World Bank looks to raise $500mln fund for Mideast region

The World Bank is hoping to raise a $500 million fund to invest in the Middle East and North Africa, saying the region’s needs in the wake of the Arab Spring uprisings are more than it can manage itself.

International Finance Corp., a unit of the World Bank, is setting up the fund in addition to the $2.2 billion to $2.4 billion it expects to invest in the region over the next year, aiming to take advantage of a surge in investment opportunities since the Arab Spring, its regional director said Monday.

“We’ve invested $2.4 billion in the past 12 months in MENA countries and expect to do the same range next year,” Mouayed Makhlouf, regional director for IFC in the Middle East and North Africa, told Reuters.

IFC, which invests in developing the private sector in emerging economies, provides loans, equity investments and advisory services to companies, with a special focus on small to medium-sized enterprises.

“We’ve realized that the need for investments in the region after the Arab Spring is more than we can support, so we’re now starting to manage third-party money,” Makhlouf said.

IFC will provide $100 million of seed investment for the new fund, which is expected to have a first closing within the next three months. It hopes to attract institutional investors, sovereign wealth funds and development agencies.

The corporation has invested $3 billion in the MENA region since the Arab Spring, Makhlouf said, becoming an important conduit of capital for companies that have been adversely affected by unrest in the region.

“Demand for financing is huge now, much bigger than before the Arab revolution,” Makhlouf said, noting that Libya was one of the countries IFC was planning to enter once security issues were sorted out.

The IFC, along with the Islamic Development Bank, said in April that it planned to invest up to $100 million on major infrastructure projects across the Middle East and North Africa. The institutions are contributing $50 million each to the Arab Infrastructure Investment Vehicle, which is part of the Arab Financing Facility for Infrastructure, a joint initiative of the World Bank, IDB and IFC.

(Source: The Daily Star)

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