Supporting Private Educationin Emerging Markets

September 2010

2

International Finance Corporation at a glance

History, ownership and vision• Founded in 1956 to foster private sector

investment in the developing world• Part of the World Bank Group and owned by

its 179 member countries• Vision: That poor people have the opportunity

to escape poverty and to improve their lives.

$0

$2

$4

$6

$8

$10

$12

$14

$16

2002 2003 2004 2005 2006 2007 2008 2009

US$

billion

s

IFC's own account* Syndications

IFC Financing as of June 30, 2009Total Commitments: US$10.5 billion for own account, US$4.0 billion mobilized

*Includes loans, equity, guarantees, risk management products

Infrastructure 17%Global Manufacturingand Services 18%

Subnational Finance 1%

Private Equity and Investment Funds 5%

Health and Education 2%

Global Financial Markets Group 36%

Oil, Gas, Mining, andChemicals 10%

Agribusiness 7%

Global ICT 4%

IFC Portfolio as of June 30, 2009, by Industry

Total US$32.4 Billion

IFC Portfolio as of June 30, 2009, by Region

Total US$32.4 Billion

Middle East and North Africa 11%

Europe and Central Asia 26%

East Asia and the Pacific 14%

Sub-Saharan Africa 11%

South Asia 12%

Global 1%

Latin America and the Caribbean 25%

IFC FY09 Annual Report data

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IFC has a well established franchise in Latin America

($600)

$100

$800

$1,500

$2,200

$2,900

$3,600

$4,300

$5,000

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09

IFC syndications IFC loans, equity, guarantees, risk mgt.

Historical CommitmentsUS$ millions

Fiscal Year 2009 CommitmentsUS$ millions

LoansUS$ 1,648

SyndicationsUS$670

Guarantees and RM US$824

Equity US$250

US$ 3,392 million

IFC Portfolio by Country (largest exposure)US$ millions

BrazilUS$ 2,364

Argentina US$1,054

Colombia US$873

US$ 12,201 million

Total Committed Portfolio US$12,201

Committed portfolio for IFC’s account

US$8,776

Committed portfolio held for others(loan and guarantee participants)

US$3,425

Regional PortfolioUS$ millions

IFC FY09 Annual Report data

4

IFC Investment Strategy: 3 Fundamental Principles

• Commercially viable investments ― Market based― Must produce returns

• Value added beyond capital― Opportunity to help clients achieve higher standards of

management and social responsibility

• Strong development impact― Support projects that will expand much needed services

in a socially and environmentally responsible way

The Education Sector is a pillar of IFC’s Strategy IFC has invested in 64 projects in 31 countries Total project value: US$1,577 million

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Summary of IFC Investments in Education

Chile23%

Antigua & Barbuda

13%

Mexico11%Brazil

10%

Egypt7%

West Bank & Gaza7%

The rest29%

Education CHE Portfolio by Country*

* Total education portfolio size US$316 million

Loan65%

Equity2%

Guarantees33%

Education CHE Portfolio by Product

Examples of IFC Investments in Education

Education Education Education Education Education

US$30mm Bond Guarantee

Chile

US$30mm Senior Loan

MexicoUS$8mm Senior Loan

Argentina

US$39mm in Senior Loans

Brazil

US$30mm Senior Loan

US$50mm Guarantee

Chile

US$18.4mm Guarantee

Pakistan

US$30mm in Senior Loans

US$1mm Capital

Mexico

US$5mm Senior Loan

Trinidad Tobago US$8mm Senior Loan

Lebanon

US$7.3mm Senior Loan

Vietnam

US$12mm Senior Loan

Turkey

US$5mm Senior Loan

Uruguay

US$2.5mm Senior Loan

Ghana

US$8mm Equity Investment

Mexico

US$14mm Student Loan Guarantee

Brazil

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Global Trends in Education

Major Regional and International PlayersAnhanguera Educacional

Participações S/A

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• Up to 12 years final maturity and 2 to 3 years grace period for principal on average• Security package typical: physical assets, pledge of shares, leases, etc.• Market based pricing• Available in fixed / floating and, depending on market conditions, local or USD currency

• IFC syndicates portions of loans in order to mobilize additional financing partners• Commercial banks take comfort in IFC due diligence and structuring experience• Over 150 commercial banks and other institutions currently participate in IFC’s B loan program

• Hybrid featuring characteristics of both debt and equity– Subordinated, convertible, income participation, bullet repayment and others

• Typically in the form of common or preferred stock• Denominated in local currency

• Securitizations: asset-backed securities, including future revenues, receivables, etc.• Guarantees: partial credit guarantees enhancing credit worthiness of client's financing• Risk-sharing facilities: allowing for alternative risk allocation

• IFC provides technical assistance / advisory services in support of its clients• Country and sector specific• Funded by donor governments and other multilateral institutions

IFC has a Full Range of Financing Capabilities

Senior Loan

B Loan / Syndication

Mezzanine

Equity

StructuredProducts

Advisory Services

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IFC’s Teams Work Closely with Clients

• Identify project• Analyze and

discuss with company business plan and sources and uses of funds

• Obtain management approval to formally consider investment

• In-depth business review

• Senior management interview and site visit

• Obtain approval to negotiate final transaction terms

• Negotiate final investment terms

• IFC lawyers initiate draft investment documents

• Final approval• Sign legal

documents• Disbursement

• IFC monitors the project closely

• Consults periodically with project managers

• Field missions to enterprise

• Requires progress reports, annual audited statements, and other material information

2 – 4 weeks 2 – 4 weeks 1 – 2 weeks 3 – 5 weeks 4 weeks As appropriate

SupervisionBoard

Approval

Negotiation &

Documentation

Investment Review Meeting

AppraisalIdentification &

Review