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Monday, 2 July 2007

IFC Financing to help develop housing market, introduce new financial instruments in MENA

IFC, the private sector arm of the World Bank Group, today announced that it intends to invest in mezzanine notes backed by assets originated by Tamweel PJSC, a Dubai-based provider of Islamic home finance products and services, to help develop the home finance and capital markets in the Middle East and North Africa. IFC's investment of up to $20 million will support the first multi-tranche mortgage-backed securities, based on Sharia-compliant financing, to be issued from the United Arab Emirates. The transaction will serve as a guide for other originators of mortgage assets in the region and spur improvement of the legal and regulatory framework for domestic asset-backed securitizations. The investment demonstrates IFC's support for the Emirates National Securitization Corporation, which had been appointed to structure this transaction as a way to help develop capital markets, enhance access to long-term financing, and make home ownership more affordable. IFC's investment will also support ENSEC's strategy to expand into other Gulf Cooperation Council countries and throughout the Middle East and North Africa. IFC recognizes the housing sector's potential for growth in the region. The Corporation has invested over $308 million to promote housing finance in countries including Afghanistan, Egypt, Lebanon, Pakistan, and the West Bank and Gaza. Jyrki Koskelo, IFC Director for Global Financial Markets, said, 'Access to housing finance in the Middle East and North Africa is limited when compared to markets in Asia, Eastern Europe, and Latin America and the Caribbean. Our strategy is to work with partners such as ENSEC to create structures that increase access to housing finance markets. Our aim is to facilitate interregional investments and knowledge transfer in the region.'Lee Meddin, IFC Deputy Treasurer and Global Head of Structured Finance, added, 'This mezzanine investment will help develop long-term capital markets in the Gulf Cooperation Council region and expand availability of Islamic finance products.' Real estate and property financing are key elements of economic growth. A developed mortgage market promotes an efficient housing finance system, making home ownership more affordable. Housing finance is a priority for IFC due to its significant social and economic impacts. IFC has played an essential role in the sector in other regions by helping develop mortgage finance and capital markets while providing funding to key players. - (AME Info, 1 July 2007)

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