IFC issues US$1 billion bond for ‘climate-friendly’ projects

IFC, a global development institution for the private sector and a member of the World Bank Group, has issued a US$1 billion green bond which will be used to support IFC “climate-friendly” projects in developing countries.

The three-year bond — which is said to be the largest green bond issue to date — is available to investors around the world. The bond was oversubscribed and has been sized to meet the demand from an increasing number of investors keen to support renewable energy, energy efficiency, and other climate-friendly projects.

“IFC is ramping up its climate-related investments because the private sector can play a leading role in addressing climate change,” said Jingdong Hua, IFC VP and Treasurer. “Through its Green Bond Program, IFC enables large-scale investors to support projects related to climate change in developing countries.”

In IFC’s 2012 financial year, the company invested US$1.6 billion in climate related investments, of which 70% was related to energy efficiency and renewable energy projects. By the 2015 financial year, IFC expects to double the US41.6 billion figure to approximately US$3 billion per year.

IFC green bonds support projects focused on reducing greenhouse emissions. Such projects includes those which involve rehabilitating power plants and transmission facilities, installing solar and wind power, and providing funding for new technologies that result in significant reductions in emissions. To date, IFC has issued about US$2.2 billion in such bonds.

Criteria for the use of IFC green bond proceeds are certified by Cicero, an independent research centre associated with the University of Oslo.  

Maria Kamin, Manager of Environmental, Social and Governance Research at Parnassus Investments, a participant of the green bond, said: "The IFC Green Bond complements our responsible investment strategies. We focus on incorporating environmental, social, and governance analysis into our investment research. By giving investors in the Parnassus Fixed-Income Fund exposure to this unique bond, we can further support climate-related investments and receive a positive financial return".