Bangalore: The International Finance Corporation (IFC), the private sector arm of the World Bank, has been increasing its exposure to India gradually and by this year, ending June 30, its exposures may top US$500mn according to IFC's chief investment officer, South Asia, Anita Marangoly George. She said that the exposure last year (July 1, 2004-June 30, 2005) was US$430mn and this year, expectations are that it would be US$500mn, making the country the third largest globally where IFC has exposure.

IFC makes exposures through its environment opportunity fund.

The fund provides flexible financing to innovative ventures that have a strong potential to increase environmental sustainability but need to overcome the uncertainty associated with new markets, new technologies, and new ways of doing business.

IFC's exposure in India since 1956 is US$3.6bn, while its existing portfolio is US$1.3bn. IFC exposure is focussed on companies with innovative and cutting edge technologies that have environmental benefits.

Of the total exposure in India, 80 per cent is by way of loans lent on commercial rates and 20 per cent equity, she said. Returns on equity investment in India are 10 to 12 per cent over the years, Ms George said, adding, recovery from loans is also good.