Advancing Sustainable Production of Construction and Other Base Materials

IFC is advancing the production of sustainable construction and other base materials in low- and middle-income countries. By financing private sector solutions, we support local production of affordable, lower-carbon-footprint materials such as steel and cement, critical for development of infrastructure such as housing, roads, bridges, and other critical needs for industrialization.

Contributing to the development of competitive, resilient, and sustainable supply chains in emerging markets is a key priority of the IFC. We partner with manufacturers to enhance domestic production capabilities, which promotes self-reliance, mitigates supply volatility and price vulnerability, and scales technology adoption.

The construction materials sector is a pivotal employer, intricately connected to local, regional, and global value chains of various industries (for example, construction, infrastructure, renewable energy, automotive/transportation, electronics). Recognizing its importance, IFC customizes financial solutions and provides advisory services to support innovation and sustainability, including the adoption of global best practices.

By fostering the reduction of carbon emissions, including the development and adoption of decarbonization technologies such as carbon capture and green hydrogen, IFC helps this sector — which includes hard-to-abate sub-sectors such as cement and steel that are significant greenhouse gas emitters — to reduce their impact on the environment, while helping create new jobs and expand economic opportunities.

IFC’s engagement with the sector dates back to 1969, when we committed $22 million to the Siam Cement Group to support the expansion of Thailand's construction materials industry.

IFC’s Work in Action

In recent years, IFC has continued to support the sustainable development of the sector through sustainability linked investments such as:

• a $150 million financing agreement with Votorantim Cimentos, a Brazilian building materials and sustainable solutions company, signed in July 2023, 
• a EUR75 million anchor investment in the first green bond issuance by voestalpine AG, a global leader in steel processing and production, signed in September 2024. 
• a US$160 million sustainability-linked loan to NSG to finance capital expenditures and research and development across its glass manufacturing operations in Poland and the UK. The investment will support the upgrade and expansion of NSG’s production facilities while strengthening R&D capabilities in Merseyside. The loan is tied to specific ESG performance targets, ensuring that the company’s operational growth aligns with improved environmental and social outcomes.

With global construction spending alone, expected to grow at a CAGR of 3.2%  between 2023 and 2040, IFC’s investments in the sector are crucial to support the growth and transformation required to meet the demands of the world’s growing population and achieve net-zero targets.