ALP's EDGE-certified warehouses in Kenya
Climate is a strategic pillar for IFC and the World Bank Group. A recent IFC study reports that there are $23 trillion worth of climate-smart investment opportunities in emerging markets. Financial institutions will need to provide the majority of the capital for these opportunities to enable us to transition the global economy, at the required speed, to keep us within a 2⁰C-warmer world.
IFC partners with financial institutions to deploy capital, mostly in the form of loans to businesses. These loans help businesses and other organizations to implement climate-friendly projects that reduce global greenhouse gas (GHG) emissions while supporting the bottom line.
As of March 2020, IFC's progress on assisting client financial institutions in expanding their climate portfolios is as follows: We have committed $7.5 billion from our own account and mobilized an additional $3.6 billion through our work with more than 200 partnering emerging-market financial institutions. These investments support partners in avoiding GHG emissions of 14.2 million tons per year. Through IFC’s advisory engagements, our client financial institutions have built climate finance portfolios of $26.2 billion, avoiding annual GHG emissions of 84.4 million tons. This is the equivalent of taking approximately 17 million cars off the road every year, or of erasing the annual emissions of a country the size of Greece or Morocco.
We estimate that financial institutions must grow the share of climate-friendly projects in their portfolios from an average of approximately 7 percent in 2016 to 30 percent by 2030. In dollar terms, that equates to an increase from approximately $1.5 to $13.4 trillion, a growth opportunity too big for banks to miss.
For our part, IFC has committed to growing our climate-friendly portfolio to an average 35 percent of our total portfolio between 2021 and 2025. To support this investment, we continually develop new products. Our two decades of experience includes providing climate finance via the following products:
Our client financial institutions often become climate-finance leaders in their local markets. We coach them in identifying climate-friendly investment opportunities and provide business-development support, including:
Our Climate Definitions help clients and partners understand which projects can be labeled "climate-friendly." Financial institutions most frequently finance projects in the following categories:
These strategic initiatives show how IFC is expanding our impact:
The impact of IFC's climate-finance clients:
*Data as of March 2020