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IFC, Finland join forces to spur private sector financing for climate change

The new partnership will identify and develop innovative projects to be supported by the Finland-IFC Blended Finance for Climate Program and will help IFC undertake early-stage project development activities in new areas, such as battery storage. 


IFC Finland
Updated: 12-10-2018 10:28 IST
IFC, Finland join forces to spur private sector financing for climate change

The Finland-IFC Blended Finance for Climate Program, launched in October 2017, implements climate-mitigation investments in renewable energy, energy efficiency, green buildings, climate-smart agriculture, and forestry. (Image Credit: Pixabay)

IFC, a member of the World Bank Group, and the government of Finland have joined forces in a new partnership to spur private sector financing for climate change solutions in low-income countries and in fragile and conflict situations.

The new partnership will identify and develop innovative projects to be supported by the Finland-IFC Blended Finance for Climate Program and will help IFC undertake early-stage project development activities in new areas, such as battery storage.

"Finland is committed to finding concrete and scalable solutions to the most pressing global challenges, of which climate change is the most urgent one," said Anne-Mari Virolainen, Finland's Minister for Foreign Trade and Development. "These early-stage project development efforts, including piloting new technologies such as battery storage and wave energy or studying the feasibility of new business models such as innovative financing for forestry or biodiversity, will help IFC identify technological solutions and opportunities that would otherwise be a missed opportunity."

The Finland-IFC Blended Finance for Climate Program, launched in October 2017, implements climate-mitigation investments in renewable energy, energy efficiency, green buildings, climate-smart agriculture, and forestry. The new program will also seek investments that support developing countries in their efforts to adapt to the effects of climate change, such as creating risk-sharing facilities to provide financial protection following natural disasters from climate change-related events. The aim of the program is to help IFC move ahead with innovative and high- impact climate projects.

"At IFC we have ambitious goals for our climate business—to boost investments even further and to open new markets at the technological frontier," said Hans Peter Lankes, IFC's Vice President for Economics and Private Sector Development. "Effective and efficient use of blended concessional finance is a key tool to help achieve these ambitions, and we welcome our continued partnership with the government of Finland to catalyze private sector investments and secure impact through climate change solutions."

The Program builds on IFC's experience in blended finance, which uses development-partner funds alongside its own—and its clients' commercial financing—to catalyze private sector investments. IFC has played a leadership role in blended concessional finance in partnership with 22 Development Finance Institutions (DFIs) focusing on the private sector and has adopted the DFI Blended Concessional Finance Enhanced Principles.

IFC has also been instrumental in advancing climate solutions led by the private sector. Since 2005, IFC has invested $22.2 billion in long-term financing from its own account and mobilized an additional $15.7 billion through partnerships with investors for climate-related projects. In the fiscal year that ended June 30, 2018, IFC's climate-related investments for its own account stood at $3.9 billion. In addition, IFC mobilized $4.5 billion from other investors, reflecting a growing appreciation that climate-smart agribusiness, green buildings, smart cities, clean energy, and green bonds represent areas of opportunity for investing.

COUNTRY : Finland

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