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Over half of the world’s population lives in urban areas and that number is expected to increase to 68 percent by 2050. The resulting demand for more and more space is expected to double the floor area of buildings by 2060, with most of the growth in residential construction, particularly in middle-income countries.
This unprecedented building boom over the next decades creates an opportunity for cities to turn to green construction, which can spur low-carbon economic growth and create much-needed skilled, green jobs. IFC estimates that investment in green buildings in emerging market cities will reach US $24 Trillion over the next decade alone.
Investing in green construction improves efficiency, which reduces costs as well as greenhouse gas (GHG) emissions in homes, hospitals, commercial real estate, warehouses, and airports. IFC helps financial institutions scale business in green mortgages and green construction finance by working with financiers, governments, developers, and building owners.
IFC is also setting universal standards for green construction with EDGE (Excellence in Design for Greater Efficiencies), a software application and certification system for green buildings now used in nearly 140 countries. EDGE helps developers design low emission, cost-efficient green buildings. Projects that achieve a 20 percent projected reduction in use of energy, water and embodied energy in materials compared to conventional buildings are eligible for EDGE certification.
In fiscal year 2020, IFC financed $3.3 billion dollars for climate projects, which represents 30 percent of IFC’s total commitments, and also mobilized $3.5 billion for climate projects from other investors. These investments were spread across 111 transactions, with 37% of them in the poorest countries in the world.