Submitted by International Finance Corporation
'ASHINGTON, D.C. - October 19, 2007 - IFC and its donor partners called today for an aggressive approach to leveraging private sector capital and innovation against climate change when they met during the World Bank-IMF Annual Meetings.
IFC management and representatives from donor countries agreed that the private sector can play a greater role to mitigate the impact of climate change and that IFC can catalyze this potential by supporting market-based solutions, encouraging public-private partnerships, and raising awareness with private companies. The groups met at an annual donor breakfast hosted by IFC.
"Climate change is a threat to economic development, and developing countries are especially vulnerable," said Lars Thunell, IFC Executive Vice President and CEO. "The private sector can do more, and IFC, in partnership with donor countries, can lead the way in creating new financial tools and other market-based solutions to climate change."
"The impact of climate change on private sector growth is not yet fully understood, especially at the firm level," said Rachel Kyte, IFC Director of Environment and Social Development. "IFC is exploring how it can help its client companies move to less carbon-intensive growth and looking at what additional standards financial institutions can use to drive best practice among their clients."
During the meeting, IFC presented a first outline of its climate change strategy, which will be an integral part of the World Bank Group's strategy. IFC aims to create a new methodology to measure the impact on climate change of its entire investment portfolio. IFC also intends to help its clients assess their climate change vulnerability and to look at the ways private companies in emerging markets can adapt.
The World Bank Group is expected to present its climate change strategy in early 2008. In FY07, IFC supported 27 projects that had a substantial renewable energy or energy efficiency investment component. The total amount of clean energy investment represented by these projects was $2 billion. This included $1.4 billion in renewable energy investment and $586 million in energy efficiency investments. Of these amounts, IFC invested $294 million in renewable energy and $183 million in energy efficiency for our own account (on a prorated basis). The total is $477 million.
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC's vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services.
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