Interview with Vice President, IFC
A member of World Bank Group, International Finance Corporation (IFC) has chalked out its investment plans for India focusing mainly on the renewable energy sources and targeting the bottom of the pyramid. Karin Finkelston, vice president, Asia Pacific talks to Rutam Vora on IFC's investment plans in India during the current year. Edited excerpts:
What are your plans for investments in India during the current year?
In the year 2011, our commitments in the entire South Asia was about US $ 742 million. This year, we are planning to invest about US $ 1 billion in India alone. This will be the largest investment in a single country by IFC in a year. Also, IFC's largest country exposure is in India at US $ 3,766 million worth of committed portfolio, which is about 9 per cent of IFC's global portfolio.
For the entire South Asia, we are planning to invest about US $ 2 billion in the current year.
For such a big quantum of investments, what will be your focus areas for India?
IFC has set three focus areas for making investments in India. That includes climate change, inclusive growth and global integration. For climate change, we are looking at projects in the field of renewable energy sources that brings efficiency in the power generation. Water is also one of the clean energy source that we are looking at. For the inclusive growth, we are focusing on lower income groups of the society and forging partnership with states to advise governments and private sector on financial inclusion. We are also focusing on encouraging private investments in low-income states like Rajasthan, Odisha etc. We will also focus on manufacturing, agribusiness and financial inclusion sector.
With increased attention towards solar energy, many players have entered solar power sector. Are you looking to help some of those projects in Gujarat?
Yes, certainly. Gujarat is doing well on the climate change front. Still we are looking to tap lower income districts in Gujarat. We have already extended our support for two rooftop solar projects in Gandhinagar. One of that is being implemented by Azure Power and another is being developed by SunEdison. We are also in the process to create a policy framework to replicate this rooftop project in other parts of the state.
You are also focusing on advisory for financial inclusion. Are you concerned about India's current state of micro financing industry especially after disturbed sentiment after the Andhra Pradesh issue?
That is not really worrying. We are working with local players that are engaged in micro, small and medium businesses. And we are creating a responsible microfinance, that we call it for India and across the world. Also, we are talking to all stake holders including entrepreneurs, non-banking finance institution, MFIs, the regulator as well as the borrowers to understand the responsible microfinance.
We are also trying to make a credit bureau or a credit history of the micro borrowers a kind of database for people to look at and that will further help us to better understand the situation.
Can you elaborate more on your recent association with Self-Employed Women's Association (SEWA)?
We are providing a partial credit guarantee for a US $ 5 million loan by a private sector bank to the SEWA. The project is to provide energy-efficient cook stoves and solar lanterns to more than 200,000 members of SEWA mostly in Gujarat and some in Rajasthan. This is a pilot project and we expect to extend our association with SEWA forward. This project will evolve a new financial product for the purchase of clean energy products by women in rural India.
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