Dubai, December 6, 2023 - As part of the Prime Minister of the United Kingdom's 'call for an era of action' at the COP28 Climate Summit on December 1st, the UK Government has announced an expansion of funding for climate projects, including the UK-IFC Market Accelerator for Green Construction (MAGC) Program, to significantly elevate green construction practices in over 20 emerging and developing economies.
This expansion will provide an additional £36m to the program, with £22m destined for capital investments, and £14m for technical assistance, capacity building, and the EDGE Green Buildings Program.
In 2018, IFC and the UK Government's Department for Energy Security and Net Zero (DESNZ, then operating as BEIS) forged a bilateral partnership to combat climate change in developing countries by crowding in public and private sector financing for certified green buildings. Both the UK government and IFC have since offered official endorsement to the Buildings Breakthrough target launched at COP28 this week, which aims to make near-zero emission and resilient buildings the new normal by 2030.
As reported in IFC's recent flagship report, "Building Green: Sustainable Construction in Emerging Markets," the developing world represents a $1.5 trillion investment opportunity in green buildings. Globally, buildings generate 19 percent of energy-related greenhouse gas emissions and consume 40 percent of electricity. The built environment is expected to double globally by 2050, mostly in emerging markets, making it critical to urgently minimize the emissions profile of buildings to avoid locking in higher emissions.
The MAGC program supports IFC financial intermediary clients respond to the opportunities and risks of this changing business environment by providing blended concessional finance and technical assistance to develop growing and profitable portfolios of certified green building investments. The program has already engaged with 17 leading FIs in 9 countries to leverage approximately US$1bn for green construction/retrofit investments.
In addition, IFC's EDGE program of Green Building Certification and MAGC have made a significant impact in many developing markets, with a 13% market penetration rate in South Africa, and nearly 30% in Colombia, with five Colombian banks now offering green finance products. The MAGC partnership has also helped in securing green building portfolio commitments from large conglomerates in the EAP region, with several major companies in the Philippines committing to complete portfolio decarbonization using EDGE. Since 2015, the EDGE program has certified assets valued at over $65 billion and 65 million square meters of floor space globally, including IFC's own $12.2 billion investment in green buildings.
As EDGE and IFC's green building finance program and portfolio continue to grow, IFC welcomes the expansion of this successful partnership on the path towards a decarbonization of the built environment.
About IFC
IFC — a member of the World Bank— is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org
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About EDGE
An innovation of IFC, EDGE helps property developers to build and brand green in a fast, easy and affordable way. EDGE is supported by free software that offers up solutions to reduce energy, water, and the energy embodied in building materials by at least 20 percent. EDGE certification is recognized by the major green finance standards and streamlines green debt reporting requirements. The simplicity and low cost of EDGE, plus its focus on quantifying emission reductions makes it invaluable to map and track a path to zero carbon. The program has been generously supported by the following donors: Austria, Canada, Denmark, ESMAP, EU, Finland, GEF, Hungary, Japan, the Netherlands, and Switzerland. For more information, visit www.edgebuildings.com
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