GREEN BOND IMPACT REPORT Financial Year 2021 ABOUT IFC IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org. On the cover: Recycled plastic pellets collected from the sea 2 GREEN BOND IMPACT REPORT Table of Contents FY21 Highlights   4 A Letter from the Treasurer   6 IFC Climate Business Overview for FY21   8 Meet IFC’s New Climate Business Director   10 Spotlight on the Paris Agreement: What does it mean for IFC?   11 Client Story: Riding the Blue Wave   13 Client Story: Building a Greener Future   14 Client Story: Sweet Smell of Success   17 IFC Green Bond Program Overview for FY21   18 Accelerating Impact: Green Bonds in Emerging Markets   21 IFC Green Finance Market Engagement   23 IFC Green Bond Eligible Project Commitments   25 Green Bond Eligible Project Commitments for FY21   27 Appendix A: Voices & Perspectives   33 Appendix B: IFC Green Bond Program Process   36 Appendix C: IFC Impact Reporting Approach   38 Appendix D: IFC Green Bond Commitments Reconciliation   40 GREEN BOND IMPACT REPORT 3 FY21 Highlights 15 projects committed across 7 sectors 6 green bonds BIOMASS SOLAR ENERGY WIND ENERGY TRANSPORT totaling $165.8 MILLION in 2 currencies GREEN GREEN CIRCULAR BANKING BUILDINGS ECONOMY Reduce greenhouse Produce 5.4 gas emissions by 12.6 MEGAWATT HOURS METRIC TONS of CO₂- of renewable energy equivalent per year Sufficient to charge over invested in IFC 465,000 smartphones Equivalent to greenhouse gas green bonds in FY21 emissions from 3 passenger vehicles driven for one year is expected to1: 4 GREEN BOND IMPACT REPORT 1 For illustration purposes only and not guaranteed FY21 green bonds Cumulative FY10–FY21 green bonds are expected to… Highlights are expected to… FY10–FY21 REDUCE greenhouse gas emissions REDUCE greenhouse gas by 2 million metric tons of CO₂- 178 green bonds emissions by 23.9 million metrics equivalent per year totaling $10.5 BILLION tons of CO₂-equivalent per year Equivalent to CO₂ emissions from in 20 currencies Equivalent to CO₂-emissions from 2.6 billion 4.8 million barrels of oil consumed gallons of gasoline consumed 235 projects committed totaling PRODUCE 898,844 megawatt hours PRODUCE 26,352,287 megawatt $9.4 BILLION of renewable energy hours of renewable energy Sufficient to power the Turks and Caicos Islands Sufficient to power Papua New Guinea for one year for one year CONSTRUCT 273 megawatts of CONSTRUCT 9,453 megawatts of renewable renewable energy capacity energy capacity SAVE 115,161,121 kilowatt hours of SAVE 864,611,239 kilowatt hours of annual energy annual energy Equivalent to over 111,299 U.S. homes electricity use for one year Equivalent to CO₂ emissions from over 90 million pounds of coal burned GREEN 598,685 square meters of buildings Equivalent to the Pentagon, the world’s largest office building which houses 26,000 personnel and has a total of 17.5 miles (28.2 km) of corridors GREEN BOND IMPACT REPORT 5 A Letter from the Treasurer The recent report from the Intergovernmental This has become even more of a focus for us over Panel on Climate Change makes the stakes all the last year. FY21 marked the milestone of a too clear: without immediate action, the decade of our Green Bond Program. We reviewed impacts of climate change will grow only more it with the objective of enhancing it as we devastating in the years ahead. And it is the commence the next decade of the Program. We world’s most vulnerable people—those who renewed the Second Party Opinion from Cicero have contributed the least to climate change— and upon their assessment, our governance that will suffer the most from its effects. Left procedures were found to be excellent. unchecked, the climate crisis could push 132 Amid the ongoing pandemic, the need for green million people into poverty over the next ten investments remains crucial. Our strategy, within years. IFC Treasury & Syndications, is to build on being Addressing this issue is our generation’s greatest a multifaceted participant in the green finance John Gandolfo challenge—a global responsibility that requires market way beyond our green bond issuance IFC Vice President and Treasurer collective effort. At the World Bank Group, we program. We see great value in providing know that if we don’t do our part to limit global technical assistance and capacity building to warming, we will never succeed in our mission those beginning their sustainable finance to end poverty and build shared prosperity in journeys and the continued education of developing countries. Our new Climate Change investors in this regard. The IFC–Milken Action Plan recognizes this and aims to deliver Institute–George Washington University Capital record levels of climate finance to developing Markets Program is one of the channels where countries—reducing emissions, strengthening we work to empower capital market participants adaptation, and aligning investments with the with the skills needed to develop capital markets goals of the Paris Agreement. and embed sustainability in financial systems across the emerging markets. I am personally committed to doing what I can to keep the planet sustainable for We must dramatically scale-up investments in generations to come. IFC is staffed with sustainable finance in this decade, and green colleagues who similarly feel strongly about our bonds can help us get there—offering an role in combatting this existential challenge. We important avenue to raise funding in large recognize that the private sector needs to play a volumes. IFC Treasury & Syndications is critical role in the fight against climate change committed to being a lamplighter to the green and we need to green the financial system. path ahead. 6 GREEN BOND IMPACT REPORT GREEN BOND IMPACT REPORT 7 IFC Climate Business Overview for FY21 The recently published report1 from the economic opportunity that can promote Core to IFC’s Climate Business is assisting Intergovernmental Panel on Climate growth, create jobs, and accelerate the our private sector clients to make these Change (IPCC) describes climate change as transition to low-carbon development. opportunities viable through our advisory, widespread, rapid and intensifying. It shows IFC’s research shows that climate business investment and blended finance offerings. that changes already set in motion, such as sea can generate $23 trillion in investment In addition, we actively work with partners level rise, could be irreversible over hundreds to opportunities, create 213 million cumulative including emerging market governments thousands of years. Stabilizing the climate will jobs, and achieve 4 billion tons of CO2 and public sector bodies to catalyze finance require immediate and sustained reductions in equivalent reduction in developing for climate action. greenhouse gas emissions. countries. These opportunities exist in a wide range of sectors, including climate- Climate change poses a significant risk to smart agriculture, urban infrastructure, business, but climate business is a major renewable energy and more. Our strategy IFC’s climate business aims to support our clients’ transition to a low-carbon future. Our support helps identify low-carbon investment opportunities through industry sector experts, metrics specialists, finance professionals, and strategists. It also supports analysis of climate risk through tools such as carbon pricing and assessment of physical climate risk in investment projects. IFC uses a wide toolkit of approaches to generate investable opportunities, from policy reforms to project development, working closely with the rest of the World Bank Group to create the regulatory and policy environment that can attract private investors. IFC invests in climate-related projects such as renewable energy and energy efficiency, sustainable agriculture, green buildings, waste management and private sector adaptation to climate change. We are also scaling up our efforts to develop capital markets and mobilize much needed private capital to green emerging markets. 1 “Climate Change 2021: The Physical Science Basis” 2 The following numbers are own account and do not include core mobilization. 8 GREEN BOND IMPACT REPORT The Impact of IFC Climate Business in FY21 $7.6 billion combined mobilization and own account investments 12 million metric tons in annual GHG reductions 126 projects 32% of IFC’s total own account investments in FY21 (equaling $4 billion) were climate-related, plus $3.6 billion through core mobilization efforts 90¢ mobilized from other investors for every dollar IFC invested $32 billion in own account climate-smart finance investments from FY05 through FY21, plus $26 billion mobilized GREEN BOND IMPACT REPORT 9 Meet IFC’s New Climate Business Director Samer: Vivek, how did you land at IFC? Marsha: Can you share an example of the Vivek: I have a background in banking and work you are focused on? spent many years working in Asia. In the early Vivek: Climate and sustainability make great nineties, I was working in one of the “Asian business sense. Take green buildings—the area tiger” countries where everyone wanted to where we’ve built a large portfolio in Asia. invest because it was a hot market. But after The upfront cost of a green building is higher the financial crisis hit, most banks decided to compared to conventional real estate, but after exit the market amid the chaos. After that two or three years it takes to recoup the costs, experience, I decided I’d rather work for an you’d have a building that generates much higher organization with some staying power that can revenue because it uses less electricity and water, be really there for its clients when the chips are and you’d also own a more valuable asset. At the start of the year, Vivek down. That’s how I found IFC. Twenty-three Pathak was appointed as IFC’s Sophie: What would you like to see happen years later, we’re still going strong. new Director for Climate Business, at COP26 this year? succeeding Alzbeta Klein. During a Samer: And what were some of the Vivek: I’d like more countries to commit to coffee chat with the millennials from highlights of these 23 years? practical and achievable Nationally Determined the Funding & Investor Relations Vivek: Through my work in the credit Contributions (NDCs) that will drive their team, Vivek spoke about his department, I developed a broad-based view efforts to reduce emissions and adapt to the impressive career path in Asia and of our work in many different sectors and effects of climate change. To a large extent, his views on IFC’s climate business countries, and I saw first-hand the difference NDCs are going to shape our environment, for the years ahead. that we were making on the ground. Asia will and we can work with our clients to help them always have a special place in my heart because meet their goals on this journey. I got to know the region very well when I was Sophie: So, what’s next for climate at IFC? a regional director. But it also prepared me for Vivek: I would like this team to become a business the next challenge—when I saw the region’s development engine for our operations. We can financial and banking industry in places like make that happen by talking to our clients to China, Korea, Singapore and Thailand grow and help them decarbonize and think through new excel, I had to dig deep to find a comparative opportunities and new products that the climate advantage IFC can offer. For me, the answer business offers. Climate is going to become was sustainability—and that’s what led to my Samer Ibrahim, Sophie Peeters, and central to most of what we do, and it’s going to current dream job at the Climate Business Marsha Sneh Monteiro (clockwise) from become much more critical, so I’m happy to be Department. the Funding & Investor Relations team here and look forward to the challenge. 10 GREEN BOND IMPACT REPORT Spotlight on the Paris Agreement: What does it mean for IFC? Recently, the World Bank Group Board the operationalization approved the Climate Change Action Plan of the Paris Agreement. (2021—2025) that outlines the institution’s The MDBs’ approach is collective response to align financial flows based on six ‘building with the goals of the Paris Agreement blocks’ representing (referred to as “Paris Alignment”). The the core areas for Paris Agreement requires that we hold the alignment, of which increase in the global average temperature building blocks 1 (BB1) to well below 2°C above pre-industrial levels and 2 (BB2) are about and pursue efforts to limit the temperature alignment of operations increase to 1.5°C above pre-industrial levels. with the mitigation It recognizes that countries have different and the adaptation circumstances and gives countries latitude in and resilience goals of the pathways they choose to achieve low- the Paris Agreement, carbon, resilient development. respectively. An assessment of Paris Alignment IFC is implementing determines whether an activity advances, the building blocks hinders or is neutral to achieving the relevant to financing goals of the Paris Agreement. Paris alignment whereby we Alignment requires IFC to provide support will incorporate financing to clients that is consistent with low- and technical support to carbon and climate-resilient development clients to ensure that it is pathways, aligned with the objectives of consistent with pathways toward low-carbon To achieve this objective, IFC has started the Paris Agreement, and consistent with and climate-resilient development. As a result, to align 100% of its projects at the concept client countries’ National Determined IFC has set an objective of aligning 85% of stage. IFC’s Climate Business Department Contributions (NDCs), long-term strategies Board-approved real sector operations to be is leading the implementation for Paris or other national climate commitments. Paris Aligned by July 1, 2023, and 100% of the Alignment at IFC. We will also continue to business by July 1, 2025. Once a methodology update our investor community on how IFC Equally, other multilateral development for financial institutions and funds is finalized continues to progress in the future. banks (MDBs) are working together to among MDBs, a similar approach will be taken develop a joint approach which constitutes for this business. the concrete and ongoing contribution to GREEN BOND IMPACT REPORT 11 12 GREEN BOND IMPACT REPORT CIRCULAR ECONOMY Client Story: Riding the Blue Wave IFC’s first blue loan helps a global plastic company recycle 50 billion plastic bottles a year, diverting plastic waste from landfills and oceans. The conventional supply chains of material developed countries alike are turning to In November 2020, IFC made its first-ever use—producing materials, using them, and circular economy models. But that’s not blue loan focused exclusively to address then discarding them into landfills, other the only reason. The circular economy marine plastic pollution to Indorama countries, or rivers and seas—is wasteful makes good business sense and opens great Ventures, a global plastic resin manufacturer. and bad for the environment. Right now, the opportunities for investment and profit. The The $300 million financing package will help world generates 2.0 billion of solid municipal total estimated value of circular economy at the company recycle 50 billion plastic bottles waste every year, and one-third of it is not stake by 2030 can be as high as $4.5 trillion, globally every year by 2025 in Thailand, managed in an environmentally safe manner. with $1 trillion annual savings by 2025 if Indonesia, Philippines, India and Brazil, and By 2030, this number is expected to grow to circular economy is implemented. invest in renewable energy and resource 2.6 billion tons. efficiency projects. IFC has identified economic circularity as Ocean pollution, in particular, is reaching a key theme traversing multiple sectors Indorama Ventures is aiming for a minimum dangerous levels. By 2050, there will be more and building upon our ongoing initiatives of 750,000 metric tons of recycled PET plastics than fish in the ocean by weight, and in resource efficiency, energy and climate globally by 2025. A key feature of the in 2019, oceanographers found a plastic bag change, and sustainability to reduce resource investment is to create value out of waste— in the Mariana Trench, the deepest known footprints, close material loops, and drive processing post-consumer PET bottles that point in the world’s oceans. green growth in emerging markets. In more would have ended up in landfill or been than 100 countries, we engage with targeted processed into lower-value products—by To protect the natural environment that clients in a range of value chains, including promoting higher-value bottle-to-bottle Photos: Indorama Ventures underpins lives and economies as well plastics, construction materials, chemicals, recycling which brings significant value as curb GHG emissions, developing and textiles, and other key industries. generating potential. GREEN BOND IMPACT REPORT 13 GREEN BUILDINGS IN ROMANIA Client Story: Building a Greener Future IFC is supporting the construction of an eco-friendly 60,000-square-metre information technology complex in Lasi, a city in northeastern Romania. The building will be one of the country’s largest office complexes and is part of IFC’s efforts to help build green business infrastructure, attract foreign investment, and facilitate the diversification of Romania’s economy. With 68 percent of the world’s population across Romania, with approximately €72 energy and water than standard buildings, expected to live in urban areas by 2050, million in financing to construct and operate helping to mitigate climate change. Left: Courtesy of WDP. Right: Globalworth Real Estate Investments Ltd. green buildings are emerging as a viable and the energy-efficient office building that The new complex will help Romania effective solution to fight climate change. will house information technology and attract and retain foreign investors and communication tenants. This is IFC`s first And that’s not all. Green buildings can spur businesses by providing them with modern green loan to a Romanian-owned and low-carbon economic growth, generating green office space. The investment will -based company. more than nine million skilled jobs in both also increase economic activity and the renewables and construction sectors Apart from driving economic growth, the employment opportunities in what by 2030. They also represent one of the project will reduce energy consumption by is a more remote part of the country. biggest investment opportunities of the 41 percent compared with a regular office With a growing need for digital services next decade—$24.7 trillion across emerging building in Lasi. It will further help reduce amid COVID-19, spurred by a surge in market cities by 2030—$881 billion in Eastern emissions by 1577 tons of carbon dioxide e-commerce and remote working, Romania Europe and Central Asia. equivalent annually. The new complex will as one of the global hotspots for computer obtain IFC`s Excellence in Design for Greater skills, helpdesk centers and developer In 2021, IFC provided a subsidiary of Iulius Efficiencies (EDGE) certification for buildings. communities, is poised to offer local Holding, a developer of mixed-use properties EDGE buildings use at least 20 percent less university graduates career prospects. 14 GREEN BOND IMPACT REPORT Left: Stefanestii de Jos warehouse, a green building in Bucharest, Romania. Right: A green office and research and development center, built for Renault Dacia in Bucharest, Romania. GREEN BOND IMPACT REPORT 15 16 GREEN BOND IMPACT REPORT BIOMASS IN BRAZIL Client Story: Sweet Smell of Success IFC’s first green loan in the sugar and ethanol sector in Brazil will contribute to climate change mitigation by promoting generation of renewable energy and supporting the production of environmentally friendly biofuels. Brazil is a middle-income country grappling the production of sustainable biofuels and drones and satellite imagery to support real- with an exceptionally challenging economic increase the share of renewable energy in time, accurate monitoring of the weather outlook, which has been exacerbated by the country’s energy mix. and field conditions that delivers actionable the shocks of COVID-19 pandemic. Despite data. Most importantly, it will fund In 2021, IFC provided a green financing loan the current economic peaks and valleys, the production of sustainable biofuels, biogas, to São Martinho, one of the largest and country remains the world’s seventh-largest and biomass-based to generate additional most efficient sugarcane processors in Brazil emitter of greenhouse gases—which it has 175,000-megawatt hour more renewable with four sugar mills in Sao Paulo and Goias, committed to reduce by 43% by 2030 in the energy, nearly 80% of which will be exported and one of the world’s largest renewable Paris Climate Agreement. to the grid. This will help avoid 27,700 tons of biomass electricity providers. IFC committed carbon dioxide equivalent per year. To meet this target, the country must $55 million from its own account ($30 million increase the percentage of renewables in of which is a green loan) and mobilized $45 The financing is the first green loan in the its energy mix by to 45% by 2030 as well million from Rabobank, for a total financing Brazilian sugar and ethanol sector and marks as expand the use of renewable energy package of $100 million. IFC’s first green loan in Brazil. The project sources (other than hydropower) in the is expected to help create markets through The investment will help São Martinho total energy mix to between 28 percent showcasing innovative financial instruments revitalize sugarcane fields with climate- and 33 percent by 2030, including via that promote green investments in the smart organic fertilizers, localized soil biomass-based electricity generation. In agribusiness sector and moving the market treatment techniques, and recycled the past years, the private sector took a toward greater sustainability. nutrients. It will also support the use of leading role in helping the country ramp up GREEN BOND IMPACT REPORT 17 IFC Green Bond Program Overview for FY21 As of June 30th, 2021, IFC had issued 178 green bonds in 20 Sustainability is now a main theme currencies amounting to over $10.5 billion. IFC’s outstanding green in the institutional bond market and bonds totaled $5.9 billion. In FY21, IFC facilitated investor demand its growth has been aided by the onset of the pandemic in 2020, the in the retail market with trades denominated in US dollars and increasing awareness of the climate Swedish krona. crisis and the recognition of the scale of immediate actions needed After a decade of IFC’s Green Bond Program, IFC’s stated goal of 100 per cent alignment to abate these challenges. Our green we reached an inflection point in FY21 where of its real sector operations by 2025. bond issuance during FY21 was we stood still and reflected on the legacy Crucial to this is the internal collaboration based on achieving two objectives: of the program alongside what needs to be with the investment and climate business demonstrating issuance in the accomplished over the coming years to scale departments which has always been a retail market and raising awareness funding towards climate investments. In line benefit of the Green Bond Program. In of climate investing within this with World Bank Group’s recently announced parallel, our continuing dialogue with segment of the capital market Climate Change Action Plan, which sets investors show that data is ever so critical where green bonds are still a niche out alignment with the Paris Agreement, for their analysis. Our mission going forward product. Towards enhancing the our funding program will play a key role is to home in on offering investors a high- program, we successfully updated in providing the financing needed to meet quality liquid credit which also provides high our Green Bond Framework and quality data regarding engaged CICERO Shades of Green IFC’s overall stringent to provide an External Review for sustainability approach IFC’s Green Bond Program. The 2021 IFC green bond issuance as well as flexibility with Second Opinion is now published regards to currencies on our investor relations website. FY21 CUMULATIVE and tenors. The Framework received the overall CICERO Medium Green shading and Volume $165.8 million $10.5 billion Tom Ceusters, Director, a governance score of excellent. Treasury Market Number of bonds 6 178 Operations Flora Chao, Global Head of Funding Currencies 2 20 18 GREEN BOND IMPACT REPORT In 2020, with six years under our belt from being a member of the Executive Committee of the Green, Social and Sustainability-Linked Bonds Principles, we were honored to take the reins after being elected to chair the committee. The International Capital Market Association (ICMA) supports the committee, which provides the strategy and guidance for the larger member and observer community of the Principles. That community includes about 500 institutions across the world. Under IFC’s leadership, the first update of the Principles since 2017 was published. We are very proud of the role the Principles play in the market in providing roots to grow sustainable bond products with integrity. Data shows that over 90% of thematic bond issuance is aligned to the Principles. To complement the Principles, the document “Working Towards a Harmonised Framework for Impact Reporting for Circular Economy Projects and Eco-Efficiency Projects” was published, and it outlines a harmonized framework for impact reporting on eco- efficient and circular economy projects. This is one of the ten broad categories of eligibility for Green Projects under the Principles and an area of priority for IFC’s climate business. Also during the year, the Committee delivered the Climate Transition Finance Handbook. To achieve the global goals of net zero by 2050 and halting global warming to well below 2°C, we need to beckon the high-emitting sectors to partake in the transition. The Climate Transition Handbook offers a bridge for these hard-to-abate sector issuers to credibly access green bond financing to enable them to take the steps needed to arrive at our overall objective of meeting the Paris Agreement. Denise Odaro, Head of Investor Relations GREEN BOND IMPACT REPORT 19 Historical green bond issuance by year FY FY FY FY FY FY FY FY FY FY FY FY Issuance by currency FY21 CUMULATIVE BRL % EUR % Other % CAD % ZAR % SEK AUD % GBP % IDR % TRY % NZD % SEK % % PHP % NOK % CNH % MXN % USD INR . % % JPY . % PEN . % USD HKD . % % COP . % 20 GREEN BOND IMPACT REPORT Accelerating Impact: Green Bonds in Emerging Markets An update on the Amundi Planet EGO Fund In the past three years since its inception, AP 2. Encouraging Disclosure: IFC launched The EGO Fund in short EGO and IFC-managed Green Bond Technical an initiative with a goal to encourage The Amundi Planet Emerging Green Assistance Program (GB-TAP) jointly emerging market bond issuers to disclose One (AP EGO) Fund is the world’s impacted the issuances of 56 Green, Social ESG information. IFC has partnered largest green bond fund in emerging and Sustainability bonds in the amount of $3 with a data provider to collect the ESG markets, launched in March 2018. billion spanning across 33 countries. information, as defined by IFC’s ESG FC and Amundi launched AP EGO Performance Indicators, and make it with a goal to stimulate demand for AP EGO has cumulatively invested in 34 publicly available as a global public good green bonds in emerging markets. green bonds (29 outstanding and 5 matured) for use by investors and asset managers. Closed at $1.42 billion with a $256 with a total investment amount of $838 million investment from IFC, the million as of the end of June 2021. The 29 3. Improving the Quality of Reporting: Fund is expected to deploy $2 billion outstanding green bonds in the portfolio had IFC is developing the Green Finance into emerging market green bonds a market value of $795 million, which is 52.5% Review Protocol (GFRP), a voluntary over its lifetime. AP EGO attracted of assets under management. Its portfolio is guidance to enhance quality of green bond 16 investor groups from developed well diversified with 91 outstanding holdings related information (e.g. frameworks, countries by offering higher by 82 issuers in 40 countries. external review reports, disclosures and yields while providing credit risk impact reporting) in emerging markets. GB-TAP offers a range of activities and protection for investors. GFRP will provide guidance for issuers and initiatives to stimulate the supply of second-opinion providers to standardize emerging market green bonds, both in impact reporting and external review terms of volume and quality. Some of its key reports. This will enhance the reporting technical advisory services to 18 financial activities includes the following: quality and allows investors and market institutions, 10 of which issued debut 1. Training: GB-TAP has trained 167 participants to compare data across green green bonds totaling $1,329 million as of participants from 51 financial institutions bond related information. December 2020. based in 28 different countries since its 4. Advisory Service for Policy Makers The accelerating impact demonstrated by inception. GB-TAP Executive Trainings and Issuers: Under the GB-TAP Green AP EGO and ongoing GB-TAP initiatives have stimulated the issuance of 17 Green, Finance/Green Bond Policy Support, IFC continues to create and grow the market Social and Sustainability bonds, reaching helped 11 emerging market countries of Green, Social and Sustainability bonds at $1,107 million total face value: AP EGO to develop green guidelines and scale in emerging markets. invested in 5 of these green bonds. taxonomies. GB-TAP has provided direct GREEN BOND IMPACT REPORT 21 An Update on the REGIO Fund IFC and HSBC Global Asset Management closed the Real Economy Green Investment Opportunity Fund, or REGIO in May 2020 and successfully raised $538 million of private sector capital to increase access to climate finance for companies and municipalities, and promote the development of the green bond market in emerging and developing economies. REGIO was 32% invested in Green and Sustainable Bonds as at June 2021 impacting 8 Sustainable Development Goals, i.e. Quality Education; Green and sustainable bonds focusing on Clean Water And Sanitation; Affordable And Clean Energy; Industry ad Infrastructure; Sustainable Cities And Communities; Responsible Consumption And Production; Climate Action; and Life On Land. REGIO is thus ahead of its schedule to fully allocate to Green and Sustainable Bonds. In terms of allocation by country, India and Brazil were the largest with 36% and 26% of the Green and Sustainable Bonds respectively. Other countries in the portfolio are Peru (10%), Chile (7%), Indonesia (6%), United Arab Emirates (6%), Paraguay (4%), Turkey (3%) and Poland (2%). IFC provided a $75 million anchor investment in the Fund and HSBC invested another $75 million. The other investors in the Fund was comprised of 9 European pension funds, insurance companies and development finance institutions. IFC manages a Technical Assistance Facility to be implemented alongside REGIO, which is supporting the supply side of the real sector green bond market in emerging countries. 22 GREEN BOND IMPACT REPORT IFC Green Finance Market Engagement IFC actively promotes sustainable capital market development UPDATED GREEN, SOCIAL by working closely with IFC’s clients in developing countries and AND SUSTAINABILITY engaging globally with issuers, investors, underwriters and other BOND PRINCIPLES UNDER IFC’S CHAIRMANSHIP capital market participants. Under IFC’s chairmanship of the CONNECTING BUSINESS AND CLIMATE Part 2 featured green bonds in the apparel Executive Committee of the Green, THROUGH IFC’S CLIMATE BIZ PODCAST industry with H&M and VF Corp on the hot Social and Sustainability-Linked seats. Climate Biz releases a new episode Bond Principles, the updated Green Since 2018, Climate Biz brings stories of every month and is available on Apple and Social Bond Principles were sustainability and climate business in a time Podcasts, Google Podcasts, Spotify, Stitcher, published in June 2021. Esohe Denise of rising momentum of global governments and on IFC’s website. Odaro, in her capacity as Chair of to combat climate change and investor the Principles: interest in sustainability. In 2021, Head of ASSESSING UNDERWRITERS’ Investor Relations, Esohe Denise Odaro, took “The updates to the Green and ESG AMBITION IN IFC’S 2021 up as co-host of Climate Biz alongside Shari Social Bond Principles ensure that ESG DEALER SURVEY Friedman. They are joined by guest speakers the frameworks keep in step with from around the globe and across sectors In 2020, IFC became the first issuer to assess market developments as issuance to explore the latest initiatives and business its bond underwriters on their commitments grows. The recent pandemic and opportunities in climate and sustainability. to ESG and sustainability ambitions when it ongoing climate crisis have brought developed a first of its kind ESG Dealer Survey. sustainability needs more to the Season 3 of Climate Biz rounded up in July The 2021 edition builds on this inaugural core of capital markets and the 2021 with The Revolution of an Evolution, a version and incorporates lessons learned and goal remains to provide issuers and two-part series on green bonds, featuring feedback received from the dealers in 2020, investors with a compass for best IFC Treasurer, John Gandolfo, and CEO of making it more robust. The survey questions practices in using sustainable bonds Climate Bonds Initiative, Sean Kidney. cover the institutions’ ESG commitments to access much needed capital to and strategy, their exposure to sensitive meet the transition to a just and low What are the six fundamental things industries, policies in place to mitigate ESG carbon economy.” to know about the financial market’s risks, thematic investment activities, carbon most topical product: green bonds? footprint, ESG reporting practices, and Read about it in this blog post. more. The 2021 edition also considers recent developments in the sustainable bond market GREEN BOND IMPACT REPORT 23 and includes questions to assess their action plan for achieving the goals of the Paris Awards to celebrate a decade of the Green Bond Agreement. Program— as the “gold standard of impact 2021 CMDPORTAL AWARDS: BEST Out of the 40+ dealer responses, 14% of the reporting” and was awarded Impact INVESTOR RELATIONS TEAM banks were highly performing on ESG while Report of the Year. 18% fell short versus their peers. The scores IFC was voted the “Best Investor Relations from the survey feed into IFC’s annual dealer Team” for 2021 by CMDportal for its GLOBAL FINANCE MAGAZINE assessment exercise but most importantly impressive pro-active DCM Investor AWARDS WIN serve as a tool to engage with the dealers on Relations operation and team, leading in In August 2021, IFC was recognized with ESG throughout the year. what is best practices in the market. the Outstanding Leadership in Sustainable Finance Award by a Multilateral WHAT LIES AHEAD (EVENT) WIN FOR IFC’S FY20 GREEN Institution from Global Finance BOND IMPACT REPORT IFC in collaboration with Environmental Magazine. The award acknowledges Finance hosted an exclusive event on the IFC’s decade of experience in impact that sustainability is at the core of IFC, occasion of the tenth anniversary of IFC’s reporting was awarded in the from its strategic alignment with the Green Bond Program in November 2020. It Environmental Finance Bond Awards Sustainable Development Goals and ESG brought together investors, underwriters and 2021. The judges hailed IFC’s FY20 Green risk management to the sector specific issuers active in the green finance world to Bond Impact Report—a special edition frameworks measuring IFC’s impact. reflect on successes and what innovations are needed to achieve the 2030 Agenda for Sustainable Development. Watch the replay. of private sector finance for climate action, International Fertilizer Association’s Global focusing on recent developments of interest Sustainability Conference. March 2021. Events to climate finance. July 22, 2021. “I think for a lot of investors, including those IFC joined the Information Management At Environmental Finance’s ESG in Fixed in Asia, the pandemic has reinforced their Network Virtual Investors Conference on Income event, IFC joined a discussion on belief in the importance of considering ESG Solar and Pace Investing and participated in social bonds, a product that has proved its issues”, said Marcin Bill of IFC’s Funding the panel discussion on practical ESG and salt in raising financing for COVID-19 relief team at the Maleki Global Roundtable session social equity in green investing with Brown efforts, with Instituto de Credito, APG and on Asia’s role in the pursuit of realizing the Advisory, Nuveen, Newmarket Capital and TD. June 2021. sustainability agenda. February 2021. S&P Global. May 2021. IFC’s Denise Odaro spoke to fertilizer Listen to New Climate Capitalism’s podcast During a virtual talk on private sector for companies and companies in the agriculture about the origins of the green bonds, what sustainability organized by the Green Climate value chain about the applicability of makes a bond green and what is the future Fund, IFC’s Denise Odaro spoke about the use sustainable bonds in this industry at the of green bonds. 24 GREEN BOND IMPACT REPORT IFC Green Bond Eligible Project Commitments By region As of June 30, 2021, IFC green bond proceeds supported 236 green bond Europe and Central Asia eligible projects since FY2014. The total committed amount for these FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 projects is $9.4 billion, of which $7.7 billion has been disbursed. Commitments 178 370 284 320 834 121 119 109 Disbursements 66 228 265 312 833 183 255 49 Total Middle East and North Africa FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Commitments 936 1,133 961 1,555 2,205 885 695 1,040 Commitments 55 143 119 203 265 45 191 100 Disbursements 242 956 754 1,356 1,914 1,135 642 666 Disbursements 9 34 123 208 124 178 66 79 Multi Region South Asia FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Commitments 0 0 0 24 0 0 0 0 Commitments 62 155 200 233 297 122 0 14 Disbursements 0 0 0 17 7 0 0 0 Disbursements 11 125 117 170 151 218 71 10 Latin America and the Caribbean Sub-Saharan Africa FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Commitments 618 422 90 534 406 252 330 101 Commitments 23 43 39 36 63 20 17 350 Disbursements 156 551 210 449 358 208 171 146 Disbursements 0 19 21 22 14 42 32 183 East Asia and the Pacific FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Commitments 0 0 229 204 340 325 38 366 Disbursements 0 0 18 179 427 306 47 198 GREEN BOND IMPACT REPORT 25 By sector FY21 FY20 FY19 FY18 FY17 FY16 FY15 FY14 $1,040 $695 $885 $2,205 $1,555 $961 $1,134 $936 487 408 556 1,129 845 306 808 756 92 521 117 342 79 264 94 65 134 86 212 275 579 51 784 Renewable energy 131 Energy efficiency Other mitigation Adaptation All figures in millions of US$ 281 11 26 GREEN BOND IMPACT REPORT Green Bond Eligible Project Commitments for FY21 Green bond Project short Project Country Type Project description Climate Annual Annual RE capacity Expected Sustainable climate name ID loan energy energy constructed/ annual development sector committed produced savings rehabilitated reduction in goals GHG emission US$M MWh kWh MW tCO2eq/year GREEN Iulius Phase 1 45237 Romania EE IFC’s loan will finance the 31.86 2,656,916 882 BUILDINGS construction and operation of two mixed-use, modern, and energy-efficient office buildings in Iasi, Romania. The new 60,000-square-metre complex will obtain IFC`s Excellence in Design for Greater Efficiencies (EDGE) certification for buildings. WIND REE Wind 44653 Vietnam RE IFC’s loan will finance the 19.00 135,256 54.2 123,489 ENERGY Power 2 development, financing, construction, operation and maintenance of two onshore wind power projects of 25.2 MW and 29 MW respectively in Vietnam. GREEN Absa Green 44557 South RE IFC’s loan will fund the 150.00 800,000 BANKING Loan Africa expansion of the company’s green portfolio in South Africa to support renewable energy and biomass projects and will be the first green loan in Africa in compliance with the internationally recognized Green Loan Principles (GLPs). The project will strengthen the green finance standards which will further improve transparency and disclosure in green lending and encourage mainstreaming of climate financing and replication by other institutions in South Africa and the region. GREEN BOND IMPACT REPORT 27 Green bond Project short Project Country Type Project description Climate Annual Annual RE capacity Expected Sustainable climate name ID loan energy energy constructed/ annual development sector committed produced savings rehabilitated reduction in goals GHG emission US$M MWh kWh MW tCO2eq/year GREEN Logos Indo 43835 Indonesia Other IFC’s loan will finance the 73.03 774,000 650 BUILDINGS 2020 Mitigation development of two multi- story warehouse facilities by applying Singapore’s Green Mark award certification and IFC’s green-building standards to optimize the use of costly land resources and to promote greater competitiveness in Indonesia’s warehousing sector by enhancing the overall standard and efficiency of warehouses in Indonesia. GREEN Ned Green 43809 South RE IFC’s loan will finance the 200.00 519,501 BANKING Loan Africa expansion of Nedbank’s green portfolio in South Africa to increase access to climate finance through demonstration and capacity building, strengthening of Nedbank’s climate risk assessment framework and disclosure initiatives which will foster greater climate resilience in the South African banking sector along with environmental and social effects and Greenhouse Gas (GHG) emission reductions. Nedbank will also serve as a successful demonstration of climate risk mainstreaming and pave the way for market-wide adoption of climate-related financial risk frameworks by other banks. 28 GREEN BOND IMPACT REPORT Green bond Project short Project Country Type Project description Climate Annual Annual RE capacity Expected Sustainable climate name ID loan energy energy constructed/ annual development sector committed produced savings rehabilitated reduction in goals GHG emission US$M MWh kWh MW tCO2eq/year GREEN Indospace 43802 India EE IFC’s loan will finance the 14.36 14,592,691 12,538 BUILDINGS COVID-19 construction and development Debt of a portfolio of around three to four warehousing parks that are EDGE certified providing around 5 million square feet of warehousing infrastructure in India’s main consumption and industrial hubs. The Project will enable the portfolio to continue its business plan and be market-ready as the economy recovers and demand picks up in the future. GREEN Priorbank & 43585 Belarus EE IFC’s loan will finance energy 25.00 13,259 BANKING RLBY efficient home renovation projects and/or green mortgages and leasing of ‘green’ apartments. The bank’s successful introduction of green products to resonate through the market and set the standard for other banks to follow suit thus enabling increased access to climate finance and increased competitiveness in green housing finance in Belarus. GREEN AWC Green 43415 Thailand EE IFC’s loan will finance the 124.19 18,846,000 6,991 BUILDINGS Loan construction of two green hotels in addition to energy efficient refurbishments of four existing hotels in key tourism destinations of Thailand to comply with green and EDGE standards. The project will support the long-term “green recovery” in the Thai tourism market. GREEN BOND IMPACT REPORT 29 Green bond Project short Project Country Type Project description Climate Annual Annual RE capacity Expected Sustainable climate name ID loan energy energy constructed/ annual development sector committed produced savings rehabilitated reduction in goals GHG emission US$M MWh kWh MW tCO2eq/year BIOMASS SM cogen 43319 Brazil RE IFC’s loan will finance the 50.80 174,698 27,702 company’s expansion of its bagasse-based cogeneration capacity with more efficient boilers and generators to generate additional electricity to be sold into the grid and for the project’s own consumption. This is the first Green Loan in the Sugar & Ethanol sector in Brazil and will support the company’s sustainable management of resources and the mitigation of environmental impacts by the renovating it’s sugarcane plantations using advanced climate-smart agricultural techniques. CIRCULAR IVL Recycling 43300 Thailand EE/Other IFC’s loan will finance the 150.00 50,000,000 150,844 ECONOMY Mitigation expansion of Polyethylene Terephalate (PET) recycling capacity that will convert post-consumer PET waste into recycled PET (rPET) for use in beverage bottles and other consumer products. The project is expected to meet the demand of global food and beverage clients while meeting its own stated circular economy and sustainability targets, and notably address growing marine and environmental pollution by diverting plastic waste away from landfills and the open environment. In addition, it will support other climate-friendly and sustainability projects in renewable energy and resource efficiency leading to a GHG emission reductions. 30 GREEN BOND IMPACT REPORT Green bond Project short Project Country Type Project description Climate Annual Annual RE capacity Expected Sustainable climate name ID loan energy energy constructed/ annual development sector committed produced savings rehabilitated reduction in goals GHG emission US$M MWh kWh MW tCO2eq/year BIOMASS COCAL_Bio 43265 Brazil RE IFC’s loan will finance the 40.00 55,890 125,000 construction of a biogas plant to produce biomethane and generate electricity in addition to supporting the renewal of 27,000 hectares of existing sugarcane fields using advanced climate-smart agricultural techniques and the replacement of farm machinery and equipment. TRANSPORT Smart 43181 Ukraine EE/Other IFC’s loan will fund 3 34.94 28,291,514 2,021 Zaporizhia Mitigation transportation projects in Ukraine: 1. The Lviv E-Buses Project will finance up to 50 battery- electric trolleybuses, the rehabilitation of overhead catenary power network lines and the associated electric supply infrastructure 2. The Kryvyi Rih Trams Project which will finance up to 50 electric tramcars, tramway track rehabilitation, and rail grinder equipment. 3. The Smart Zaporizhzhia Project will finance a ‘smart city’ platform plus a municipal data center, up to eight electric buses, up to 20 battery- electric trolleybuses, upgrade of electric transport network equipment, road reconstruction and maintenance machinery, passenger communication system, and public park upgrade. GREEN BOND IMPACT REPORT 31 Green bond Project short Project Country Type Project description Climate Annual Annual RE capacity Expected Sustainable climate name ID loan energy energy constructed/ annual development sector committed produced savings rehabilitated reduction in goals GHG emission US$M MWh kWh MW tCO2eq/year GREEN DCM CIB Grn 43061 Egypt EE IFC’s loan will finance green 100.00 12,854 BANKING Bond building construction and industrial energy efficiency projects through investment in the first green bond issued by Commercial International Bank (CIB), the largest private sector bank in Egypt. The project will promote sustainability through the issuance of the first green bond that will raise funds for green buildings financing in Egypt. SOLAR UZ Scaling 42525 Uzbekistan RE IFC’s loan will finance the 17.52 270,000 100 164,595 ENERGY Solar first 100 MW solar PV plant in Navoi, Uzbekistan to produce clean energy, strengthen the security of supply and combat climate change. The solar PV plant is expected to displace aging and energy intensive thermal power generation and improve resilience through the diversification of Uzbekistan’s electricity generation mix with low-cost renewable energy generation. SOLAR Perote II 41041 Mexico RE IFC’s loan will finance the 10.00 263,000 118.9 127,172 ENERGY construction, equipment, operation and maintenance of a 118.9 MW solar photovoltaic power plant in the State of Veracruz, Mexico. The project will contribute to improving resilience of the power market through diversifying the country’s energy mix currently dominated by carbon intensive thermal generation. 32 GREEN BOND IMPACT REPORT Appendix A: Voices & Perspectives IFC plays various roles in the green finance market, whether it is Sustainable Finance is the Future as an issuer of green bonds, an investor or advisory provider. IFC’s of Finance. The green bond staff are stationed across the globe to work closely with the global has stimulated a wide range of innovative financial instruments. capital market as well as IFC’s private sector clients in developing As climate change is becoming a countries. They work jointly towards a common goal: to promote defining factor of capital markets, sustainability-framed finance plays and encourage growth of the sustainable finance market and an increasing role in directing capital channel capital towards projects with impact. towards a climate-resilient future. The decarbonization targets of the Staff from various regions and across the institution share their Paris Agreement have clear and immediate implications for business, vision on trends and developments in the market for green finance. and we experience an increasing number of our clients asking Sustainable finance has accelerated in the The Japanese capital market is among the for help to develop appropriate Asia-Pacific and is becoming mainstream. first and the fastest growing destinations for decarbonizations pathways. As Carbon footprint is recognized beyond IFC’s thematic bonds. Since 2013, Japanese the past decade was the defining the traditional transportation, industry investors have eagerly supported IFC’s decade for green finance, the next and buildings sectors and considered in Green Bond Program and are increasingly will be the decisive decade for agriculture and cement, for example. embedding ESG standards into their financing credible transition to a Multiple governments including China, investment decisions, reflecting the public’s low-carbon future. Japan and Singapore made carbon neutrality growing awareness of the environmental pledges, which will be transposed into consequences of climate change. In fiscal Berit Lindholdt Lauridsen, Senior further regulatory, industry and market 2020, the world largest institutional investor, Climate Finance Specialist initiatives. Since moving to Singapore from GPIF, pushed up IFC’s cumulative green bond IFC’s headquarters in Washington, DC, issuances past the $10 billion mark. This is I have increased conversations with our the capital market where the green finance Asia-Pacific investor base about sustainable will continue to thrive, and from where IFC bonds, the projects they finance, impact will unlock private capital that will fund reporting and ESG standardization. climate-smart projects across the globe. Marcin Bill, Head of Funding, Asia-Pacific Toshitake Kurosawa , Director, Tokyo Office GREEN BOND IMPACT REPORT 33 Since moving to Singapore during the Europe continues to lead the global ESG The green finance market has grown coronavirus pandemic as Upstream Lead market both in terms of overall bond exponentially since the first green bond for IFC’s Financial Institutions Group, I issuance and regulations. It is also the was issued in 2007 resulting in significant have observed that institutional investors heart of climate action. As the IPCC’s positive climate outcomes and illustrating in Asia are prioritizing and growing Sixth Assessment Report confirms, this the potential for capital markets to drive their ESG investments, while looking at decade can be our last chance to avoid development impact. I hope that the sustainable financing solutions to build catastrophic climate breakdown. There is a trail blazing innovations of green finance back better. There has been an increased lot of expectation for the upcoming COP26 investment structures such as impact, focus on developing thematic climate and to facilitate coordinated rapid action across transparency and disclosure will continue energy transition products that build on all sectors and provide clear direction to to expand to apply to additional investment and leverage the Green and Social Bond the market. The extreme weather events, products targeting sustainability. This is Principles. As part of IFC’s ambitious new climate-based instability, and civil society essential given the less than ten-year time Upstream Strategy, we are working with exert increasing pressure on policymakers frame for the world to meet the SDGs and both issuers and investors to develop new and the companies to “walk the talk.” We the increasing urgency of the climate crisis. markets and create investable opportunities hope that COP26 will launch many more Continued market growth will depend for Blue, Green and Transition Finance sustainability strategies by public and private on access to reliable ESG data to develop products across Asia and the Pacific. sector participants. investment strategies in emerging markets that integrate ESG issues. I am pleased that Christina Ongoma , Principal Investment Elena Panomarenko, Head of Funding, IFC is at the forefront of addressing these Officer & Upstream Lead—Financial Europe data gaps and has recently launched the Institutions Group, Asia and the Pacific ESG Performance Indicators for Capital Markets, a sustainability data framework aimed at enhancing sustainability reporting With so many financial institutions now pledging to become net zero and increase in emerging capital markets. their green portfolios, the first green bond issuance from a private bank in Latin Atiyah Curmally, Principal Environmental America in 2016 feels like a lifetime ago. The sector’s progress has been admirable but Specialist the climate investment gap and the opportunity are enormous. Banks in the region still face the challenge to establish long-term and challenging goals to grow the mere 2% the region represents in the global green bond market. My team continues to work with financial institutions to build their knowledge through the Green Banking Photo: Dominic Chavez/IFC Academy to provide advisory services to identify portfolio and market opportunities, and to design long-term sustainable strategies. Marcela Ponce, Senior Industry Specialist—Financial Institutions Group, Latin America 34 GREEN BOND IMPACT REPORT GREEN BOND IMPACT REPORT 35 Appendix B: IFC Green Bond Program Process IFC’s Green Bond Program follows best • Renewable energy (RE): investments in comply with IFC’s Performance Standards market practice and complies with the Green equipment, systems, and services, which for environmental and social issues and IFC’s Bond Principles. enable the productive use of energy from Corporate Governance Framework, and they renewable resources such as wind, hydro, have undergone a rigorous due diligence STAGE 1: USE OF PROCEEDS solar, and geothermal production; process. The Center for International Climate and Environmental Research at the Proceeds from IFC Green Bonds are allocated • Resource efficiency: investments to University of Oslo has reviewed IFC’s project to a sub-portfolio that is linked to lending improve industrial processes, services, evaluation and selection criteria. Its Second operations for climate-related projects and products that enhance the conversion Opinion is published on IFC’s website. (“Eligible Projects”). Only the loan portions of efficiency of manufacturing inputs the projects are eligible for funding via Green (energy, water, raw materials) to saleable STAGE 3: MANAGEMENT OF PROCEEDS Bond proceeds (equity investments and outputs, including reduction of impact at guarantees are ineligible). source; All proceeds from IFC Green Bonds are set aside in a designated Green Cash Eligible Projects are selected from IFC’s • Cleaner technology production: Account and are invested in accordance climate-related loan portfolio, which investments in manufacturing of with IFC’s conservative liquidity policy until comprises projects that meet IFC Definitions components used in energy efficiency, disbursement to Eligible Projects (except and Metrics for Climate-Related Activities. renewable energy, or cleaner production, several cases when the proceeds are on-lent In a few cases of back-to-back financing, such as solar photovoltaics, manufacture directly to an Eligible Project). The Green net proceeds from IFC Green Bonds are on- of turbines, and building insulation Cash Account tracks the difference between lent by IFC directly to an individual Eligible materials; the balance of outstanding Green Bonds Project. • Financial intermediaries: lending to and outstanding Eligible Project loans. The Projects eligible for Green Bond financing financial intermediaries with the Green Cash Account balance decreases as include the following sectors: requirement that IFC investments are disbursements are made towards Eligible on-lent to specific climate projects that fit Projects or the Green bonds mature, and it • Energy efficiency (EE): investments in IFC’s green bond eligibility criteria; and increases as new Green bonds are issued or equipment, systems, and services, which Eligible Projects are repaid. Disbursement result in a reduced use of energy per unit • Sustainable forestry. requests for Eligible Projects take place in of product or service generated, such accordance with IFC’s established policies as waste heat recovery, cogeneration, STAGE 2: EVALUATION AND SELECTION and procedures, and they are often made building insulation, and energy loss In addition to meeting the green bond over a period of time, depending on project reduction in transmission and distribution; eligibility criteria, all projects financed by IFC milestones. 36 GREEN BOND IMPACT REPORT In some cases, the climate-related component of a project supported by Green Bonds may be a part of a larger investment. In such cases, the Green Bond portfolio only finances the eligible portion of the project. Monitoring projects includes regular reports by the investee company on project activities and performance throughout the lifetime of investment. STAGE 4: REPORTING IFC Green Bond Impact Report follows the Green Bond Principles’ framework for reporting “Working Towards a Harmonized Framework for Green Bond Impact Reporting,” which aims to ensure integrity of the market through increased transparency. The report provides a list of projects that received funding from Green Bond proceeds and subject to confidentiality considerations. It also provides a brief description of each project, the climate loan amount, and the expected environmental impact. The report only covers projects eligible for Green Bond financing. For more information on IFC’s climate business, please visit www.ifc.org/ climatebusiness. GREEN BOND IMPACT REPORT 37 Appendix C: IFC Impact Reporting Approach IFC ACCESS TO INFORMATION POLICY 3. Annual renewable energy produced • Scope of results: Reporting is based on ex-ante estimates at the time of project The Access to Information Policy is the 4. Capacity of renewable energy plant(s) appraisal and mostly for direct project cornerstone of the IFC Sustainability constructed or rehabilitated effects. Framework and articulates our commitment to transparency. INTERPRETING IMPACT INDICATORS • Uncertainty: An important consideration in estimating impact indicators is that We seek to provide accurate and timely The impact indicators are tracked on a they are often based on a number of information regarding our investment and project-level basis and have not been pro- assumptions. While technical experts advisory activities to clients, partners, and rated for the portion of IFC’s contribution. aim to make sound and conservative stakeholders, and we strive to disclose the Investments in financial intermediaries assumptions that are reasonably based relevant information pertaining to project, ensure that climate finance is available for on the information available at the environmental, and social implications, as smaller clients that IFC cannot reach directly, time, the actual environmental impact well as expected development impact prior such as small and medium enterprises. It is of the projects may diverge from initial to consideration by our Board of Directors. important to IFC that our partner financial projections. In general, behavioral changes intermediaries assess climate impacts of This commitment also applies to projects or shifts in baseline conditions can cause their investment portfolio, and therefore, funded by the Green Bond Program. deviations from projections. IFC has developed the application Climate Assessment for Financial Institution • Comparability: Caution should be taken IMPACT INDICATORS Investment, which enables financial in comparing projects, sectors, or whole IFC reports on a number of core indicators intermediary clients to monitor results for portfolios, because baselines (and base for projects included in the Green Bond relevant climate-related investments. years) and calculation methods may vary Program in accordance with the Harmonized significantly. In addition, cost structures IFC’s Greenhouse Gas Methodology and Framework for Impact Reporting developed between countries will also vary, so that Climate-Related Definitions and Metrics by a group of multilateral development developing cost-efficiency calculations are available at the IFC Climate Business banks, including IFC. (results per unit of amount invested in website. eligible projects) could place smaller The four core indicators are: Reporting allows for quantification of a countries with limited economies of scale 1. Annual energy savings few core indicators, but it is important to at a disadvantage and will not take into appreciate the limitations of data reported. consideration country specific context. 2. Annual greenhouse gas emissions reduced or avoided The main considerations to adequately • Omissions: Projects may have impact interpret results are: across a much wider range of indicators 38 GREEN BOND IMPACT REPORT than captured in the Impact Assessment table and may have other important impacts on development. Furthermore, there may be some projects for which the proposed core indicator is not applicable or the data are not available. While IFC takes efforts to improve the consistency and availability of reported metrics over time, projects with climate impact can span over a wide diversity of sectors and sub-sectors, making complete harmonization of reporting metrics challenging. GREEN BOND IMPACT REPORT 39 Appendix D: IFC Green Bond Commitments Reconciliation In FY18 and FY19, we have undertaken FY16: million, respectively, due to Pakistan’s an internal review and reconciliation of reclassification to South Asia. Pakistan • Commitments to Latin America and commitments and disbursements towards was reclassified to the Middle East and the Caribbean region, Commitments a portfolio of FY14-FY17 Green Bond Eligible North Africa region again in FY21. to Renewable Energy sector and Total Projects. Here, we outline corrections Commitments: corrected to $90 million, and adjustments to commitment and ADJUSTMENTS TO DISBURSEMENTS $306 million, and $961 million, respectively. disbursement numbers reported by IFC FY17 Green Bond Impact Report included FY18: in prior years (FY15, FY16, and FY17). IFC a potential project, not originally included Green Bond Commitments by Region and • Disbursements to Middle East and in the Eligible portfolio in FY16 Green Bond IFC Green Bond Commitments by Sector North Africa region and South Asia Impact Report and not considered an breakdowns on page 12 and page 13 of region: corrected to $75 million and $200 Eligible Project at any time afterwards. this report reflect these corrections and million, respectively, due to Pakistan’s adjustments. FY15: reclassification to South Asia. Pakistan was reclassified to the Middle East and • Commitments to Europe and Central Asia ADJUSTMENTS TO COMMITMENTS North Africa region again in FY21. region, Commitments to Energy Efficiency FY17: sector and Total Commitments: adjusted FY17: from $382 million to $370 million; from • Commitments to Renewable Energy sector • Total disbursements: corrected to $1,356 $296 million to $284 million; and from and Commitments to Energy Efficiency million. FY17 Green Bond Impact Report $1,155 million to $1,143 million, respectively, sector: corrected to $845 million and $579 included only a subset of disbursements due to a subsequent commitment million, respectively. FY17 Green Bond for newly-committed projects in the same reduction for project #35012. Impact Report has the labels reversed. year ($899 million). The total amount of • Commitments to World region, disbursements for FY17 towards Green • Commitments to Multi Region: corrected Commitments to Energy Efficiency sector Bond Eligible Projects is $1.356 million. to $24 million and Total Commitments: corrected • Disbursements to Middle East and North • Commitments to Middle East and North to $0, $275 million and $1133 million, Africa region and South Asia region: Africa region and South Asia region: respectively, due to a project change corrected to $184 million and $194 corrected to $137 million and $299 from loan to equity. million, respectively, due to Pakistan’s million, respectively, due to Pakistan’s • Commitments to Middle East and reclassification to South Asia. Pakistan reclassification to South Asia. Pakistan North Africa region and South Asia was reclassified to the Middle East and was reclassified to the Middle East and region: corrected to $59 million and $239 North Africa region again in FY21. North Africa region again in FY21. 40 GREEN BOND IMPACT REPORT Authors This report was prepared by IFC’s Funding & Investor Relations team. FY16: The authors are Esohe Denise Odaro, Sophie Peeters and Marsha Sneh Monteiro, with input from Berit Lindholdt-Lauridsen, Olga Khlebinskaya, • Disbursements to Multi Region: Francisco Avendano, Maria Antonia Paraan and Patricia Nunez Benitez of the corrected to reflect zero disbursement. Climate Business Department. Our appreciation goes to Bing Bing Yuliawati, The disbursement of $18 million for FY16 Asra Quratul Ain Nomani, Alan Lukoma and Emma-Kate Symons for their data reported in FY17 Green Bond Impact and editorial review. Report relates to disbursement in East Asia and the Pacific region in the same year. • Disbursements to Middle East and Disclaimer North Africa region and South Asia This report has been prepared for information purposes only. IFC does not make region: corrected to $86 million and $154 any warranties or representations as to the completeness or reliability of the million, respectively, due to Pakistan’s information, opinions or conclusions expressed herein. The reports and any other reclassification to South Asia. Pakistan information contained or otherwise accessible through the websites mentioned was reclassified to the Middle East and in this report are historical and only speak as of their respective date. IFC is under North Africa region again in FY21. no obligation to update these materials. This report is not intended to provide the basis for the evaluation of any securities issued by IFC. This report should not be construed and does not constitute an invitation, recommendation or offer to subscribe for or purchase any of IFC’s securities. Under no circumstances shall IFC or its affiliates be liable for any loss, damage, liability or expense incurred or suffered which is claimed to have resulted from use of this report, including without limitation any direct, indirect, special or consequential damages, even if IFC has been advised of the possibility of such damages. For additional information concerning IFC, please refer to IFC’s current Information Statement, financial statements and other relevant information available at www.ifc.org/investors. GREEN BOND IMPACT REPORT 41