The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has confirmed its intention to issue Chinese renminbi-denominated bonds in the domestic capital markets of China.

IFC was notified by the ministry of finance that the State Council approved IFC’s application to issue renminbi bonds in accordance with the RMB Bond Issuance Regulations.

IFC appreciates the ministry of finance and the Chinese government’s efforts to encourage international institutions to participate in the bond market. This announcement is an important step to further developing China’s financial markets and assisting its expanding private sector. The proceeds of IFC’s bond issue will be used to finance private sector projects that IFC has already selected and appraised.

“IFC is very grateful for the opportunity to issue bonds in China’s domestic capital markets,” says IFC acting executive vice-president Assaad Jabre. State Council approval is the result of four years of cooperation with the ministry of finance and other relevant authorities during which IFC provided technical assistance and shared with the authorities its extensive experience in issuing in other domestic markets. “The IFC bond, when issued, will contribute to our broader strategy of helping China develop stronger and deeper domestic capital markets,” Jabre says.

IFC funds its lending activities by issuing bonds in the international capital markets. The corporation’s securities, which are rated Aaa by Moody’s and AAA by S&P, have been issued in 33 different currencies. IFC’s funding programme for fiscal year 2006 is around US$2bn.

IFC has been the first, or among the first, non-residents to issue in many currencies including Colombian pesos, Spanish pesetas, Portuguese escudos, Greek drachmae, Hong Kong dollars, Malaysian ringgit and Singapore dollars in the domestic markets, and in Czech koruna, Philippine pesos and Polish zloty in the eurobond markets.

Since 1985, IFC has invested more than US$2bn in 100 private sector companies in China.