IFC invests up to 100m EUR in nonperforming loans in CEE

International Finance Corporation (IFC), a member of the World Bank Group, has announced that it plans to invest up to 100 million euros to buy nonperforming loans in Central and Eastern Europe, working alongside Varde Partners L.P., a Minneapolis-based specialized distressed debt and asset firm.

The proposed co-investment project, which could see up to 450million euros invested, aims to help local economies recover from the crisis by addressing the problem of bad debts and troubled assets.

This project to remove troubled assets from bank balance sheets, approved on 21 January by IFC`s board, is aimed at ensuring that banks in these emerging markets are able to continue to provide financing to businesses and credit to consumers, boosting economic activity and creating more jobs.

The project also will contribute to developing a transparent market for distressed assets, improving market efficiency.

This co-investment strategy forms part of the Debt and Asset Recovery Program launched by IFC during the 2009 World Bank Group`s Annual Meetings in October. This program supports real and financial sector stability and growth by helping clean up bad assets, allowing businesses and banks to refocus on productive activities.

IFC works on strengthening sustainable economic growth in the underdeveloped countries through support to private sector, engagement of private capital and provision of consulting services and services of reduced risk to companies and governments. IFC invested 14.5 billion USD in fiscal year 2009.