Plantations, poverty and power - Critical Information Collective

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International Finance Corporation (IFC): Public money for private profits
The International Finance Corporation is the World Bank’s private sector lending institution. Founded in
1956, by 2007 it had a total committed portfolio of almost US$31 billion, 508 and has worked with more
than three thousand companies in 140 countries. 509
According to its mission statement, IFC exists to “promote sustainable private sector investment in
developing countries, helping to reduce poverty and improve people’s lives.”510 But when talking to
industry, IFC staff occasionally let slip the real purpose of IFC. “We are open for business,” announced
Tatiana Bogatyreva, a senior investment officer with IFC, at a packaging industry conference in Moscow
in June 2005.511 The conference was organised by the Adam Smith Institute, a far right-wing proprivatisation
lobby group, and included sessions such as “Packaging as a marketing tool” and a
“Champagne roundtable” with packaging industry executives.512 Bogatyreva told the conference that
IFC is ready to finance more packaging sector projects.
Unlike the rest of the World Bank Group, IFC provides loans directly to companies, rather than to
governments. The benefits to companies are clear. As well as providing long-term, cheap financing, IFC
provides advice on emerging markets, industry sectors and financial structuring. And IFC can help
arrange project funding from commercial banks, as well as providing equity finance for companies.
For several decades, IFC has been a major sponsor of pulp and paper projects around the world. In recent
years, IFC has approved loans for pulp and paper projects in Pakistan, China, Brazil, Uruguay, Jordan and
Kyrgyz Republic. When IFC decides to invest in a project, commercial banks will follow. For example,
financing of the Botnia pulp mill in Uruguay was stalled until the IFC agreed to fund the project.
The following list of projects gives an indication of IFC’s involvement in the pulp and paper sector:513
•IFC started lending to Kenya’s Panafrican Paper Mills in 1974, since when it has made around eight
loans to PPM. In 1995, IFC gave a US$15 million loan to PPM to increase capacity at its mill in Webuye.
The pulp and paper mill is massively polluting and has created a series of health problems for people
living in Webuye. 514
•IFC provided a total of US$104.5 in loans to Arauco in Chile. 515 Pollution from Arauco’s Valdiva pulp
mill killed hundreds of protected black-necked swans and caused thousands to migrate from the Rio
508 “IFC at a glance”, International Finance Corporation Annual Report 2007.
http://www.ifc.org/ifcext/annualreport.nsf/AttachmentsByTitle/AR2007_v1_IFC_at_a_Glance/$FILE/AR2007_IFC_at_a_
Glance.pdf
509 “International Finance Corporation”, Bank Information Center. http://www.bicusa.org/en/Institution.6.aspx
510 “International Finance Corporation”, Bank Information Center. http://www.bicusa.org/en/Institution.6.aspx
511 Chris Lang (2005) “Open for business: How the International Finance Corporation subsidises the pulp and paper
industry”, World Rainforest Movement Bulletin 95, June 2005. http://www.wrm.org.uy/bulletin/95/Global.html#IFC
512 “The CIS Packaging Summit 14th - 16th June 2005”, Conference brochure, Adam Smith Conferences.
513 This list was generated by a search for “International Finance Corporation” on 17 June 2005 on RISI’s website
http://www.paperloop.com (now http://www.risiinfo.com). The list was updated with an additional search for “pulp” on
IFC’s website: http://ifcgoogleext.worldbank.org/
514 Chris Lang (2007) “Kenya: Pan Paper plans to expand its polluting operations”, World Rainforest Movement
Bulletin 123, October 2007. http://chrislang.org/2007/10/29/kenya-pan-paper-plans-to-expand-its-polluting-operations/
515 Machteld Spek (2006) “Financing Pulp Mills. An Appraisal of Risk Assessment and Safeguard Procedures”, Center
for International Forestry Research (CIFOR), Bogor, Indonesia, page 22.