Climate Change Funding Stimulus for Developing Economies

IFC (International Finance Corporation), a member of the World Bank Group, is joining forces with the government of Finland to stimulate private sector financing for climate-change solutions, especially in low-income countries.

The Finland-IFC Climate Change Program includes a €114 million contribution from Finland, building on commitments made in the historic 2015 Paris Agreement on climate. It is expected to include climate-mitigation investments in energy efficiency, renewable energy, green buildings, climate-smart agriculture, and forestry. The program will also seek investments that support developing countries’ efforts to adapt to the effects of climate change.

Kai Mykkänen, Finland’s Minister for Foreign Trade and Development. said: “Climate change is clearly the defining challenge of our generation—to meet a challenge of this scale and urgency, we need significant private investments in areas where they are not seen today.

“Finland is proud to become IFC's first European partner in blended climate financing. Our goal is to make a significant contribution to filling the investment gap in low-income countries.”

IFC CEO Phillipe Le Houérou. commented: “Trillions of dollars are needed for the world to transition to a low-carbon economy. This represents a significant investment opportunity for the private sector. But it requires a coordinated approach by governments and businesses—to remove barriers to the adoption of low-carbon technologies, strengthen policy and regulatory frameworks, and overcome investor perceptions of high risk. Our partnership with Finland is an important step toward those goals.”

The Finland-IFC Climate Change Program will help IFC move ahead with innovative, early-stage climate projects. It will build on IFC’s experience of using development partner funds alongside its own and its clients’ commercial financing in the form of blended finance, to catalyse private sector investments. The support from the government of Finland will be crucial for IFC to meet its ambitious targets to double its climate-focused investments over the next five years. 

Source: IFC. Picture of Government of Finland's Foreign Trade and Development Ministry by Matti Paavonen, reproduced under CCL.

Friday 13th October 2017

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