To confront the challenge of fostering climate resilience, economies must become climate-smart. IFC is mainstreaming climate business across sectors, focusing on clean energy, green finance, green buildings, climate-smart cities, and climate-smart agribusiness.
In FY19, we met our climate target, providing $5.8 billion in climate-smart financing, including $3.2 billion mobilized from other investors. This accounted for 30 percent of our total commitments for the year. Our investments have helped avoid the emission of 15.5 million tons of carbon dioxide equivalent.
IFC helps agribusiness companies become more productive by using climate-smart technologies and practices in high-emission sectors such as fertilizer. In India, we put together a $60 million package for Deepak Fertilisers and Petrochemicals Corporation Limited to help the company install nitrous oxide abatement facilities. IFC will also support the company to implement an environmental and social action plan.
Green buildings continue to be a priority. IFC’s Excellence in Design for Greater Efficiencies (EDGE) program now covers more than 150 countries to certify green buildings. EDGE creates an attractive investment opportunity for IFC and other banks. In five years, IFC’s investments in green buildings rose from $160 million to $761 million for both IFC’s own account and mobilized capital. One of these investments is a loan package of $275 million to support PT Trans Corpora in Indonesia to open 125 green retail stores across 25 cities by 2025. PT Trans Corpora is expected to create more than 30,000 jobs and work with more than 6,000 suppliers, nearly 70 percent of whom are small and medium enterprises (SMEs).
Renewable energy remains a significant part of IFC’s climate investments. IFC invested $2.4 billion in FY19 and is increasingly working upstream to open markets for new technologies. We partnered with the World Bank’s Energy Sector Management Assistance Program (ESMAP) to explore new markets for offshore wind and floating solar photovoltaics. We are also working with companies and regulators to scale storage markets in emerging economies, enabling more renewable energy to enter the grid.
Green bonds are a key way of providing long-term capital to issuers to drive climate business. IFC issued 37 green bonds totaling $1.6 billion in 11 currencies. This included a Sterling green bond of 350 million British pounds in July 2018 — the first such bond to be issued by a multilateral development bank since 2015. In Indonesia, IFC issued an inaugural Indonesian rupiah Komodo green bond that raised the equivalent of $134 million. We also issued our first Colombian peso-denominated green bond of 35 billion Colombian pesos ($10 million equivalent) that was placed in the offshore market.
IFC is also building the market by investing in green bonds issued by financial institutions and other companies. IFC committed $150 million in a green bond issued by Indonesia’s Bank OCBC NISP, contributing to the government’s target of a 29 percent reduction in greenhouse emissions by 2030. In Thailand, IFC became the sole investor in TMB Bank’s $60 million green bond. This is the first green bond issued by a commercial bank in Thailand. IFC also created the first global green bond fund targeting corporate issuers in emerging markets, the Real Economy Green Investment Opportunity (REGIO) Fund. It is expected to catalyze at least $500 million in private capital to support climate-smart investments in developing countries.
IFC is increasingly building climate risk considerations into our business and sharing lessons globally. We piloted climate risk assessment in FY19. IFC and the World Bank act as the Secretariat for the Carbon Pricing Leadership Coalition, which works with governments, corporations, and civil society to advocate for effective ways to price carbon. IFC discloses under the guidelines recommended by the Task Force on Climate-related Financial Disclosures (see page 104).