1. Multidimensional Risk Management
A Tool for Building Sustainable Projects?
Jan P. Mumenthaler
Head, Insurance Services Group
International Finance Corporation

2. IFC is a Member of the World Bank Group
IBRD
International Bank for Reconstruction and Development
IDA
International Development
Association
MIGA
Multilateral Investment and Guarantee Agency
IFC
International Finance Corporation
Est. 1945
Est. 1960
Est. 1956
Est. 1988
Role:
To promote institutional, legal and regulatory reform
Governments of member countries with per capita income between $1,025 and $6,055.
- Technical assistance
- Loans
- Policy Advice
To promote institutional, legal and regulatory reform
Governments of poorest countries with per capita income of less than $1,025
- Technical assistance
- Interest Free Loans
- Policy Advice
To promote private sector development
Private companies in 182 member countries
- Equity/Quasi-Equity
- Long-term Loans
- Risk Management
- Advisory Services
To reduce political investment risk
Foreign investors in member countries
- Political Risk Insurance
Clients:
Products:
Shared Mission: To Promote Economic Development and Reduce Poverty

3. Over $90 billion Invested in Emerging Markets since 1956
IFC FY10 Highlights
S&P, Moody’s AAA
Portfolio $48.8 billion
Committed $16.1 billion
Syndicated $1.9 billion
# of companies 1,656
# of countries 103
# of companies
with equity 668 3

4. Our Value Added IFC’s Products Long Term Financing
Industry knowledge
Relationship with / understanding of local authorities
Expertise in
emerging markets
Capital Mobilization
B loan program
Credit enhancement (Partial Credit Guarantee)
Pre-IPO stamp of approval
Long Term Financing
Corporate / Project / Acquisition
Foreign / Local currencies
Equity / Quasi-equity
Carbon Finance
Advisory Services

5. Selected Power Transactions ……
$130,000,000
Loan Financing
Uganda
Lender
June 2007
Bujagali Energy
$125,000,000
Loan Project
Financing
Pakistan
Lender
March 2007
KESC
$450,000,000
Equity and Loan
Financing
India
Shareholder and Lender
April 2008
Tata Ultra Mega
$262,126,000
Equity and Loan
Financing
Philippines
Shareholder and Lender
February 2008
Masinloc Power
$62,500,000
Loan Financing
Brazil
Mandated Lead
Arranger
February 2006
TermoFortaleza

6. … and in Oil & Gas Cairn Energy Bankers Petroleum Tullow Oil
$171,000,000
Revolving Credit Facility & Equity Investment
Equity Investor &
Mandated Lead Arranger
June 2006
India
Bankers Petroleum
$40,400,000
Senior Loan & Quasi Equity
Lender and Investor
2009
Albania
Tullow Oil
$115,000,000
Senior Loan
Sole Lender
May 2009
Ghana
Pan American Energy
$550,000,000
Syndicated Corporate Loan
Mandated Lead Arranger
June 2007
Argentina
Peru LNG
$300,000,000
Syndicated Project Financing
Lender
June 2007
Peru

7. Multidimensional Risk Management
CSR
Equator Principles
Corporate Governance
World Bank Synergies
Political Risk

8. CSR – How to Move Beyond …

9. Transforming Responsibility into Opportunity
Challenges - Not well integrated in models (financial/operational) - No assessment of financial value - Difficult to communicate value Solution through Tool - Estimates expected net present values - Evidence-based customization+ “plug-and-play” usability - Framework for prioritizing, structuring, timing and resourcing investments

10. Key Sustainability Risks
- Delays in planning phase - Delays in construction phase - Disruptions in operational phase - Project cancellation or expropriation - Added cost + litigation

11. Tool Objectives
Calculate sustainability investment value - Direct value  creation - Indirect value  protection
Strategic framework for decisions
Stronger Risk Management framework  reduced cost of risk

12. Understanding your Risk=making the right choices

13. Environmental & Social Risk Management IFC’s Approach
Sustainability Framework - Sustainability Policy - 8 Performance Standards
PS1 Social and Environmental Assessment and Management System
PS2 Labor and Working Conditions
PS3 Pollution Prevention and Abatement
PS4 Community Health, Safety and Security
PS5 Land Acquisition and Involuntary Resettlement
PS6 Biodiversity Conservation and Sustainable Natural Resource Management
PS7 Indigenous Peoples
PS8 Cultural Heritage
Equator Principles ( 13

14. IFC’s Performance Standards: International Stamp of Approval
“Equator Principles” adopted by 60+ of the world’s leading banks and based on IFC’s Performance Standards
Apply to 85% of project financing worldwide 14

15. What does this mean for the Insurer?
Sustainable project
Client with Risk Management understanding
Improved performance - Monitored environmental performance - Fire & Life Safety focus - Social license to operate
Operating in line with best practice
   15

16. Thank you for your Interest