In Washington DC:
Lucie Giraud
Phone: +(202) 458 4662
Email: lgiraud@ifc.org


Nairobi, Kenya, November 14, 2006 - The International Finance Corporation, the private sector arm of the World Bank Group, is calling on banks in developing countries to increase their lending to companies wishing to invest in climate-friendly technologies. Through different business models, the IFC has been demonstrating the profitability of clean energy investments. Supporting private sector investment in climate-friendly technologies is particularly important in developing countries, where companies have no obligation under the Kyoto Protocol to reduce their CO2 emissions.

“As governments meet in Nairobi to discuss the future of the Climate Convention, we should also consider ways to empower the private sector,” said Lars Thunell, IFC’s Executive Vice President. “Private companies in developing countries can play a significant role in combating climate change, but they still face a number of obstacles, including access to finance for investing in clean technologies.”

Many banks still perceive investments in clean technologies as high risk, especially in developing countries. There are, however, business models that allow for climate-friendly investments at reasonable cost. IFC, which combines an expertise in clean energies with a 50-year experience in developing country investment, has been able to develop such business models.

In China, for example, IFC brought together for the first time a gas company, a supplier of clean energy equipment, and a commercial bank to create a new financing model. The bank, Industrial Bank, provides commercial credit to the customers of the gas company, Xinao Gas, to finance their clean energy projects. Xinao Gas offers advice on reducing energy consumption and pollution. It also provides the equipment – such as boilers and heating systems – and partners with Industrial Bank to provide loans for the equipment. The result is $150 million worth of clean energy projects over six years, and a total CO2 reduction of 5 to 10 million tons.

“We have done a lot of research and development work on clean energy financing, in several countries and with several kinds of energy,” said Shilpa Patel, IFC’s manager for Sustainable Business Innovator. “We have been able to establish a business case for clean energy investment, and we are now hoping that private banks will follow our lead and accelerate the effort. There is abundant private sector interest and opportunities for climate-friendly investment.”

In FY2006, IFC leveraged over $1.5 billion in sustainable energy investment through 21 projects, ranging from biomass cogeneration facilities in sugar refineries to waste heat recovery in steel mills and run-of-river hydro and wind power projects. IFC, in collaboration with Global Environment Facility, has programs with local banks in eight countries to support their financing capability for sustainable energy, with commitments of more than $351 million in IFC funds.

About the IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit www.ifc.org.