IFC has been supporting business solutions to climate change since 1989, just a decade after the term was coined in a report published by the U.S. National Academy of Sciences. Our first project was a solar energy investment in China, a precursor to dozens of investments subsequently made all over the globe, from Argentina to Uganda.
Since that time, we have become an innovator of clean energy financial products around the world; an active participant in the carbon market, and more recently a source for pioneering analysis of carbon accounting and climate risks.
In each of the last two years, IFC has invested about $1.7 billion in clean energy and climate-friendly projects, with ambitious goals for substantially increasing this amount in coming years.
Today most of our power investments are in renewable energy projects. And all this has been done without the benefit of an international agreement to constrain the growth in greenhouse gas emissions (GHGs) – a situation expected to continue until at least 2015, creating substantial market uncertainty.
But what is clear is that better coordination, more unified and reinforced action, and common strategies are still needed across the public, private and non-profit sectors to move the global sustainable development agenda forward. Given the scale of investment required, partnerships between governments, civil society and multilateral investment institutions are necessary. This is where IFC plays a role by strengthening these ties and building for the future.
IFC's Climate Business Group was created in September 2010 to not only execute climate-related transactions but to coordinate with units across the IFC on identifying better approaches to resource efficiency. Our work now extends across virtually every aspect of our business and complements the full range of our strategic objectives, including:
Clean energy investments that open markets with first-of-a-kind projects demonstrating technical feasibility, attracting private financing, and encouraging supportive government policy reforms;
Support to local financial institutions, leveraging domestic resources that would otherwise be unavailable for clean energy investments;
Working with governments to promote favorable investment climates for climate-friendly investments;
Developing and promoting innovative financial products that attract greater investment in clean energy;
Helping private sector clients to identify and respond to financial risks of climate change; and
Finding opportunitiesto address both climate change and poverty alleviation such as encouraging low cost energy efficient homes and solar lanterns.
Working together with our clients, donors, and partners, we are creating new models for others to follow. But there is still much more to be done. Moving forward, we want to systematically identify and respond to investment opportunities and climate risk across sectors such as clean tech, water, and solid waste.