IFC Green Bond Program Raises $4.4 Billion for Climate-Smart Investments in Emerging Markets
IFC, a member of the World Bank Group, recently issued a $500 million three-year green bond to support climate-friendly investments in developing countries. The new issuance brings the total raised under IFC’s Global Green Bond Program to $4.3 billion over the past five years.
IFC will use the proceeds to support investments in renewable energy, energy efficiency, and other areas that reduce greenhouse emissions. Between July 2014 and June 2015 alone, 38 investments received green-bond financing. These investments are expected to reduce greenhouse emissions by the equivalent of 2.5 million metric tons of carbon dioxide per year—a result similar to taking 500,000 cars off the road, according to IFC’s Green Bond Impact Report, which was released today
“Green bonds can play a powerful role in mobilizing international savings for climate finance, thereby reducing greenhouse gas emissions,” said Jingdong Hua, IFC Vice President and Treasurer. “IFC will continue bringing greater diversity, liquidity, and transparency to strengthen this important asset class.”
IFC issues green bonds in various structures and currencies—including Chinese renminbi, Indian rupee, Japanese yen, and U.S. dollars. This includes two benchmark $1 billion issues in 2013 that set a precedent as the largest green bonds in the market at time of issuance and helped solidify the market.
IFC’s latest bonds were denominated in U.S. dollars and listed on the London Stock Exchange. The bonds received overwhelming support from investors focused on promoting socially responsible investment. Some of the investors who participated are Bank Indonesia, BlackRock, California State Teachers Retirement System (CalSTRS), Citibank Treasury Investments, Deutsche Asset Management NY, Praxis Mutual Funds, Plan Ibercaja de Pensiones Sostenible y Solidario, Morgan Stanley Private Wealth, Nordic Investment Bank, Pictet et Cie, Resona Bank Ltd, Santander UK plc, Seelaus R & Co., State Street Global, TIAA-CREF Asset Management and United Nations.
Nikhil Rathi, CEO, London Stock Exchange plc & Director of International Development, London Stock Exchange Group, said:” We are committed to establishing London as the world’s leading centre for green finance – an exciting new asset class commanding global attention. London Stock Exchange is a world leader in green bond listings with the most comprehensive offering of any international exchange. We have been delighted to welcome IFC green bonds in a range of currencies including RMB, INR and now USD. Today’s successful listing demonstrates London’s unparalleled ability to attract significant capital to green projects and investment in developing countries.”
Ashley Schulten, Director, BlackRock, said: “Impact reporting is increasingly prioritized among issuers in the space and we are pleased with the progress we see on IFC’s Green Bond program.”
Benjamin Bailey, Senior Fixed Income Manager, Praxis Mutual Funds, said: “We deeply value the diligence that IFC has used to construct their Green Bond program. Our goal is to purchase investments that benefit the climate and the community. These deals actually do both.”
“Public funds alone cannot meet the enormous climate finance gap needed to help countries mitigate the effects of the climate change and adapt. Therefore, innovative and replicable business models like green bonds are critical for leveraging the resources of the private sector for a transition towards low-carbon and resilient development,” said Christian Grossmann, IFC Director for Climate Change.