THE International Finance Corp. (IFC) said it has organized a facility that will put up 30% of the funding for projects supported by financial institutions, as a means of encouraging private investment.
The IFC targets a 30% increase in climate lending by financial institutions as well as near-zero exposure to coal projects by 2030, and thus calls its loan facility “30 by 30.”
The 30 by 30 program ”aims to help financial institutions, especially banks, better incorporate green finance strategies into their investment plans, reduce climate risk, and ultimately cut greenhouse-gas emissions (GHG),” it said in a statement on Thursday.
The program was developed with the World Bank, and will receive financing from the German government-backed International Climate Initiative.
“Achieving (the Philippines’) climate targets requires massive financing, which cannot be met by the public sector alone. Private financing is therefore crucial,” IFC Country Manager for the Philippines Jean-Marc Arbogast was quoted as saying in the statement.
“The financial sector, especially commercial banks, can play a key role in greening the economy by addressing climate-related risks, promoting sustainable development, and decarbonizing industries through financing,” he added.
Initially launched in the Philippines with microfinance organization CARD SME Bank, the program aims to eventually expand to Egypt, South Africa, and Mexico.
The partnership with CARD SME Bank is projected to benefit over 3,000 farmers by improving their capacity to finance climate-smart agricultural solutions starting in October.
The IFC and Berlin-based Renewables Academy will also offer scholarships starting in November.
The IFC has invested in Philippine climate bonds, starting with $150 million put into the first green bond issued in the Philippines, by BDO Unibank, Inc. in 2017.
“This was followed by several first green bonds of issuers that were also supported by IFC in 2018 and 2019. In April 2022, IFC supported BDO’s first blue bond to help tackle marine pollution and preserve clean water resources,” IFC said, adding that it plans to do the same through the 30 by 30 program.
For 2022, the IFC has committed $32.8 billion to private companies and financial institutions in developing countries.
On Sept. 14, the IFC is due to host a Philippine Climate Forum. — Diego Gabriel C. Robles