What does the term "development impact" refer to in the context of the IFC?

The term "development impact" in the context of the IFC refers to the positive economic and social effects on local communities. This concept emphasizes the broader effects that investments have beyond mere financial returns. It incorporates how projects contribute to the improvement of local living standards, create jobs, enhance skills, promote inclusive growth, and foster sustainable development. The IFC aims to support investment that aligns with these objectives, ensuring that financial activities lead to beneficial outcomes for communities and contribute meaningfully to their development needs.

This understanding is critical because it aligns with the IFC's mission to advance economic development in a sustainable way, considering the implications of their projects on society as a whole. In essence, focusing on development impact ensures that investments are not only financially viable but also socially responsible, making a tangible difference in the lives of individuals in the communities affected.