Making Impact Investing Markets: IFC (A)
In 2017, the International Finance Corporation (IFC) faced the first big investment decision in its new Scaling Solar project. Founded in 1956, IFC was an international investment body with national governments as shareholders, whose mission was to promote economic development. It achieved this primarily through debt financing, which allowed the organization to use covenants to exercise close stewardship of its investments. Beginning in the late 1990s, the organization's mission had evolved to foreground environmental and social sustainability in its development projects. Scaling Solar, launched in collaboration with the World Bank, would be one of IFC's marquis projects in promoting a sustainable energy future. In this case, students will review the history of IFC (a pioneer in the burgeoning field of impact investing), explore the uses of debt as an instrument for development financing, consider how sustainability fits into the impact investing framework, and evaluate a potential new investment in solar power in Zambia.