Blümel: 5 million to help the recovery in Eastern Europe Inaugural visit of the new Managing Director of IFC (World Bank) to discuss equity strengthening measures  

Makhtar Diop, the new Managing Director of the International Finance Corporation (IFC), paid an inaugural visit to Finance Minister Gernot Blümel at the Federal Ministry of Finance on Friday. As the private sector arm of the World Bank Group, the IFC is the largest global financial services provider in the area of private sector development in emerging and developing countries. During the course of the meeting, Blümel announced support would be forthcoming to assist sustainable recovery in Eastern and South-Eastern Europe.

“Eastern and South-Eastern Europe have very close economic ties with Austria.  It is therefore in our mutual interest that we support this region in its recovery following the pandemic. For this reason we have pledged EUR 5 million to the IFC. The intention is, first and foremost, that sustainable projects should be financed,” said Finance Minister Gernot Blümel.

The subject of equity financing was also discussed. IFC investment in equity mobilises a large number of co-investors, as the example of Austrian banks in Eastern Europe shows. In 2020, for instance, USD 22 billions’ worth of investment from the IFC mobilised USD 10.8 billions’ worth from co-investors.

“The provision of equity financing is essential, particularly in conjunction with the recovery of the economy after COVID-19. The crisis has demonstrated how greatly business is dependent on the banks. That is why we in Austria are seeking to strengthen equity so as to arm our companies for the next crisis and to make our economy more resilient,” noted Blümel.

The IFC has had a regional office, focussing on Eastern and South-Eastern Europe, in Vienna since 2018. The Vienna office is its biggest branch in the EU. With a capacity for 130 workplaces, the IFC office accounts for around half of the World Bank Group presence in the city.

“Vienna is an important finance hub, for Eastern Europe in particular. The IFC location in Vienna also further facilitates cooperation opportunities for and with Austrian partners,” said Finance Minister Gernot Blümel in conclusion.