IFC's aim is to make use of leasing to counter the lack of access to capital needed to purchase sustainable energy equipment that would be used for energy efficiency, renewable energy, and cleaner production.
Leasing can be an effective channel for tackling the critical global challenges of climate change and food security by supporting investments in energy efficiency, renewable energy, cleaner production, and agribusiness equipment. Leasing is a powerful product to provide SMEs with much needed term-financing to invest in productive and logistic equipment. It enables SMEs to leverage an initial cash deposit with the inherent value of the asset being purchased, acting as collateral. Leasing is particularly effective in emerging economies where SMEs provide strong growth and employment opportunities, but lack access to term financing due to a limited development of capital markets and the banking sector.
In line with IFC’s objective to increase the development impact of leasing through innovation, IFC advanced its efforts to support climate change by working on a leasing and ESCO project in Thailand with support from Japan. The project aims to ramp up lease/ESCO activities as part of an effort to reduce greenhouse gas emissions by exploiting new market opportunities.
It is expected that climate change mitigation efforts, together with the agribusiness sector, will play a key role in lease market growth going forward.
The Global Leasing Toolkit, developed by IFC with support from Japan, has been very well received by stakeholders. The Toolkit aims to guide financial institutions in providing lease financing to SMEs and helps facilitate IFC’s innovative approach, particularly in climate change, food security and Islamic finance. It will continue to play a key role as IFC focuses on working with and through financial institutions to increase sustainable lease services to SMEs. As part of these efforts, IFC also organized a sustainable energy finance conference in Beijing and an agribusiness sector conference in Bangkok, which allowed a broad range of stakeholders to share knowledge and experiences and explore innovative solutions to reduce adverse climate change and increase food security.
For more information on IFC's work in Leasing, please see our Financial Markets pages.