Encouraged by the post-war optimism the World Bank’s private sector investment arm – International Finance Corporation (IFC) yesterday revealed plans to expand its support in terms of financing and advisory services.
FC at present has a committed portfolio of US$ 200 million in Sri Lanka across a range of sectors and its Executive Vice President and CEO Lars H. Thunell said the engagement with and support to Sri Lanka will be enhanced.“Sri Lanka has great potential, people are resilient with a good base of entrepreneurial SMEs and big firms. Apart from being strategically located amidst big markets such as India, the country is also beautiful which explains why tourism is on the rebound,” Thunell told the Daily FT in an exclusive interview yesterday prior to concluding his three-day visit to Sri Lanka.
“We see Sri Lanka is in an important post-conflict phase and aware of its opportunities as well as challenges. We are keen to help Sri Lanka in meeting both by increase our support, presence and investments,” he added. Thunell said that IFC will explore opportunities in financing SMEs which he identified as key for job generation as well as microfinancing – important for inclusive growth and equity financing whereby help family-owned or private companies to go public. Continued support to infrastructure development and expanding advisory services especially in skills and entrepreneurial development are other priorities.
“We will build on the successful initiatives carried out in existing sectors in addition to being open to new ideas,” Thunell added.
IFC has been investing in and supporting Sri Lanka since 1992 as well as the establishment of an office in 1998. Thunell said Sri Lanka is a focus country for IFC’s program in South Asia. Its current program has encompassed sectors such as infrastructure, tourism, renewable energy, banking, and health care. IFC also provides advisory support to promote sustainable growth among small and medium enterprises by facilitating access to finance and offering capacity-building and training opportunities.
Thunell on Wednesday visited North as well as the South to oversee some of the IFC-supported initiatives and projects whilst yesterday he called on President Mahinda Rajapaksa. During his visit he networked with various stakeholders ranging from private sector across different fields, SMEs, farmers, and Government officials.
“During my interactions with people, farmers and small businesses both in the North and South, I found a strong entrepreneurial spirit in them and this is very encouraging,” said Thunell who has been with the IFC since January 2006 and leading the organisation’s mission to promote sustainable private sector development.
Recognising the country’s critical need for foreign direct investments, Thunell said IFC will harness its network to encourage foreign firms to consider good opportunities in Sri Lanka. “We are keen to promote greater South-South collaborations,” he added.
Whilst he expressed hope the local private sector will continue with their initiatives, Thunell emphasised the importance of greater clarity in policy and stronger investor climate along with improved infrastructure for Sri Lanka to draw a higher degree of FDIs. “Sri Lanka progressing further on the World Bank-IFC compiled Ease of Doing Business Ranking will help the country in achieving greater inclusive growth,” he emphasised.
Sri Lanka must also identify sectors which promise high growth potential, address bottlenecks so as to fast track the development of these sectors. “For example we know tourism has great scope and around 2.5 million tourists are being targeted by 2016. As more capacity needed, it is important to see whether the country has enough inputs such as construction material as well as skilled human capital,” Thunell explained.
Sri Lanka pursuing greater regional economic integration within Asia was also emphasised by IFC CEO who described the global economic scenario with more downsides than upsides.
According to IFC its strategic focus is to support growth and development in Sri Lanka through: Inclusive growth, including the reach for the Base of the Pyramid, rural areas, infrastructure building and improving access to finance for Micro Small and Medium Enterprises (MSMEs); Global integration via improved financial infrastructure, investment climate reforms, trade financing, logistics, and South–South investments and Climate change, including the adaptation and mitigation (using renewable energy, cleaner production, and energy efficiency financing).
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