World Bank Board, there’s a project appraisal document. This is a much larger document usually around a hundred pages long and it includes – there are lots of names of people who are associated with that project in the document.
I’m not sure if that one contains the phone numbers. I know the earlier one does.
But in general all World Bank email addresses, you know, the first initial of the first name, the last name at worldbank.org.
There’s also you can keep track of projects with the monthly operational summary and I’m reasonably certain that it also contains contact information usually of the local government office that is or the project implementation unit that is actually running the project.
So the information is available. Our office comes into play when you’re not getting any response from these guys. And then they tend to have to pay attention when we take an interest.
Linda Abbruzzese: Okay, great. I have a question here from it looks like (M. Burk).
As you are attached to the Executive Director’s office, can they help advocate for the selection of a U.S. company for a World Bank funded project or help resolve a nonpayment issue?
William Center: Well that’s a very good question Mr. (Burk).
And I think the question on nonpayment is certainly something we do and what we – but the underlying question is about advocacy.
And if it’s a World Bank project there really is not a lot of scope for advocacy per say because the rules are supposed to be open and transparent to everybody and the Evaluation Committee will select the lowest evaluated bid.
However in practice there is a lot of advocacy when there are doubts about how well that particular process is being run and we get involved frequently as a part of the Advocacy Team in the World Bank to call on banks to have to make sure that the rules are being followed.
Linda Abbruzzese: Great, thank you. (Justin Know).
I would like to know is there a method by which one may sign up for a supplier for World Bank programs similar to UNDP and how does one get notified for procurements in one’s own market sector.
William Center: There is – the UNDP is a – there’s a requirement for the World Bank to have it’s procurements that are larger than $50,000 I believe posted on United Nations Development Business portal.
There’s also another portal known as Development Gateway and I guess it’s actual name is DG Market.
These are – these two portals are – it’s compulsory for World Bank (obviously) on these two portals.
There are a fair number of private companies in Washington, D.C. in particular and I suppose elsewhere that track World Bank procurements.
But they do it more on a retainer basis.
Linda Abbruzzese: Okay. (Justin Know) also asked another question.
He says where can firms get more information on how to utilize IFC for risk mitigation international deals?
William Center: Well that’s Brian. You get to answer this one.
Brian Lott: I’m sorry. Linda, would you mind repeating that?
Linda Abbruzzese: Sure, no problem.
Where can firms get more information on how to utilize IFC for risk mitigation in international deals?
Brian Lott: Well I think that’s a very good question. And I think that’s one area that Will and I can specifically help you address.
Now if you go to the IFC web site it’s not actually all that user friendly and helpful in trying to figure out how the IFC works and where you need to go to engage with IFC to help originate a deal.
What I’m learning is IFC typically tries to originate deals in country and that’s why they’re pushing a lot of their investment officers overseas to look for deals.
And so if you have a particular deal where you’re looking for risk mitigation instruments to be utilized and you’d like to invite the IFC in, we can help you here in Washington but you can also approach the country office where the IFC has a presence.
Many of the risk mitigation instruments that the IFC are going to use while they have a broad overarching name and/or function many of them are customized for the specific deals.
So it’s – if you want specific information you’re going to have to talk to the investment officer with the IFC.
Linda Abbruzzese: Great.
Brian Lott: Linda.
Linda Abbruzzese: Thank you Brian. I have a question here from (Jean Claudebret).
How can I get consultant, excuse me. This person (Mayer Kahn) has a question.
He says he is a consulting firm.
And how does he become a representative for World Bank to cover some of these projects I guess in Pakistan or how does that work?
Brian Lott: Okay (Will) I’m going to turn this over to you.
Linda Abbruzzese: Hi William. Would you like me to repeat the question?
William Center: No, I think I got it. It’s about consulting in Pakistan.
The first question is whether it’s for the project preparation or for actual implementation.
And the implementation side would be governed by specific consulting guidelines where the bank is obliged to produce a short list of six companies, no more than two from one country. They try to get a local consultant involved as well.
And the process depending on the assignment can – you know, is – will use different types of standards and so forth.
But the key if it’s engineering or anything is to be sure you have some local representation.
In terms of project – doing some consulting work here in Washington, D.C. it’s just it’s no different than any other business. It’s contact work. You got to meet the people usually and just, you know, we can provide lots of contact points.
But ultimately it’s going to come down to finding somebody whose – who you can develop as a personal contact.
Linda Abbruzzese: Thank you William. (Dale Yeager) has a question.
Do these programs from the World Bank Group apply to service firms? We are a security consulting firm.
William Center: You know the only security work that I can think of off of the top of my head would be involved in the bank taking care of it’s own staff. Iraq comes to mind.
And, you know, they are in that respect this would be corporate procurement which is governed by a whole different team.
But there could be, you know, it’s worth an inquiry to find out how they are – you know, what plans they have to provide for security for the growing number of World Bank staff who are being decentralized I should say. I mean they’re trying to get more people to leave Washington and serve overseas.
Linda Abbruzzese: Okay great. (Julie Yu) has a question.
She would like to know what is the application process if we have an export project in China where we export equipment, do we just contact the bank to see if we can obtain financing or do we go to our main commercial bank and then have them contact the World Bank or the IFC?
William Center: That answer is the latter.
This is the trade finance program is a bank-to-bank business. It is not something that – they’re not in the business of helping individual companies acquire financing.
They’re in the business of identifying Chinese banks that might participate in their own trade finance guaranty program and then if the application comes from a U.S. bank that’s, you know, confirming bank in that network then that’s how they would obtain the guaranty.
Linda Abbruzzese: Great, thank you. Another question here I have. This one is from (Bill Savage).
He would like to know for the oil and gas development projects are they still being funded by the World Bank Group today.
William Center: Yes most definitely. Oil and gas is still a major sector. All of the infrastructure elements and energy elements are getting a lot of attention. They’re growing double digits over here.
And as one person was talking about gems, the bank and others even the bilateral donors are trying to apply, you know, effective pressure on governments who are developing their energy resources to do so in a transparent way with the minimal damage to the environment.
And that’s basically what the bank represents. It’s not a commercial bank. You know, it’s not trying to compete with commercial banks.
It’s trying to appeal to enlightened government officials to do things the appropriate way.
Linda Abbruzzese: Okay, great. We’ll ask a couple more questions before the end of the hour here.
William Center: I might want to just tag onto that last one to mention that the bank is a convening body is very important on regional cross border issues.
So pipelines across countries the bank is a very useful institution to convene people that who are representing different national governments.
Linda Abbruzzese: Okay, thank you. I have (Ravish Luther) who would like to know can the foreign company be a private company to be eligible for loans that will do the manufacturing.
William Center: Can a foreign company be a private company to be eligible for loans that will do the manufacturing.
Linda Abbruzzese: Yeah, that is the question.
William Center: Well if they – yes they can, absolutely with the International Finance Corporation.
And in fact that’s the – IFC is now moving away from project finance and moving much towards corporate finance and they’re specifically trying to target foreign groups in these markets who - and trying to pick the ones that they feel have the potential of growing and in the process of growing will provide good jobs for more poor people and will follow good corporate governance.
Linda Abbruzzese: Okay, good. Thank you. (George Guthrie) has a question.
This company needs information on financing for an existing organic coffee mill.
Where is the resources or where are the resources to help this company?
William Center: There’s something called the sustainable supply chain initiative out of the IFC I believe. Brian, do you want to take this?
Brian Lott: I believe the question is from (George) and it says we need info on financing an existing fair trade organic coffee mill in Aceh Province in Sumatra.
And this is actually a very topical issue that you bring up. The IFC has a unit called the sustainability network.
And they’re looking at how can they improve commodity flows.
And so a number of U.S. corporates and healthy number of foreign corporates engaged this unit to talk about setting up some kind of investment structure or some kind of risk sharing structure where they can lend to, I mean just like in this instance, coffee growers in Indonesia.
And they are setting up a certification process. Obviously, you know, whether you’re talking about cotton or coffee or you’re talking about some other commodities, there’s a certification especially when you’re talking about agriculture there’s a certification process that needs to be adhered to so that buyers can know that that product when it’s being bought has met the certain standards.
And so this sustainability network within the IFC also looks at a number of other issues that the U.S. corporates are particularly interested, you know, for publicity reasons in terms of labor making sure that the labor that is utilized is trying to raise the standards of the labor treatment among coffee growers for instance or cotton pickers.
And so it’s a number of different areas where the IFC has done some best practices and is willing to enter into some kind of risk sharing facility to onward land usually with the corporate entity providing kind of an off take guaranty that whatever is produced by those growers or harvesters will be purchased.
So I hope that answers your question. Perhaps if you want to contact me I can provide more information and some contact people, names and phone numbers over at the IFC.
Linda Abbruzzese: Thank you Brian. I have a question from (Yolanda Littleton).
We would like to know is the World Bank Private Investment Division financing media companies. Is this a sector World Bank is interested in investing?
Brian Lott: Media companies. I’m not aware that the IFC is involved with any media companies.
Are you aware of any media companies?
No, we’re not aware that the IFC is interested in media companies. I think the development impact of that would be questioned at the Board level.
And so it’d be very hard for a development institution to justify lending to a media institution.
Perhaps the argument could be made that there’s vast employment to be garnered through that in country.
But I’m not aware that that is of interest to the IFC or that there have been any investments or debt provided to media companies. Perhaps there are. I’m just not aware of it.
Linda Abbruzzese: Okay, great; thank you Brian.
Another question here by (Julie Yu) she’s like – she asked what would a typical interest rate be for the World Bank?
Brian Lott: Typical interest rate. I think I’m looking at the wrong question.
Linda Abbruzzese: (Julie Yu), another question she’s asked.
Brian Lott: Did she have more than one?
Linda Abbruzzese: Yeah, she’s asking one more question.
Brian Lott: Okay, well…
((Crosstalk))
Linda Abbruzzese: Or are there – or how do the interest rates vary from the World Bank Group?
Brian Lott: I think (Will) could probably answer that a little bit better.
And I’ll repeat it for him but as far as I’m aware, you know, when you’re talking about the International Bank for Reconstruction and Development which is the bank itself most of their lending is based on market rates.
Now they have longer maturities on their – the loans that they provide to their sovereign borrowers.
When you talk about IDA, the International Development Association, which is another part of the bank, the IDA actually provides loans to the poorest, lowest income countries in the world.
And that is typically concessionary financing, below market rate, you know, with the portion that’s below considered a grant.
And it also has extremely long maturities so it’s a way to give a helping hand to these lower income countries that can’t afford – they need to carry out projects in their countries to build out their infrastructure or spur economic development in their countries but don’t have the financial wherewithal or capabilities to repay market based loans.
(Will)?
Yeah, (Will) was satisfied with that answer.
Linda Abbruzzese: Okay, great. And we’ll have our last question. This is from (Mark Deboy).
This person would like to know can a foreign firm investor get a loan to finance the infrastructure portion of a huge coastal community real estate development project say in Mexico?
Brian Lott: Certainly a foreign firm or a U.S. firm, U.S. investor or a foreign investor can approach the IFC about trying to get some kind of partial credit guaranties for major infrastructure projects in a given country.
So yes, the answer to that is yes.
But of course we like to promote U.S. investors and U.S. companies approaching the IFC.
Linda Abbruzzese: Great, thank you very much Brian.
Everyone I’m afraid that is all the time we have.
And remember for those of you who’s questions we didn’t answer you can expect a replay via email from one of our speakers shortly.
For questions that occur to you after this webinar please make a note of the contact information that you see on your screen. You can contact either one of these speakers at any time.
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You can look at all these web sites for more information also and upcoming webinars.
I’d like to thank everybody for joining us and please check your emails for more information on upcoming webinars.
Thank you everybody and goodbye.
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