By Pratap Chatterjee
SAN FRANCISCO, May 18 1996 (IPS)

Private corporations will soon be able to use one-stop shopping at the World Bank to meet financing and insurance needs for projects in developing countries.

Bank officials hail the streamlining of procedures as vital for the “build up a thriving private sector” in developing countries and the former Soviet bloc. But, critics are worried that it may result in lower environmental and social standards.

Beginning Jul. 1, companies will be able to call a single number at the Bank’s Washington, D.C., headquarters to enquire about possible loans, political-risk insurance or credit guarantees for business projects in developing countries and the former Soviet bloc.

These services for private companies are offered by the International Bank for Reconstruction and Development — the core institution in the World Bank group — and two affiliates, the International Finance Corporation and the Multilateral Investment Guarantee Agency.

In 1994, the core World Bank group lent approximately two billion dollars a year to governments for private sector projects. The IFC provided 2.9 billion dollars in loans and equity investments, while the MIGA issued 1.6 billion dollars in political-risk and related insurance for 155 projects.

Until now, companies have found it very time-consuming to apply for services at the Bank because eligibility criteria and compliance procedures vary from one affiliate to the next, even though they are part of the same institution.

To streamline these procedures, the Bank last December promoted former IFC staffer Richard Frank to managing director of the newly created Private Sector Development group.

“We are creating a front gate so that we can help companies better. But the idea is not to centralise these functions, but to, shall we say, put a little oil in the machine to make it go more smoothly,” says Bernard Pasquier, who works with Frank.

Currently, there are about 20 private sector projects that receive aid from more than one Bank affiliates. Most of these involve infrastructure and natural resource extraction, such as road and pipeline construction and mining ventures.

One recent example is the Maqui Maqui gold mine in northern Peru, which receives IFC financing and insurance from MIGA. The Hub thermal power project in Pakistan is seeking help from three Bank affiliates.

In the future, such projects will undergo a single comprehensive appraisal and environmental review, with the Bank board of directors being asked to make a single decision on a complete funding package.

Pasquier says that the Bank is also reviewing a number of more complex projects that involve two or more countries, such as a natural gas pipeline from Bolivia to Brazil, an oil pipeline from Chad to Cameroon and a dam in Laos that will supply electricity to Thailand.

“Our objective is to help multinationals and also to help home- grown companies in the developing countries to build up a thriving private sector,” he said.

Environmental and social non-governmental organisations (NGOs), however, have expressed concern that the simplified procedures adopted by the Bank may result in lower standards.

“(World Bank) environmental guidelines and capacities regarding the private sector lending are very modest. Yet the private sector lending of the Bank has potential environmental impacts both in a positive and negative sense,” says Peter Bosshard, an activist with the Switzerland-based Berne Declaration.

Frank and Pasquier recently met with a number of NGO representatives in Washington to discuss these iss}es.

“Some NGOs believe that we should only work on matters that directly affect poor people such as nutrition and education. The thesis that we are defending is that these services cannot happen in a vacuum. We need to promote schemes that boost economic growth,” said Pasquier, who stressed the Bank wants to work as much as possible with NGOs.

Activists who attended the meeting pointed out that the Bank needs to ensure that its review process would be completely “transparent” to communities affected by projects under consideration.

“We emphasised that we appreciated the opportunity to talk with them, but that it would be important to broaden their interaction with other groups, particularly those outside of the U.S.” says Andrea Durbin of Friends of the Earth.

In addition to answering external critics, the new Private Sector Development group must resolve internal conflicts to make sure that Bank affiliates are not contradicting each other because staff from one affiliate is ignorant of what another is doing.

For example, the Bank’s Global Environment Facility (GEF) recently offered a grant to protect the forests of Nakay plateau in Laos at a time when the IFC and the International Development Association — yet another part of the Bank — were considering funding for the Nam Theun II dam, which would flood the very same plateau.

The issue was resolved — to the deep dissatisfaction of environmental groups — when the GEF voluntarily withdrew the Nakay plateau from its environmental protection plans.

Bank and IFC officials are attempting to avoid future conflicts by preparing joint country assistance plans. Eight countries have been selected for a pilot project, beginning next fall with Cote d’Ivoire and Mexico and followed by Brazil, Egypt, India, Indonesia, Kazakhstan, and Poland.

Excerpt:

By Pratap Chatterjee
SAN FRANCISCO, May 13 1996 (IPS)

Private corporations will soon be able to use one-stop shopping at the World Bank to meet financing and insurance needs for projects in developing countries.

Bank officials hail the streamlining of procedures as vital for the “build up a thriving private sector” in developing countries and the former Soviet bloc. But, critics are worried that it may result in lower environmental and social standards.

Beginning Jul. 1, companies will be able to call a single number at the Bank’s Washington, D.C., headquarters to enquire about possible loans, political-risk insurance or credit guarantees for business projects in developing countries and the former Soviet bloc.

These services for private companies are offered by the International Bank for Reconstruction and Development — the core institution in the World Bank group — and two affiliates, the International Finance Corporation and the Multilateral Investment Guarantee Agency.

In 1994, the core World Bank group lent approximately two billion dollars a year to governments for private sector projects. The IFC provided 2.9 billion dollars in loans and equity investments, while the MIGA issued 1.6 billion dollars in political-risk and related insurance for 155 projects.

Until now, companies have found it very time-consuming to apply for services at the Bank because eligibility criteria and compliance procedures vary from one affiliate to the next, even though they are part of the same institution.

To streamline these procedures, the Bank last December promoted former IFC staffer Richard Frank to managing director of the newly created Private Sector Development group.

“We are creating a front gate so that we can help companies better. But the idea is not to centralise these functions, but to, shall we say, put a little oil in the machine to make it go more smoothly,” says Bernard Pasquier, who works with Frank.

Currently, there are about 20 private sector projects that receive aid from more than one Bank affiliates. Most of these involve infrastructure and natural resource extraction, such as road and pipeline construction and mining ventures.

One recent example is the Maqui Maqui gold mine in northern Peru, which receives IFC financing and insurance from MIGA. The Hub thermal power project in Pakistan is seeking help from three Bank affiliates.

In the future, such projects will undergo a single comprehensive appraisal and environmental review, with the Bank board of directors being asked to make a single decision on a complete funding package.

Pasquier says that the Bank is also reviewing a number of more complex projects that involve two or more countries, such as a natural gas pipeline from Bolivia to Brazil, an oil pipeline from Chad to Cameroon and a dam in Laos that will supply electricity to Thailand.

“Our objective is to help multinationals and also to help home- grown companies in the developing countries to build up a thriving private sector,” he said.

Environmental and social non-governmental organisations (NGOs), however, have expressed concern that the simplified procedures adopted by the Bank may result in lower standards.

“(World Bank) environmental guidelines and capacities regarding the private sector lending are very modest. Yet the private sector lending of the Bank has potential environmental impacts both in a positive and negative sense,” says Peter Bosshard, an activist with the Switzerland-based Berne Declaration.

Frank and Pasquier recently met with a number of NGO representatives in Washington to discuss these iss}es.

“Some NGOs believe that we should only work on matters that directly affect poor people such as nutrition and education. The thesis that we are defending is that these services cannot happen in a vacuum. We need to promote schemes that boost economic growth,” said Pasquier, who stressed the Bank wants to work as much as possible with NGOs.

Activists who attended the meeting pointed out that the Bank needs to ensure that its review process would be completely “transparent” to communities affected by projects under consideration.

“We emphasised that we appreciated the opportunity to talk with them, but that it would be important to broaden their interaction with other groups, particularly those outside of the U.S.” says Andrea Durbin of Friends of the Earth.

In addition to answering external critics, the new Private Sector Development group must resolve internal conflicts to make sure that Bank affiliates are not contradicting each other because staff from one affiliate is ignorant of what another is doing.

For example, the Bank’s Global Environment Facility (GEF) recently offered a grant to protect the forests of Nakay plateau in Laos at a time when the IFC and the International Development Association — yet another part of the Bank — were considering funding for the Nam Theun II dam, which would flood the very same plateau.

The issue was resolved — to the deep dissatisfaction of environmental groups — when the GEF voluntarily withdrew the Nakay plateau from its environmental protection plans.

Bank and IFC officials are attempting to avoid future conflicts by preparing joint country assistance plans. Eight countries have been selected for a pilot project, beginning next fall with Cote d’Ivoire and Mexico and followed by Brazil, Egypt, India, Indonesia, Kazakhstan, and Poland.

Excerpt: