Innovation in Action

IFC’s Stocktake on Climate Action since the Paris Agreement

IFC’s Stocktake on
Climate Action sincethe Paris Agreement
Innovation in Action

IFC’s Stocktake on
Climate Action since
the Paris Agreement

Innovation in action

IFC’s Stocktake on Climate Action since the Paris Agreement
Since the signing of the Paris Agreement, carbon emissions have continued to risesteadily. To keep within the 1.5°C limit, the UNFCCC’s Global Stocktake tells us thatemissions need to be reduced by at least 43% by 2030 compared to 2019 levels. Thisrequires a complete rewiring of the global economy - on the scale of the industrial
revolution at the speed of the digital revolution.
IFC is rising to the challenge. Since the Paris Agreement, we have evolved to become
the only global private sector development bank with the capacity to create apipeline of climate investment projects, to de-risk these opportunities, and tomobilize private capital at scale in emerging markets.

1. Scaling and diversifying climate finance.

x3
x6

Tripling of own-account, from
$2 billion to $7,6 billion

US$ Billion

From 2016 to 2023:

18%

sixfold increase ofmobilized finance, from $1.2
billion to $6.8 billion

FY23 Climate FinanceDiversified Across Sectors
FinancialInstitutions

12%

Renewables

1.26.8% climate
in own-accountfinancing
Mobilized
Own accountcommitments

7.6

1.9
2016

.

Record FY23

2023

$14.4
Committed andmobilized in FY23

46%

Percentage of climate
finance in FY23

$4.6b

Invested in green bonds inFY23.

Greening the Financial Sector

Standard setter, early issuer, buyer, capacity builder andmobilizer of institutional capitalFounding member of the Green, Social andSustainability-Linked Bond Principles and an earlyissuer of Green Bonds.

32%
30%.

46%

7%

16%

GreenBuildings

2% AgribusinessIndustrial
Efficiency

Urban &Transport

1% Adaptation

Trained 285 emerging market financial institutions
across over 70 countries, resulting in $8.5b issued inlabeled bonds.
Engaging with regulators on best practices for climate
disclosures and green taxonomies through the
Sustainable Banking Finance Network
Raised $2.4b across three funds targeted at labeledbonds in emerging markets, and ahead of COP28, hasbegun fundraising on a new fund targeted at Blue Bonds.
In 2022, IFC published guidelines on both Blue andBiodiversity Finance.

Blending finance to unlock andaccelerate private investment

Building Pipeline
IFC proactively creates new investment
opportunities and unlocks markets witha range of upstream and advisoryinterventions including regulatory advice,
PPP transaction advice, project
development, standard setting and firmlevel advisory. In FY20 IFC hired an extra
280 staff to expand this work and sincethen has built a long-term project
preparation pipeline with investment
potential of $31bn, of which 58% isclimate related.

IFC uses small amounts of donor funding to derisk first-of-kind projects and investments inplaces with high levels of macroeconomic orpolitical stability risk. This brings down the cost of
demonstration projects and accelerates newtechnology down the cost-curve, enabling
subsequent investments to take off without
subsidy.

2.6

FY18-23$1bn

blendedfinance$6.3
bnleveraged

milliontons of CO2e/year
avoided by clients (FY1822) through projects thatreceived blended
finance.

Private Capital Mobilization
at work: “One Planet”
Managed Co-Lending (2021)
IFC is continuously innovating to crowdin private capital, and in particularinstitutional investors, into emerging
markets climate finance.

2. Energy Transition:
Building markets from Firstof-Kind to Scaled Delivery

Our One Planet program is the world’s
first portfolio of Paris Aligned emerging
market senior loans. It was launched at
COP26, funded with $2.5 billion raised
from three investors at COP27, and at
COP28 we can report that these funds
have been rapidly put to work on
emerging market climate projects. IFC
supports the program’s investors withimpact reporting, mapped to theSustainable Development Goals. IFC is
now fund-raising to expand thissuccessful program and developing its
next innovation: a Warehoused-Enabled
Securitization Program.

To accelerate the clean energy transition andincrease access to electricity, IFC has invested inclose to 23 GW of renewable energy in the past 10years, equivalent to Portugal’s entire grid
capacity. IFC has financed more than 8.5GW ofhydropower, 8.6GW of solar, and 5.8GW of windprojects to date. IFC also finances transmission anddistribution infrastructure, supporting networkresilience and further renewable energy integration.

FirstsOpening & Scaling
Markets

First-of-kind RE projects eg
India, Thailand, Philippines,Chile, South Africa, Mexico,
Burkina Faso, Zambia

1Broadening
the Transition

Supporting corporate & municipal
energy transitions (e.g. OCP’s transition
to green fertilizer production inMorocco)

Wholesale

Mobilizing capital marketsand FIs: $6.2bn of RE
investment through FIs inlast decade.

Scale
2543

Large RE programs: Rewa
(India), FiT (Egypt), Super Six(Pakistan), Seven Sisters(Jordan), RenovAr (Argentina)​

ReplicationTemplated procurement
processes with stapled
financing: Scaling Solar,
Scaling Wind, Scaling MiniGrids

Renewables (cont'd)
Pipeline creation in action:
Powering Delhi metro with the sunMore than half of Delhi Metro runs on solar power froma 475MW project in Madhya Pradesh. Thanks to IFC’s
PPP transaction advice, an electronic competitive
bidding process yielded tariffs of as low as 4.9 US ¢/kWh,making the cost of solar comparable to that of coalbased power. Public funding from the IBRD of $18
million was multiplied almost 32 times with $575 millionof private investment mobilized by IFC.

New technologies at the heart of IFC's agenda
IFC is supporting the deployment of nascent transformative technologies such as
offshore wind, battery storage, and green hydrogen. Examples include:
roadmap for Azerbaijan to exploit its potential. A7GWof offshore wind power.
$400 million sustainability-linked loan to ENGIE. AChilefor battery storage and coaldecommissioning.

investment in Nuru, in the Democratic. An
Republic of Congo, to support its growthambition to provide 5 million people with clean
distributed energy on isolated city grids.

3. Decarbonization:from sectors to systems
IFC is embedding climate into every sectoral
strategy. For high-emitting sectors likecement, steel and fertilizers, this meansa transition to lower carbon pathways,
greening of supply chains, waste reduction,and circularity.

Best in class low-carbon
cement in Senegal andbreakthrough technology
to decarbonize steel in
Brazil81%

of our manufacturing
investments targeted at
decarbonization in FY23

Greening Emerging
Market supply chainsof large corporates(e.g. Levi's)

Brazil's first fossil fuel-free pulp
mill expected to generate
180MW of surplus energy andcreate 3,000 green jobs

Decarbonization (cont'd)
Rapidly growing Electric Vehicle portfolio
IFC has now invested nearly $3 billion in e-mobility ,helping scale up the industry by working across thesector’s entire value chain, focusing on large, globally
replicable investment opportunities.

Featured investments
Loan of up to US$180 million to support Allkem'sconstruction and operation of a battery-gradebrine lithium plant at Sal de Vida in Argentina.
IFC's first investment in an EV manufacturer inIndia - a subsidiary of Mahindra - and the first inelectric three-wheelers globally.
$400 million loan to Société Générale to finance
operating leases of electric and hybrid vehicles
through their subsidiary ALD in 6 countries
including Mexico and Croatia.
IFC is partnering with Gozem to develop a vehicle
financing platform in Togo and Benin, targeting
6,000 drivers working in the informal sector, ofwhich up to 10% are anticipated to adopt
electric bikes.

Expansion of IFC's green building
program
IFC’s EDGE green buildings certification hasbuilt a globally recognized tool and capacity
across emerging markets to shift the market
to green construction and retrofitting,resulting in 63 million square meters ofcertified green building floor space across 96
countries. IFC’s cumulative green building
investment of $12.2B has catalyzed a further$63B of private investment in certified
buildings worldwide, reducing emissions by ayearly average of 1.3M tons of CO2. EDGE
options now cover warehousing, airports, datacenters, affordable housing, retrofit, self-buildand net-zero buildings. In FY24 IFC launched aflagship report “Building Green” seeking todrive down carbon intensity in building
material supply chains.

US$ 3bInvested in e-mobility
value chain

US$ 63b

private investment catalyzed incertified buildings worldwide

4. Mainstreaming
climate business
Today at IFC, climate business is everybody's business. The
institution is on track to align 100% of its projects with theobjectives of the Paris Agreement by 1st July 2025. This means
helping every client to avoid locking-in investment inconsistent
with the ambitions of the Paris Agreement and its country ofoperation's Nationally Developed Contributions. It also means
helping every client prepare and adapt to the expected changes inclimate in the coming years, including extreme temperatures,storms and flooding. This allows our investment teams and clients
to both address climate risks and take advantage of the business
opportunities available in the transition to low-carbon, resilient
growth.

5. Forward Look
How do we incentivize and enable private sector capital forclimate finance?
As we look ahead with urgency and ambition, we look forward topartnering with you to address the questions and challenges weface in maximizing our contribution to accelerating an inclusivetransition in emerging markets:
How can governments incentivize and enable private sector
capital to fund climate projects?
Governments should help put into place the right enabling
environments, which include green taxonomies, targeted public
spending, removing fossil fuel subsidies and creating asufficiently high carbon price to elicit private sector response at
the necessary pace and scale.
How can we support domestic financing for green projects toreduce currency risk?
There is limited availability of long tenor local currency pools
needed for climate investment. IFC is working to expand local
capital markets in the long-term and in the short-term continues
to innovate with local currency issuances, hedging instruments
and blended finance.
How do we catalyze new markets where insufficientincentives exist?
IFC needs to raise an additional $4bn of blended finance andgrants from current and prospective donor partners to support
our growth ambitions in climate finance and mobilization.

US$ 500m

Amount invested inclimate adaptation
since 2017, including
in resilient agriculture,buildings andinfrastructure. Thistargeted adaptation
spend is multiplied
many times by thescale of the assets
and businesses it
helps to makeresilient.