IFC
Financial Institutions Group (FIG)

Climate FinanceIndustry Context
Climate change represents both a challenge and an

IFC Strategy and Portfolio

opportunity for financial institutions in emerging markets.

Since the 1980s, IFC has been a critical player

Climate mitigation and adaptation needs in Emerging Markets

in climate business and continues to be aand Developing Economies are significant, with estimatesleader in this space. IFC’s climate businessranging between $1.7 trillion and $3.4 trillion annually by 2030

is focused in the near term on five strategic– an amount that cannot be financed by the public sector

areas – clean energy, climate-smart cities,alone. The private sector has a critical role to play by investingclimate-smart agribusiness, green buildings,

in low-carbon technologies, creating jobs and skills, andand green finance. IFC is committed to working

building resilience into its investments and operations. Indeed,with financial institutions to finance projects

according to the IMF, 80-90% of the climate finance needed inthat will support mitigation and adaptation. In

emerging markets will have to come from the private sector.

addition, IFC has committed to aligning 85% of

Fortunately, financial institutions are increasingly building

its new investment projects with the objectives

climate finance into their long-term strategies and portfolios,of the Paris Agreement starting July 1, 2023, andand financial markets are integrating climate transition risks

100% of these investments starting July 1, 2025.

and opportunities into investment decision making.
FIG focuses on investing directly in andpartnering with financial institutionsin climate-smart sectors to reduce GHG

FIG commitments (as of end-June 2024)

emissions and support climate change
adaptation. FIG’s climate finance strategy is
guided by three priorities:• Help create a livable planet for all by
ensuring climate markets and sustainability$18.5billion

engagements support a just transition.
• Create and grow climate markets throughinvestment, mobilization, and institution

to climate-related projects

through361+

emerging market
ﬁnancial institutions

building.
• Enable emerging market financial
institutions to meet their Paris Agreement
commitments.

IFC’S CLIMATE BUSINESS WITH FINANCIAL INSTITUTIONS HAS SKYROCKETED• In FY24, FIG’s climate finance projects totaled $5 billion• IFC was the first issuer of a $1 billion benchmark green bondacross 63 projects, including $2.6 billion in own accountin 2012 and, by the end of FY24, had issued more than $13.9

volume and $2.4 billion in core mobilization.

billion in 207 green bonds in 21 currencies.

• FIG’s investment partners have reported projects leading• IFC’s advisory services facilitate global client financial

to an estimated reduction in GHG emissions of 24.33 million

institutions to build climate finance portfolios, avoiding

tCO₂e/year.

additional millions of tons in annual GHG emissions.

Project Examples
BLUE FINANCE

DISTRIBUTED SOLAR
Global investment in rooftop/distributed solar continues togrow rapidly, despite the challenges inherent in financing small
projects. FIG has been scaling up its investment and advisory

The Global Blue Bond Project achieved significant

services work to help clients expand their investments in thesemilestones in FY24, enabling three IFC blue loans totaling

projects. This includes investment projects with banks, NBFIs,$172 million and bringing the cumulative blue financing

and debt funds for commercial and industrial solar and into $1.6 billion since its inception in 2020. IFC partneredcompanies financing off-grid solar and appliances. In recentwith T. Rowe Price to develop a global blue bondyears FIG has invested in several structured debt funds targetinginvestment strategy, which contributed to winning thethese markets, including Africa Go Green, Afrigreen, SIMA, and2024 ESG Initiative of the Year award in the Americas

the Facility for Energy Inclusion. FIG’s Global Climate teamfrom Environmental Finance. Furthermore, IFC wasleverages donor resources to support clients with their advisory

recognized as the Best Multilateral Institution forneeds for rooftop solar.

Sustainable Finance by Global Finance, highlighting its
blue-themed bonds that support sustainable ocean
economies. Additionally, the Philippine SEC issued new

GREEN BUILDINGS

guidelines on Blue Bond Issuance in September 2023,
building on IFC's Blue Finance Guidelines and reflecting

In South Africa, FIG committed $250 million to First Rand Bank

increasing global interest and commitment to the blueto support the bank’s expansion of EDGE certified green

economy, underscoring IFC’s leadership in this field.

buildings, including green affordable housing and low-to-middle
income housing. It supports South Africa’s climate goals,
contributing to the country’s target of reducing GHG emissions

ADAPTATION & RESILIENCE

by 42% by 2025 under the Paris Agreement. This investment wasa milestone for FIG, marking the first project with a specific

In FY24, FIG committed $84.4 million in own accounthousing carve-out that integrated climate and gender. Inclimate adaptation & resilience finance across 15 projects

addition, this is the first project with performance-basedin the areas of climate smart agriculture, green buildings,incentives for certified green buildings supported jointly by therenewable energy, and biodiversity. Examples of deals

United Kingdom-IFC Market Accelerator for Green Construction

include: IFC’s commitment of $130 million to DLL, a(MAGC) Program and German Government's Federal Ministry for

Rabobank subsidiary, to finance sustainable equipment

Economic Affairs and Climate Action (BMWK).

for agri-SMEs in Brazil, Chile, and Poland, with at least
half of the proceeds earmarked for climate adaptation.
Meanwhile in Morocco, IFC provided a risk sharing facility
for up to $15.8 million to Banque Centrale Populaire tohelp farmers and distributors acquire photovoltaic anddrip irrigation equipment, enhancing renewable energy
and water management in agriculture.

NATURE/BIODIVERSITY
In July 2024, IFC and BBVA Colombia issued a $15 million firsttranche of the world’s first biodiversity bond that will amount
to $70 million, with the objective to finance projects that
address the key drivers of biodiversity loss, particularly focusedon reforestation, regeneration of natural forests on degradedlands, climate-smart and regenerative agriculture, andrestoration of wildlife habitats. The operation will help
establish eligibility criteria and reporting indicators for
activities that help protect, maintain, or improve biodiversity
and ecosystem services.

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