Sichuan Investment and Guarantee Company

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The project involves the setting-up of an investment and credit guarantee fund for the interior Sichuan Province of China. It is part of a broader IFC initiative to assist in the development of the private SME sector in Sichuan, and is structured to supplement another project, the China Project Development Facility (CPDF) (project number 9677). SIGC would be incorporated offshore and have an initial fund life of 10 years, with an optional 2-3 year extension for liquidation. SIGC would provide both equity capital and supplementary credit guarantees for SMEs. SIGC would be initially capitalized at about US$30 million. Investors in SIGC would primarily be foreign institutions, with substantial participation by development agencies. The equity investments will strengthen the capital base and management capabilities in various aspects of the SMEs while the credit guarantees will help mobilize local bank credit for the SMEs.SIGC is supportive of the IFC Strategy in China and has substantial development impacts by mobilizing much needed capital to SMEs in a major interior region of China. It will also help address the institutional deficiencies of SMEs, accelerate development of investing in SMEs, and promote economic development and employment in the province. IFC has the important role of identifying needs of the SMEs, identifying the fund manager, structuring the fund, mobilizing capital and implementing World Bank environmental policies.