Financial Markets

Climate change affects people in developing countries because they often have limited or unreliable access to energy. This is why sustainable energy finance provided by local financial institutions is critical for small and medium sized companies that want to grow in an environment characterized by depleting resources. Local financial institutions have the capacity to channel IFC funding for clean energy investments to smaller clients such as MSMEs and bottom-of-the-pyramid borrowers that IFC cannot reach directly. IFC's approach combines financing with targeted advisory programs and supports the business growth of our FI clients by helping them to expand their portfolios and enter new market segments.

Investment products include customized credit lines for energy efficiency upgrades and clean technology investments, and mezzanine finance for smaller renewable energy projects. Advisory interventions include technical capacity building for local FI's to help them identify and develop sustainable energy projects, and awareness raising and pipeline development support to local market players such as energy service companies, equipment vendors, consultants and government regulators.

In fiscal year 2010 a total of US$ 455 million in SEF projects were committed through FI’s. Renewable energy projects accounted for US$ 220.6 million and EE projects made up US $ 224.58 million. About half of all deals were booked through the Global Trade Finance Program (GTFP). See IFC's Sustainable Energy Finance Strategy in Action.