IFC partners with Vietnamese SWF for co-financing deals

The International Finance Corporation is partnering with Vietnamese sovereign wealth fund State Capital Investment Corporation for co-financing and acquisitions of state-owned companies.

World Bank investment arm International Finance Corporation (IFC) has teamed up with Vietnamese sovereign wealth fund State Capital Investment Corporation to explore co-financing opportunities in Vietnam’s agribusiness, services, and manufacturing sectors, according to a statement.

This includes purchasing equity interests in state-owned companies and mobilising capital from international buyers. IFC and SCIC will also consider take-privates on a case-by-case basis.

Along with funding opportunities, IFC will also help SCIC execute its divestment plan and improve the corporate governance practices of SCIC’s around 200 portfolio companies.

The agreement was signed by both parties on 7 December and will be in effect for two years.

Commenting in the agreement, IFC regional director for East Asia and the Pacific Vivek Pathak, said: “Cooperation with SCIC is part of our efforts to support the equitisation of state-owned assets and help further strengthen the private sector as a key driver for economic growth and employment in Vietnam.”

IFC, an active investor in private equity, has been investing approximately $500 million annually into funds focused on developing countries. It made its first direct investment in Vietnam in 1994 and has since committed $5.6 billion to 120 projects in infrastructure, agribusiness, renewable energy, finance and manufacturing in the country. IFC has made commitments to several domestic private equity funds including Mekong Capital and Dragon Capita, according to PEI data.

SCIC, currently manages around 18 trillion Vietnamese dong ($780 million; €730 million) across 500 companies operating in various sectors including financial services, energy, consumer and healthcare. Earlier this year SCIC announced it would divest its holdings in among 10 listed companies, as part of the government’s long-term scheme to restructure state-owned enterprises.

Target companies include dairy giant Vinamilk, software producer FPT Corp and Bao Minh Insurance.