Through our work in trade finance, IFC is helping promote cleaner power generation. © Martín Edwards / SunEdison
The effects of rising temperatures, such as shifts in rain patterns and food shortages, threaten to put prosperity out of reach for millions of people in developing countries.
Everyone has a part to play in mitigating the effects of climate change, from individuals to communities, from governments to the private sector.
IFC believes that banks too can play a critical role in addressing this challenge. In addition to investing directly in climate-related projects, we work with financial institutions to guarantee the trade of goods and services that enable their corporate clients to adopt energy-efficient technologies, cut carbon emissions, and ensure the sustainability of their operations and their supply chains.
We do this through our Climate-Smart Trade Program, an extension of our award-winning Global Trade Finance Program that is focused exclusively on climate-related projects. Since 2010, IFC has supported more than $2.4 billion in trade deals, backing the import of equipment and projects that have clearly defined climate benefits.
In the fiscal year ended in June 2015, IFC supported about $440 million in climate-smart trade. We helped a wide range of projects, including in fragile countries, with particular focus on the generation of clean energy—a key area for economic growth and job creation.
IFC supported the import of $30 million in equipment for a new wind power plant in Pakistan, a country that has faced severe power deficit in the past few years, with daily blackouts hindering industrial growth and adversely affecting the quality of life for millions. As part of this deal, IFC issued a guarantee to Deutsche Bank to back a letter of credit issued by Bank Al Habib. This allowed Yunus Energy to import a wind power turbine from Nordex Germany.
In Georgia, an IFC guarantee issued through our equity investee Bank of Georgia, supported the design, manufacturing, and commissioning of turbines for the Stori Hydropower Project, located in the remote Kakheti region. Georgia has a national program to develop small-scale, environmentally-sustainable local hydropower projects, to meet local energy needs and export surpluses to neighboring countries. The equipment was manufactured by Andritz Hydro in Austria, and Societe Generale France acted as the confirming bank partner.
In Honduras, we worked with Banco Financiera Centroamericana, S.A. (FICENSA) to support the import of more than $5 million in solar panels from Canada to a local project. With a total capacity to generate 52,000 kilowatts of energy, the project will contribute to Honduras’ plan to meet 60 percent of the country’s energy demand from renewable energy sources by 2022.
Eligible goods for the Climate-Smart Trade Program include: