Friday, 24 July 2009
International Finance Corporation (IFC), a member of the World Bank Group, reached a historic milestone in fiscal 2009 when more than half the power sector projects financed were in the renewable energy sector.
Addressing the potential impacts of climate change is a strategic corporate priority for IFC, and promoting renewable energy generation is a key component for realizing this goal. Over the past three years, IFC has channeled more than US$1 billion to renewable energy projects. Most of that was financed in FY09, which ended in June 2009, when IFC helped finance a record 12 renewable energy projects.
"Despite the difficult financing environment, FY09 proved to be the year of renewables," said Dana Younger, Renewables Adviser in IFC's Infrastructure Department.
During FY09, IFC provided financing for its first three greenfield wind projects in Bulgaria, Chile, and Turkey, which together will generate more than 500 megawatts of power. IFC also secured approval from the trust fund committee of the World Bank-administered Clean Technology Fund for a US$15 million contribution to a 68-megawatt wind project in Mexico—IFC's first financing under the CTF and the CTF's first private sector allotment.
IFC is supporting the entire value chain in solar power to promote the rapid scaling up and cost reduction occurring globally in the sector. IFC's made its first investment in solar photovoltaics manufacturing in China, which now supplies roughly 25% of the global market. IFC also financed a geothermal project in the Philippines in FY09, made commitments to two private equity funds targeting clean energy in Asia, and entered into two risk-sharing co-financing agreements with commercial banks.
On the regulatory front, IFC is working closely with the World Bank to encourage countries to implement frameworks that stimulate investment in renewables. "An attractive regulatory environment is essential for countries to draw investors to the renewable energy sector," Younger said.
Using trust funds supplied by the Dutch government, IFC has helped clients address regulatory issues that inhibit development of renewable energy. A recent example is IFC's support to Bolivia to help the country prepare a national wind atlas.
IFC creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. IFC's new investments totaled US$16.2 billion in fiscal 2008, a 34% increase over the previous year.
