TELLING OUR STORY 72737 CLIMATE CHANGE Private Sector Solutions 2012 Vol. 6 / Issue 5 TELLING OUR STORY 2012 Vol. 6 / Issue 5 RENEWABLE ENERGY CLIMATE-FRIENDLY ENERGY EFFICIENCY FINANCE ADAPTATION INTRODUCTION FOOD CLIMATE CHANGE Climate change is not simply about to technologies and helping support good the environment. It touches every aspect governance, policy reform, and innovation. YIELD DEGRADATION, LAND LOSS of development, affecting the poor This includes: NEW SEEDS, SMART Message from the disproportionately. • Clean energy investments that open IRRIGATION AND Rapid population growth and markets with first-of-a-kind projects LOGISTICS Executive Vice President urbanization are putting significant demonstrating technical feasibility, and CEO pressure on valuable and increasingly attracting private financing, and scarce resources such as water, energy, encouraging supportive government food, and land. By 2030, almost three- policy reforms quarters of the world’s population will • Support to local financial institutions, be living in urban areas. Climate change leveraging domestic resources that would INCREASING exacerbates this pressure, making it otherwise be unavailable for clean energy WATER INTENSITY FOOD VS. FUEL critical to rethink the way resources are investments OF FOOD TRADE-OFF used and allocated. Left unaddressed, • Working with governments to promote PRODUCTION it is a development crisis in the making. frameworks that encourage climate- Consider that it takes an average of one friendly investments liter of water to produce one calorie of food. • Developing and promoting innovative CLIMATE CHANGE Since it is expected that agricultural financial products that attract greater productivity must rise 70 percent by investment in clean energy 2050 to meet the needs of a growing • Helping private sector clients to world population, the pressure on water identify and respond to financial risks It touches every sector, particularly is tremendous. Yet climate change effects of climate change the fragile connection between are expected to further diminish the world’s • Finding opportunities to address both energy, water, and food security. water supply. For those who depend on climate change and poverty farms, forests, and fisheries to sustain a daily reduction, such as encouraging low-cost + CLIMATE RISKS living, this becomes a question of survival. energy efficient homes and solar lighting. PRIVATE SECTOR SOLUTIONS It’s also a business issue. If you’re The private sector is a key component investing in a port, operators of that port in tackling the issue of climate change. need to factor in the impact of climate The challenge requires both government change on their investment so they know leadership and large-scale private sector what the changing water patterns are going action. It is time to meet the call, putting COVER Affordable, high-efficiency lighting to be, what happens when the sea level climate-friendly policies and practices WATER ENERGY products and electricity from renewable energy mini-grids bring clean electrical power to rises, and what effect that will have on into high gear, and going well beyond low-income households that would otherwise commerce and profitability. business as usual. lack it. IFC’s new Lighting India program will help meet the off-grid population's needs with That's why climate change is one of INCREASING UNCERTAINTY CARBON CONSTRAINTS renewable energy-based solutions. It draws the biggest issues in development today. OF WATER SUPPLY + ENERGY EFFICIENCY on lessons of our Lighting Africa initiative with the World Bank and others that has enabled While public policy is key, the private RESOURCE EFFICIENCY OFF-GRID TECHNOLOGIES more than 500,000 solar lamps and lanterns sector must also play a leading role. to be sold. IFC can help business not just meet the challenge but build opportunity LARS H. THUNELL INCREASING DEMAND by widening and deepening access Executive Vice President and CEO FOR WATER FOR ENERGY PRODUCTION 2 3 INTRODUCTION IFC has been supporting business • Energy Efficiency—from buildings IFC & CLIMATE solutions to climate change since 1989, just a decade after the term was coined in a report published by the US National to industrial processes, agribusiness, and other key needs, IFC is investing in reducing energy use We focus on four broad areas: RENEWABLE ENERGY, ENERGY EFFICIENCY, CLIMATE-FRIENDLY FINANCE, and ADAPTATION CHANGE Private Sector Solutions Academy of Sciences. Our first project was a solar energy investment in China, a precursor to dozens of investments subsequently made across the globe, from • Climate-Friendly Finance— leveraging our dollars through domestic financial institutions and promoting cutting-edge financial mechanisms UKRAINE Supporting a leading agribusiness company’s drive to use less water (pp. 20-21) CHINA Helping the government enact new green banking standards (pp. 24-25) to a Traditionally Public Argentina to Uganda. such as green bonds Since that time, we have continued to be • Adaptation—by analyzing climate risks Sector Issue an early mover in clean energy investments we are helping our clients prepare for around the world, providing seed capital to climate change innovative clean technologies, introducing utility-scale renewable energy projects to Portfolio management is also important IFC’s goal: 20 percent of new markets, supporting the growth of to us. From footprint to imprint, IFC tracks our investments to be energy-efficient buildings and industrial results for increased project impact. climate-friendly by 2015 processes, and pioneering the analysis of Looking forward, we see untapped climate risks and adaptation strategies. opportunities for investors seeking to Over the past five years, IFC has address resource constraints in emerging LEBANON INDIA doubled its investments in climate-friendly markets. Based on this potential, IFC is projects to $1.7 billion per year, and we looking to grow its own climate business see more opportunities ahead, even in the to 20 percent of its long-term financing Pioneering local Attracting new private absence of an international agreement to by 2015, up from 14 percent last year. banks’ financing investment in solar curb greenhouse gases. Where the Working together with our clients, COLOMBIA of energy-efficient housing (pp. 18-19) energy PPPs (pp. 8-9, 16-17) investment climate is supportive and governments, and partners, we are creating access to finance exists, the private sector new models for tackling climate change. is moving forward and investing in clean But there is still much more to be done. Providing climate risk energy and energy efficiency. Given the scale of investment required, it is forecasting advice for This is where IFC plays a role by clear that the private sector will be needed a leading private port operator (pp. 40-41) MOZAMBIQUE providing financing and advice to our to leverage the work of the government and clients in key areas of climate business civil society, and that better coordination including: and unified action will be required. IFC Working with the $6.5 billion Climate • Renewable Energy—supporting is working to provide the leadership to Investment Funds to identify new “greening the grid” and providing access strengthen the bridge between the private private sector partners for a low- carbon future (pp. 36-37) to clean energy for the 1.3 billion people and public sectors and help forge the who are still not grid-connected low-carbon economy of tomorrow. 4 5 CONTENTS See videos on many of these stories in the online version of Telling Our Story—available at ifc.org. Telling Our Story—Climate Change June 2012 GREEN BUILDINGS Building-related greenhouse gas Market research shows the building emissions may well double by 2030, industry needs a way to easily assess and with most of this increase taking place rate a green building project at the early Introducing EDGE in emerging market countries. design stage that can be applied in a Never has there been such a pressing developing country context. Although India need for a green building certification several assessment tools are available, the RENEWABLE ENERGY 22 Transportation ADAPTATION system available to all. It is time to rethink mass market needs a simple, quick, and Chennai’s Green Metro the sustainability of the construction affordable rating system for large-scale India Africa industry and ensure that green buildings adoption and market transformation. 8 On-Grid Power 36 Vulnerable Countries Solar at Utility Scale Facing Major Challenges deliver a demonstrably different carbon As most developing countries do not have footprint from conventional buildings. effective regulations to control resource CLIMATE-FRIENDLY FINANCE Nicaragua Bangladesh Until now, going green in the developing use in buildings, the need for a ‘voluntary’ 10 On-Grid Power 38 Sustainable Agribusiness China world’s building business seemed a luxury system becomes even greater. EDGE is a Geothermal: The Power of the Earth Climate-Resilient Seeds 24 Green Banking only for the wealthy, or a few select win-win for all stakeholders, helping: Standards for multinational companies looking to make • Investors test the financial viability of India Climate-Friendly Finance Colombia a branding statement. Today, however, a green building project 12 Off-Grid Power 40 Climate Risk Forecasting buildings for the middle- and lower- • Banks offer green mortgages and green For Lighting and Cooking Global Anticipating Change income markets can also adopt construction credit facilities 26 Water environmentally sound designs. Imagine a • Developers brand their projects ‘green’ Global An Integrated Response 14 Manufacturing simple, inexpensive, and reliable way to and attract new investors and buyers. Solar Components Global SPECIAL FOCUS generate real and dramatic savings on • Building Owners save on operational 28 Green Bonds utility bills, no matter what the client’s costs. Global Global Part of IFC’s Approach income or the kind of building they live Meanwhile, most existing green building 16 PPPs IFC Portfolio Measurement 42  or work in—whether a house, hospital, assessment systems now on the market are Financing Sustainability Global From Footprint to Imprint apartment building, hotel, or office. complex, expensive, and require extensive 30 Local Banks With this in mind, IFC is introducing a amounts of training and data entry. EDGE, Financing Efficiency Upgrades PHOTO Built with IFC financing, the One new international green building standard on the other hand, is simple and affordable, ENERGY EFFICIENCY  Airport Square office building in Ghana’s for the building industry called EDGE making it easier to use in the developing Turkey capital city, Accra, is one of Africa’s newest (Excellence in Design for Greater world, where the need is already great and Global 32 Yapi Kredi Leasing green buildings, lowering operating costs with its high environmental standards. Efficiencies). It is supported by an is expected to surge in coming years. 18 Green Buildings Building an Energy Efficiency Portfolio investment-planning tool for building EDGE is part of IFC’s broader strategy Transforming an Industry India owners and developers that helps improve to encourage a large-scale adoption of Ukraine 3 4 Cleantech Venture Capital efficiency and calculates cost savings and Green Building Standards in developing 20 Cleaner Production Early-Stage Investment investment paybacks in one easy-to-use countries, while addressing the needs of Doing More with Less for Climate Action Excel-based system focusing on energy, industry stakeholders, and will be rolled water, and material resource use. out in pilot countries in coming months. 6 7 INDIA PHOTO Germany is currently the world leader in utility- scale solar, with 28,000 MW connected to its grid. But India is coming on fast, planning to add 20,000 MW in 10 years. ON-GRID POWER Solar at Utility Scale Within 10 years, India expects to build more than 20,000 MW of grid-connected solar projects—one of the world’s highest totals, reducing its reliance on coal. solar, Azure recently opened a 5 MW plant in the low-income desert state of Rajasthan, part of the 100 MW of solar capacity it plans to install nationwide by 2014. Meeting this ambitious pledge will Our involvement in the utility-scale require an estimated investment of solar industry began in 2004, when an $60 billion, and cannot be done without IFC-managed $4 million Global India has major goals in the private sector. It comes amid a Environment Facility grant helped private solar power. IFC helps the growing global move toward utility-scale Philippine utility CEPALCO open what private sector meet them. solar projects that IFC is helping bring to was then the developing world’s largest emerging markets. Rapid cost decreases grid-connected plant. Another are making solar competitive with other breakthrough came with the 5 MW sources of power, opening major Sivaganga plant in Tamil Nadu that local opportunities for green entrepreneurs. client Moser Baer Clean Energy Limited We support high-impact clients who developed with our financing in 2010. help the industry mature, using IFC A $5 million-equivalent IFC local investment and advice to transfer the currency loan is also helping Mahindra knowledge and technology needed to Solar One build an initial 5 MW solar develop viable new business models. project, generating enough electricity to They represent a new wave of solar serve about 60,000 rural homes in pioneers in India—currently the world’s Rajasthan. Launched in 2010, Mahindra second most attractive market for solar Solar One is committed to being on the after the US, according to Ernst and frontier of the local solar revolution, Young’s renewable index. meeting rural electrification and other In 2010, when the firm was still at the needs to help achieve inclusive, sustainable pre-revenue stage, we took a $10 million economic growth. Recently awarded stake in Azure Power Private Ltd., another 30 MW project in the same state, PHOTO Azure Power founder Inderpreet Wadhwa, developer of the country’s first utility-scale the firm’s Rajasthan ventures are an early one of India’s young solar pioneers. solar plant—a 2 MW plant generating sign of large-scale solar’s commercial power for 32 villages in Punjab. Now one potential in addressing the enormous of India’s largest players in grid-connected energy needs of India. 8 RENEWABLE ENERGY 9 NICARAGUA PHOTOS The San Jacinto geothermal plant—a new, privately sponsored project that will meet more than 15 percent of Nicaragua’s power demand from renewable sources. ON-GRID POWER Geothermal: As developing countries grow, demanding more and more electrical power, it is vital to move away from fossil fuels and make increasing use needs. It just needs to attract the necessary private investment—something it has not been able to do until now. The test case is set on a natural hotbed of commercially viable renewable surrounding the volcano Telica: the The Power of the Earth energy sources. 72 MW San Jacinto project being Most of the global focus is on wind developed by affiliates of US-based and solar—sectors where IFC is investing Ram Power Corp. It lies outside the city heavily worldwide. But geothermal of León. Ram, a geothermal specialist Steam-heated, energy is another high-potential natural listed in Toronto, finalized construction underground energy power source that developing countries of the first 36 megawatt unit in late 2011 have barely tapped until now. IFC is and has now teamed with IFC to finance helping expand its use as well, beginning the project’s second 36 MW unit. in Nicaragua. After extensive appraisal, IFC found Driving electrical turbines with heat many strong points that made the project from deep within the earth, geothermal bankable: exceptional geothermal resources plants’ proven technology could be a key able to produce power below the cost generator of clean power in many of other existing sources, experienced developing countries. But so far only operators, and a solid long-term power three—the Philippines, Indonesia, and purchase agreement with privatized Mexico—have made it a major part of local utilities. their installed capacity. Many others, We are providing a $50 million package including Nicaragua, are now also to move the project forward and are working Meanwhile, IFC advisory services starting to give it serious focus. alongside eight other development finance teams are working in many other ways The second poorest country in Latin institutions that have together provided to overcome the industry’s barriers and America and the Caribbean after Haiti, another $140 million in commitments. San thus increase the installed capacity of Nicaragua today relies mainly on foreign Jacinto, which will provide over 15 percent of geothermal power worldwide. In-depth oil for its power plants, many of which are Nicaragua’s energy from a renewable source, market assessments have been done for major emitters of greenhouse gases. But is expected to operate at full capacity by Turkey, the Eastern Caribbean, and several analysis shows it has enough geothermal January 2013—the first geothermal start-up East African countries, raising awareness resources to meet all its domestic power financed by IFC, but surely not the last. of geothermal’s potential benefits. 10 RENEWABLE ENERGY 11 INDIA PHOTOS The new Lighting PHOTOS A woman in Bihar (left) holds on to her India initiative will help bring only beacon of light: a $17 solar LED appliance lighting to those who need it that passed Lighting Africa’s quality tests when most, building a market for applied in India. In Gujarat (below), IFC client low-cost, long-lasting solar SEWA is helping low-income women buy high- lighting products. efficiency, $70 cook stoves, requiring little fuel and producing few emissions. It draws on the lessons of the IFC/World Bank Lighting Africa program, whose privately sold solar lamps help off-grid students in Kenya (right) and other countries study at night. OFF-GRID POWER For Lighting and Cooking When the night falls in India, millions of people must resort to kerosene lamps or firewood or paraffin candles to light their homes. Lighting India will address market barriers by creating an enabling environment and supporting companies committed to developing quality products. It will offer But these old-style products give poor market assessments, feasibility studies, lighting, produce greenhouse gases, training, and advice on distribution/supply generate indoor air pollution, and are bad chain management, manufacturing, and for health and the environment. Anyone scalable business models. It will also One village at a time with an affordable, effective, and address access-to-finance-related climate-friendly alternative has many challenges for both producers and users. potential customers. Recognizing the risk of low-quality Nearly 400 million Indians have products flooding the market, Lighting no access to energy at all. Another Africa institutionalized a quality assurance 420 million survive on just a few hours testing framework, testing more than of electricity per day. 100 products to date. Lighting India Many off-grid lighting product plans to replicate this approach, building manufacturers in India and other countries local testing capacity with internationally are looking for viable ways to enter this recognized standards. market. The challenge is to bring their Lighting India will add further products to end-users in a sustainable way. innovations to the Africa model, working Doing this, and much more, is the goal of with renewable energy mini-grids as well Its forefather the Lighting Africa women, SEWA, provide 200,000 IFC’s new Lighting India program, as lighting appliance companies, helping program, which IFC and the World Bank affordable new solar lanterns and operated in partnership with the US and bring both of them to scale. Improving together launched in 2007, has not only high-efficiency cooking stoves to its Italy. It will spark private sector users’ productivity and education by helped private firms sell 500,000 solar members. An upcoming IFC risk-sharing involvement, building markets that provide allowing them to work or study in the lighting products, but reached a much facility will stimulate new commercial affordable, modern off-grid lighting to evening without the health hazards of larger audience of 19 million people financing for these new purchases, low-income communities across India. fire and indoor air pollution, Lighting through consumer education campaigns. significantly reducing emissions and Learning from the successful Lighting India will bring clean and affordable For additional impact, in another improving living standards at the Africa program that has helped sell lighting to the homes of 2 million people project IFC is also helping one of India’s household level. 500,000 solar lamps and lanterns, in India by 2015. largest organizations of low-income 12 RENEWABLE ENERGY 13 GLOBAL PHOTOS Components manufactured in emerging markets by IFC client Abengoa of Spain play a critical role in the fast-growing, high-potential concentrated solar power (CSP) industry. MANUFACTURING Solar Components Many factors must combine for solar power to become a large-scale, mainstream global industry. While utility-scale solar plants that generation projects, but manufacturing ones as well—having invested more than $200 million since 2007 at all levels of the manufacturing supply chain. We offset significant amounts of carbon focus on companies with established emissions have a free power source, their technologies and expertise in raw up-front capital expenditures can still be material production as well as solar high. As those costs drop, projects have photovoltaic (PV) components with Making the solar and will continue to become more widespread applications. supply chain more competitive. That will attract more Today there is also growing interest in cost-competitive private capital over time, allowing the applying concentrated solar power (CSP) industry to play a bigger role in the technology. It uses mirrors or lenses with battle against climate change while tracking systems to focus a large amount transforming developing countries of concentrated sunlight onto a small with new access to electricity, water area, which then becomes a heat source purification, and food processing. If costs that is typically used for conventional continue to fall, many see potential for power plants. Recently developed smaller 250 GW of solar power installed by CSP systems also provide clean water 2020 globally, or roughly four times and other important needs. today’s level, with costs to the consumer One IFC client, Spain’s Abengoa S.A., at or below those of other sources such is a global leader in solar CSP as diesel, propane, or carbon-based technology, both as equipment electricity generation. manufacturer and project sponsor. After With our strong capital base, global building several state-of-the art plants at market and industry knowledge, and home in Spain, it is now partnering with wide range of investment and advisory IFC as it shifts more operations to where components for several CSP plants IFC and its World Bank Group partners products, IFC can do much to mitigate emerging markets. are made. Our support put a World Bank look forward to continued partnership certain risks and bring additional In 2010, our $24 million loan helped Group stamp of approval on the feasibility with Abengoa and other companies with a investors on board. That’s why we finance the expansion of Abengoa’s of establishing solar CSP manufacturing similar mandate to help develop this finance not just renewable energy power production arm in Mexico, COMEMSA, operations of this scale in Mexico. industry in emerging markets. 14 RENEWABLE ENERGY 15 GLOBAL PHOTOS Private investment mobilized for a new waste-to- energy plant in the Maldives (right) improves conditions in one of the world’s most climate-threatened nations. Privately owned solar power plants are becoming a mainstream source for state utilities in several emerging markets. In Thailand (opposite page left, and top right), Solar Power Corp is installing 34 solar farms. Bulgaria’s new 60.4 MW Karadzhalovo solar plant (opposite page, bottom right) is one of Europe’s largest. PPPs The transition to climate-friendly power Indo-German consortium Tatva Global generation in the developing world will Renewable Energy (Maldives), is now require vast amounts of investment— planning to invest $50 million in an Financing far more than governments can provide. integrated project that includes a 2.7 MW But sufficient private capital is not always waste-to-energy plant and best practice Sustainability available, given the risks, sizes, and time waste management systems, reducing annual lines of path-breaking projects. Innovative greenhouse gas emissions by 16,000 tons. public-private partnerships (PPPs) are Pioneering PPPs are also needed to essential in moving forward. Creating them mainstream solar renewables. Here our Critical for is one of IFC’s specialties. recent work includes: climate-friendly The Maldives, a small island nation off • India: Fast-growing Gujarat state aims infrastructure Sri Lanka, is one of the most climate- to develop 500 MW of solar power in the threatened on earth. Many of its islands are next two years and make its capital, only about five feet above sea level, highly Gandhinagar, a model solar city. To pave vulnerable to the impending sea level rises the way for large-scale solar, its government that UN scientists forecast. Without further asked IFC to find firms to finance and action, its people could be among the build two 2.5 MW pilot solar projects world’s first big wave of climate refugees. generating a total of 5 MW from rooftop Dependent on imported fossil fuel–based solar panels. Supported by the Netherlands power, the Maldives’ emissions were long and Finland, we advised in a competitive worsened by its practice of burning garbage bidding process won in April 2012 by Azure on a small island near capital city Malé. Power of India and SunEdison of the US. • Thailand: IFC’s early backing supported project financing that closed in Changing course, it set a new national solid They are now investing a combined the rise of the country’s renewable March 2012 despite the difficult waste management policy in 2008 and $15 million to bring the projects on-line. energy pioneer, Solar Power Co. It has conditions in Europe. IFC provided brought in IFC advisors to attract the IFC Public Private Partnership and $15 million in IFC financing to install €46.1 million ($61.4 million) and sector’s first private investment. Supported Sustainable Business Advisory teams 34 privately owned solar farms selling mobilized €41.1 million ($54.8 million) by DevCo, the Public-Private Advisory structured the project and advised the Gujarat power to government utilities by 2013. more from Italy’s UniCredit through a Infrastructure Facility, and the South Asia Energy Research and Management Institute • Bulgaria: The new 60.4 MW syndication loan, while the US Overseas Infrastructure Facility, we helped set a fair and Gujarat Power Corporation Ltd, the Karadzhalovo solar plant outside Plovdiv Private Investment Corp. (OPIC) and transparent bidding process for a 20-year two state supported agencies for imple- is one of Europe’s largest, made possible provided a $50 million parallel loan. waste management concession. The winner, menting solar power, on the bidding process. by a €155 million ($206.5 million) 16 RENEWABLE ENERGY 17 GLOBAL GREEN A new global business is fast emerging— Australia, Finland, Netherlands, meeting the growing demand for New Zealand, and Switzerland. commercial and residential buildings with “There are very simple methods BUILDINGS lower environmental impact across the of applying these green standards,” developing world. Setting new industry says Firma Herwanto of the Indonesian standards that work for everyone is critical Institute of Architects. “I do believe these Transforming an Industry to moving forward. upcoming regulations will be good for Almost 40 percent of all energy the people of Jakarta.” generated across the world is used to cool, Lebanon’s Green Building Council light, and ventilate buildings. Businesses also worked with IFC to develop a rating that can transform the building sector will system that will evaluate the energy A push for more efficient transform the world, reducing today’s efficiency of commercial buildings. offices and homes excessive energy consumption, offsetting It shows that with investments of up to emissions, and increasing the supply of $5 million, local building owners and affordable, climate-friendly living spaces developers could save up to $900,000 for a growing world population. annually, rapidly recouping their costs There is no time to wait. IFC is acting of investment. now, working globally to help reposition IFC is also scaling up its investments the building industry with a new focus in green building projects aimed at on sustainability and energy efficiency. expanding affordable housing choices In Indonesia, one of the world’s largest in emerging markets. emitters of greenhouse gases, an IFC– Artha Capital is a Mexican real estate growing need, following guidelines laid out Homes being developed will feature PHOTOS Architect Firma Herwanto’s climate-friendly design work (top) fed into Jakarta authorities’ recent World Bank investment climate advisory investment fund focused on buying and in a new publication that Artha produced low-energy lighting and solar water creation of the first green building standards in team is bringing Jakarta authorities and developing land for new affordable housing with IFC’s support, complying with heaters, and are expected to reduce Indonesia, one of the world’s largest emitters of building industry leaders together to draft and commercial building projects. IFC’s Mexican government policies. energy consumption by more than greenhouse gases. Throughout the developing world (bottom) demand is increasing for green standards the city’s first green building code. Market $25 million investment in one of its funds “Our Green Design Guide establishes 30 percent and greenhouse gas emissions in the building industry. research shows that modest, affordable will expand a wide range of local criteria and guidelines along the value chain by 10,000 CO2 tons per year. Other design changes can cut buildings’ power developments, helping address Mexico’s from site preparation and basic climate-friendly measures include the use and water use by 20 percent—one of the lack of affordable housing and increase infrastructure to plot development of solar LED lights for half of all street findings of the IFC–World Bank advisory home ownership. Artha investees will build projects,” said Germán Ahumada Alduncin, lighting and provision of bicycle paths project provided in partnership with about 66,000 new homes to help meet this Founding Partner and CEO of Artha. and pedestrian walkways. 18 ENERGY EFFICIENCY 19 UKRAINE RIGHT Sugar beets are among Ukrainian agribusiness leader Mriya Agroholding’s many products, now being produced with less energy and water. CLEANER Finding the necessary balance between agricultural productivity and resource efficiency is challenging, but it can be Mriya produces about 1.5 million tons of sugar beets per year that are eventually processed into sugar at its affiliated PRODUCTION Doing More with Less achieved by incorporating climate- friendly cleaner production techniques. Ukraine may have a comparative advantage for primary agricultural plants. Because sugar production is energy-intensive—with energy and water accounting for up to 25 percent of the processing cost—more than 90 percent production, thanks to its vast arable land of the IFC loan is dedicated to water- and fertile black-earth soils. But its saving measures aimed at repairing a agricultural production and related water treatment station, installing a new agribusinesses are often energy- and press for beet pulp, and adding new A role model of water-intensive, raising costs and putting press filters at four of the firm’s six sugar sustainable agribusiness stress on the local environment. refineries. Through these steps, Thanks to a loan from IFC’s Clean significant savings are being realized at Production Lending Facility (CPLF), Mriya’s Khorostkiv sugar plant, where Mriya Agroholding, a successful Ukrainian efficiency improvements have cut water agro producer, is boosting its operational use by 20 percent. processes and realizing significant Improved production efficiency at reductions in its energy consumption, Mriya’s affiliated refineries is increasing water use, and CO2 emissions. capacity utilization by about 8.5 percent, IFC created the $125 million facility while production costs are being reduced to help its client identify and carry out by up to 6.8 percent at the various cleaner production investments. Through refineries, generating the equivalent this initiative, Mriya received a $5 million of about $3 million in annual savings. cleaner production loan in 2011, Avoidance of penalties by the local following a 2010 IFC-financed audit. regulator and utilities for high water use The loan covers 40 percent of Mriya’s and wastewater treatment add to the ABOVE Looming issues of water scarcity require a project cost of $12.5 million, and comes company’s savings. new, more integrated approach than has been used until now. Ukraine’s Mriya Agroholding shows the with advisory support from IFC’s private sector has an essential role to play. in-house cleaner production specialists. 20 ENERGY EFFICIENCY 21 INDIA PHOTOS Aging existing public transit systems cannot keep up with demand in sprawling Chennai, frustrating commuters with unexpected delays. Improvements are coming in a new $3 billion, environmentally friendly Metro system. IFC is helping build the private sector’s role in the high-profile project. TRANSPORTATION Chennai’s Green Metro Traffic snarls daily life in Chennai, the capital city of the Indian state of Tamil Nadu—increasing emissions and disrupting the routines of more than air conditioning in all underground stations, and regenerative brakes that convert kinetic energy and feed it back into the system. These brakes are similar to those in the 7 million residents. And it is only getting Delhi Metro, the world’s first urban worse, as 25 percent more vehicles join mass transit system to win Kyoto Protocol the already-clogged roads each year. carbon credits—earning credits worth Existing bus and elevated rail systems $9.5 million a year for seven years A $3 billion solution New Delhi carry just 29 percent of local commuters, in September 2011, after receiving compared to 60 percent in Delhi. But UN certification for its proven ability to they are not always happy. The system’s take 91,000 people off the Indian capital’s timetables are widely considered unreliable. roads every year. Using that same model, It is time for a new approach. the Chennai Metro has also applied for To move forward, state and national Clean Development Mechanism credits government agencies are building a and expects to be certified after it opens. $3 billion, 45-km metro rail system in IFC is advising on the design and Chennai’s two busiest corridors. When implementation of a performance-based Chennai completed in 2015, the Chennai Metro operations and maintenance (O&M) is expected to reduce travel times and contract for Phase 1 of the Chennai Metro. vehicular pollution significantly, while also The first project of its kind in India, it will increasing productivity and improving attract a respected private operator to enter living standards. IFC advisors are about 18 months before the commencement increasing the private sector’s role in this of operations, establish the O&M company, high-impact, sustainability-driven project. and train staff. Chennai’s new, climate-smart rail lines The private partner’s contract will cover will provide more comfortable, efficient, the first seven to nine years of operations, the contract also includes key performance Additional support from IFC’s Japanese and reliable transportation for 700,000 during which it will likely invest millions of indicators with associated bonuses and and Spanish trust funds covered the costs daily users, moving riders out of cars and dollars each year in the systems, equipment, penalties to incentivize the operator to of the specialized legal, technical, and buses and onto trains. Key green features and spare parts its staff needs to provide provide the citizens of Chennai with reliable, traffic forecasting consultants that assisted include platform screen doors to minimize essential services. Under IFC’s design, clean, safe, and efficient metro services. IFC with the project. 22 ENERGY EFFICIENCY 23 CHINA GREEN The Chinese government has long collaborated with IFC on its Green Credit Policy initiative, helping But most recently, it is the China Banking Regulatory Commission’s launch of the Green Credit Guidelines developed in BANKING Standards for Chinese banks implement the policy through training events, sector guidance, and other technical resources since its launch in 2007. consultation with IFC that is marking a new phase in China’s commitment to sustainable banking practices. The new guidelines are a practical step forward in putting the Green IFC’s environmental and social risk Credit Policy requirement into practice. Climate-Friendly management policies and sector-specific By providing bank directors and senior Finance guidelines are valued by local banks such as: management with direct responsibility and • Industrial and Commerce Bank know-how for managing environmental and of China, the largest bank in the world social impacts and promoting green credit by market value practices, the guidelines are now expected One step closer to financial • China Industrial Bank, which in to make China’s lending more resource sector transformation 2008 became the first Chinese bank efficient and environmentally sustainable, to adopt the Equator Principles, the both in China and beyond, through credit project finance industry’s framework risk management, financial innovation, for environmental and social risk and banks’ own footprint management. management based on IFC’s IFC considers the new guidelines performance standards. welcome, especially given the increased The Chinese government’s involvement of Chinese enterprises in the transformation of the financial sector global market and calls urging the overseas Over 300 participants from 12 emerging China Banking Regulatory Commission PHOTOS Working simultaneously with toward environmental and social projects to take more care of the local markets took part. They included high- in developing key performance China’s government and banks, IFC is helping make green banking a reality in sustainability continues to build on its past environment and reduce energy use. level representatives from the national indicators for the guidelines and the world’s largest emerging market. collaborations with IFC, including the China’s successful experience was recently banking regulators of Bangladesh, Brazil, strengthening evaluation mechanisms. Wang Zhaoxing (top right), vice-chairman of the China Banking Regulatory benchmarking of the Green Credit Policy shared with other emerging market China, Indonesia, Korea, Laos, Mongolia, We will also continue to partner with Commission, spoke at the International against IFC’s performance standards and regulators at the first International Green Nigeria, Thailand, and Vietnam. It was the both banking and environmental Green Credit Forum in Beijing cosponsored by IFC, May 2012. the introduction of the environmental, Credit Forum, hosted by IFC and the first gathering of its kind to discuss the regulators in developing sector-specific health, and safety guidelines of the World China Banking Regulatory Commission in future of sustainable finance. guidelines and other technical resources Bank Group to Chinese audiences. Beijing in May, 2012. From here, IFC expects to support the to support implementation by banks. 24 CLIMATE-FRIENDLY FINANCE 25 GLOBAL WATER An Integrated Response Experts agree: climate change will make water security even harder and more expensive to achieve in the coming years. It could reintroduce water security for ongoing operations and maintenance. A commitment of $25,000 from the community, other government sources, or private sponsors typically allows service challenges in countries that have long for 10 years, making clean water avoided them. Many may face increased affordable to those earning $2 a day. IFC droughts and floods. Extreme variability was an early equity investor in WHI, and of precipitation will likely place 2.8 billion along with one of Bangladesh’s largest Acting now— people at risk of water shortages, the firms, AK Khan Group, also financing the to avoid crisis later World Bank forecasts. local joint venture there. Managing water resources using In India, where water supply will likely an integrated approach will be critical be in severe deficit by 2030 without to offset all the social, economic, and concerted action, a $5 million IFC loan is environmental impacts. And while helping finance some of the country’s first informed action by governments will water and wastewater PPPs. Our client, be essential, the private sector also has Hyderabad-based water specialist Vishwa a major role to play—one IFC is helping Infrastructures and Services Pvt Ltd., is build globally. developing two projects. They will improve Bhatiari is a rural community of 20,000 sanitation and provide better water services in climate-threatened coastal Bangladesh to about 450,000 people in two mid-sized with no piped water supply. Its drinking towns, Khandwa, Madhya Pradesh and water has traditionally come from wells, Kolhapur, Maharashtra. then boiled or filtered. But now it is one Another IFC client from India, Jain In the world’s most water-scarce region, Egypt, this viable new concept can PHOTOS IFC helps the private of several countries served by Water Irrigation Systems, provides affordable, the Middle East and North Africa, IFC now be applied elsewhere. sector promote more sustainable management of water resources by Health International (WHI), a for-profit productivity-enhancing technology that helps advisory support helped launch Egypt’s These and other projects show the all three key user groups: industrial, “micro-utility” whose technology small-scale farmers reduce their water use. first-ever wastewater treatment PPP, a case for private sector involvement in agricultural, and residential. purifies local water up to WHO standards. Having grown with our earlier support, it is roughly $150 million plant bringing water sustainable use of water resources— Its sustainable business model funds now expanding in sub-Saharan Africa, where it and sanitation to up to 2 million people in good for business, and good for long-term service from an initial one-time recently pledged to increase its investments as the fast-growing city of New Cairo. Nearly development. investment, using water revenues to pay part of the G8’s global food security initiatives. complete despite the recent upheaval in 26 CLIMATE-FRIENDLY FINANCE 27 GLOBAL GREEN BONDS Part of IFC’s Carrying IFC’s name and prized AAA credit rating, our medium-term green bond issues have to date raised just over $1 billion from institutional investors. It is confirmed. Staff will then negotiate the investment structure, which may include co-investors and IFC loan syndication, as well as supplemental concessional Approach being set aside in a separate account for investing exclusively in renewable energy, funding from donors, if needed. After a summary of the project RENEWABLE ENERGY OTHERS energy efficiency, and other climate- information is made public, IFC board ENERGY EFFICIENCY friendly projects in developing countries. approval is obtained. The most recent transaction came in Inclusion criteria used to determine $1 billion raised April 2012, when IFC issued its first eligibility are: green bond in the US market, raising • Renewable Energy: investments in $500 million for climate-friendly equipment and systems that enable the investments in emerging markets. use of energy from renewable resources It built on the momentum that began • Energy Efficiency: investments in when IFC issued its first green bond in equipment, systems, products, and April of 2010, a four-year, $200 million services that help reduce energy issue in Europe. The overall program has consumption per unit of output now seen 10 such transactions, with more • Others: investments that reduce to come in the near future. emissions in other ways, such as Climate change projects financed under sustainable forestry and agribusiness, the green bonds are subject to a number capturing and flaring or use of methane, of inclusion criteria and an official or carbon capture and storage. appraisal process. First, IFC staff identify Together, IFC, a member of the potential transactions, which are reviewed World Bank Group, and the IBRD, early on by climate specialists to ascertain which also issues green bonds for potential green bond eligibility. During sustainable development projects, have this appraisal, the amount of an raised more than $4 billion under this PHOTOS By issuing green bonds on the global capital investment that is green bond eligible is approach since 2008. markets, IFC has raised more than $1 billion from private investors for reuse in a wide range of climate-friendly projects. 28 CLIMATE-FRIENDLY FINANCE 29 GLOBAL PHOTOS In China, IFC has helped local financial institutions make more than $728 million in new energy efficiency loans. Russia’s Prime Finance Bank (opposite page, lower right) is building a growing business, backing local companies that reduce waste and lower emissions. It is part of IFC’s global effort to bring more local financial institutions into the growing SME energy efficiency market. LOCAL BANKS Financing Efficiency A profitable new business awaits local financial institutions in emerging markets: financing smaller companies’ energy efficiency needs. across northwest Russia. With IFC advisory support, the bank has trained its credit officers and adjusted its underwriting process to improve its Outside Saint Petersburg, a Russian ability to finance more SME energy Upgrades SME called EnergoStroy is busy building efficiency projects. and refurbishing steam- and water- Operated in partnership with the heating boiler houses, helping clients Global Environment Facility, Denmark, cut costs. This makes a difference in a and Finland, the IFC’s Russia Reducing energy demand country whose energy consumption is Sustainable Energy Finance Program in high-growth countries twice that of all its Nordic neighbors has helped 12 local banks finance 250 combined, largely due to reliance on projects worth $185 million, resulting in Helping local financial institutions tap outdated, inefficient industrial equipment. annual energy savings of $35 million into the lucrative SME energy efficiency By replacing an outdated boiler house and lowering greenhouse gas emissions market is one way IFC helps generate new in the town of Nevskaya Dubrovka, by 450,000 tons of CO2 per year. private capital for the fight against climate EnergoStroy provided heat and hot water A joint IFC/World Bank report had change. In some cases, we work broadly to 6,000 local residents before the onset found that Russia’s current energy across a country’s financial sector— of winter—saving the municipal inefficiency was equal to the annual as in Russia, or in the China Utility-Based administration up to $185,000 in annual primary energy consumption of France. Energy Efficiency Program operated energy costs. The project was supported Achieving Russia’s full energy efficiency in partnership with the GEF, Finland, by $513,000 in financing from Bank potential would cost the economy a total and Norway. Its participating banks Prime Finance, a partner of IFC’s Russia of $320 billion but save investors and have provided loans totaling more than Sustainable Energy Finance Program end-users about $80 billion a year, thus $728 million, financing more than that stimulates private investment in paying back in just four years. Benefits 170 energy efficiency and renewable energy efficiency for SMEs. to the total economy are much higher: energy projects. These have mobilized more Building on the success of its loan to up to $150 billion a year in energy cost than $1.6 billion in overall energy efficient EnergoStroy, Prime Finance Bank is now savings and additional earnings from investment, help avoid the equivalent of promoting sustainable energy finance gas exports. 18.4 million tons of CO2 emissions per year. 30 CLIMATE-FRIENDLY FINANCE 31 TURKEY RIGHT In Turkey, local leasing company YKL is a rising player in SME energy efficiency finance. YAPI KREDI Cutting energy costs brings bottom-line benefits. It also fights climate change— tackling the demand for energy, not just In countries such as Russia and China (see pp. 30-31) IFC helps bring multiple local financial institutions into the LEASING Building an Energy the supply. For as essential as increased use of renewable energy is, it is not the only route to a low-carbon future. A recent World profitable, high-impact energy efficiency market. The approach is the same in Turkey—whose industrial energy consumption is more than three times Economic Forum report also called for above the OECD average due to a reliance Efficiency Portfolio “wholesale changes in the way energy is on outdated equipment. distributed, stored, and consumed.” In 2008 YKL became the first local Identifying a $170 billion global market Turkish financial institution to partner for energy efficiency upgrade projects, with us in this regard. Looking for a Numbers that speak for the report stressed that “the cheapest specialized market niche, it too wanted to themselves source of energy is the energy never used.” develop its energy efficiency equipment Turkish equipment manufacturer Toskar business. An important resource for local would agree. It now has new systems that SMEs, YKL is a subsidiary of parent Yapi have brought energy costs down by Kredi Bank, winner of Turkey’s Bank of 20 percent. As a result, this fast-growing the Year award in 2011 from The Banker, SME’s output is now 50 percent higher a Financial Times publication. than before. Supported by the Clean Technology “In order to be a good firm—a global Fund, we provided YKL with a firm—you have to have machinery like $50 million line of credit in 2010, this in your inventory,” says Toskar’s when its SME energy efficiency finance general manager, Onur Tosun. He portfolio was just $18.8 million. Today financed his upgrades through our that same portfolio stands at $200 million. client Yapi Kredi Leasing (YKL), Turkey’s leading leasing company. ABOVE Cleaner production is good business, Turkish SMEs now realize. 32 CLIMATE-FRIENDLY FINANCE 33 INDIA RIGHT Chinese electric buses now run on high-efficiency PHOTOS India’s booming demand for laptops and batteries built by IFC client other modern technology creates a large e-waste Microvast. problem with considerable environmental impact. IFC-financed Attero Recycling (left) makes the most out of the used parts. 

 CLEANTECH Great green companies need early-stage equity to grow. Venture capitalists spot them early— one of the world’s largest emerging market investment houses. We played a similar role with Attero VENTURE CAPITAL Early-Stage Investment playing a critical role, and earning both financial and development-impact returns when success eventually comes. This is how IFC’s Cleantech investment Recycling Private Ltd., the pioneer of India’s nascent industry of recycling computers, cell phones, consumer electronics, and other technology-related products—or what is team operates. Our capital and expertise collectively called e-waste. for Climate Action help build high-potential emerging market Founded in 2008, Attero takes potentially technology companies, furthering IFC’s toxic, improperly discarded technology strong commitments to innovation and products and refashions them into a source fighting climate change. of secondary raw materials. Its integrated Electric vehicles, In Chongqing—one of the world’s largest approach avoids dumping hazardous e-waste recycling, metropolitan areas, with nearly 29 million substances and fights climate change— and more people—there are now 200 electric buses recycling metals from state-of-the-art running on our Chinese client Microvast’s e-waste technology requires far less energy batteries. These long-lasting, fast-charging and generates only a fraction of the lithium titanium oxide systems charge in carbon released in mining them. just 10 minutes, not the six to eight hours Seeing the potential for a powerful required by those in electric cars such as demonstration effect, IFC invested $5 million the Nissan Leaf and Chevy Volt. Their in Attero in 2010, joining a shareholder range is perfect for the new generation structure that included co-founders Nitin buses China is developing as part of its Gupta and Rohan Gupta, venture capital pledge to reduce greenhouse gas emissions funds such as Silicon Valley powerhouse by up to 45 percent by 2020. Draper Fisher Jurvetson, and others. IFC is In 2011, when Microvast was in its fifth also providing advisory services to help Attero A year after our investment, Attero Olivier Schwab said Attero was among year and still had limited revenues, IFC establish new supply chains to collect e-waste earned Technology Pioneer status from the those “revolutionizing the business made a $25 million equity commitment to sustainably. This will help it show that India’s World Economic Forum (WEF), which paradigms in their industries,” showing help it grow. We invested alongside Ashmore e-waste recycling business can be economically, cited it as one of the world’s 25 most that “innovative technology can be deployed Investment Management Ltd. of the UK, environmentally, and socially sound. innovative technology start-ups. The WEF’s to benefit business and society.”      34 CLIMATE-FRIENDLY FINANCE 35 AFRICA PHOTOS Helping Africa adapt to increasing water scarcity and other coming challenges of climate change is priority business for IFC, its donor partners, and private sector clients. VULNERABLE Helping the private sector combat climate change in Africa is a top priority for IFC. But it takes a special approach. work with it in Mozambique, Niger, and Zambia. Without the right response to rising COUNTRIES Facing Major Proven business models that generate results for climate action elsewhere are still developing there. In time we will help Africa build its first utility-scale renewable temperatures, coastal flooding, uncertain rainfall, and other expected impacts of climate change, the World Bank estimates, Mozambique’s GDP could fall by up to energy projects, while also investing in 14 percent. This could devastate a Challenges milestone projects in sustainable forestry country that already has one of the and other climate-friendly industries. world’s highest rural poverty rates. But there is no time to wait. PPCR-funded IFC market assessment So in the meantime we are helping teams are identifying a universe of Donor partnerships businesses not just anticipate, but adapt cutting-edge companies to support in to build the private to climate change, putting an early focus Mozambique. Some could be in sector’s role on agriculture, resource management, sustainable agriculture—for example, and reducing the greenhouse gas creating affordable new cooking fuels emissions of lighting and cooking. to replace charcoal, a key driver of Donor funds help IFC offset some big deforestation. Or they could be in finance, risks that have limited the role of private channeling new loans for sounder use investors. One key partner: the Climate of water in agriculture and industry. As Investment Funds (CIF), a $6.5 billion these projects emerge in the coming year, multidonor initiative designed to attract $10 million in PPCR concessional $40 billion in new investment. Operating financing will help IFC clients reach these since 2008, its work proves “solutions are and other markets. Additional support is possible at scale, and can be affordable,” available for Niger and Zambia. is shoring up coastal embankments to livelihood opportunities for at-risk and SMEs in drought-resistant crop says the World Bank’s Andrew Steer. In Asia, similar work with the PPCR is withstand cyclones and storm surges, communities. In Nepal, where climate- varieties, increasing farmers’ access One of the CIF’s funds, the $1.2 billion also underway in Bangladesh, the world's we are piloting adaptive agricultural related risks of floods, droughts, and to finance and insurance, and Pilot Program for Climate Resilience most climate-vulnerable country, and products, practices, and technologies for landslides are deadly and endemic, increasing climate adaptive capacity (PPCR), helps countries assess climate Nepal, the fourth-most threatened. climate-resilient agriculture in vulnerable we are developing climate-resilient through improved production and risk and react accordingly. In Africa, we In Bangladesh, where a PPCR program coastal regions and creating sustainable communities, helping train farmers marketing systems. 36 ADAPTATION 37 BANGLADESH SUSTAINABLE Bangladesh is losing 1.75 percent of its arable land each year—faster than its population growth of 1.5 percent. This Institute, and the International Rice Research Institute. With advisory and financial support from IFC, this AGRIBUSINESS Climate-Resilient Seeds means that by 2025, its poorly performing agricultural sector must feed 19 million more people with considerably less land. It is just one of many countries that partnership is producing and marketing stress-tolerant rice seeds able to withstand extreme weather conditions, while also developing contract farming and building must manage its agricultural resources farmers’ overall capacity. more sustainably. Already roughly a billion To date more than 40,000 farmers have people worldwide do not have enough to gained a better understanding of stress- eat. Without further action, the adverse tolerant seeds. The initiative has also Important for food security impact of climate change on agricultural expanded the market for high-yield seed output will only worsen the situation. varieties, increasing the supply of seeds In Bangladesh, climate change poses an that the private sector sells and creating especially serious challenge to agricultural demand by increasing farmers’ awareness. output. As a low-lying country situated More than 600 dealers and retailers have on a delta, it can expect increased flooding, also gained a better understanding of how saltwater intrusion, drought, and other stress-tolerant seeds work and their natural disasters. Rising salinity levels in production practices, and the government coastal regions are cutting the productivity of has introduced eight new stress-tolerant many seed varieties long used by its farmers. seed varieties. To address the issue, IFC is actively IFC’s advisory services in Bangladesh promoting climate-resilient agricultural are provided through the SouthAsia practices, working with both the private Enterprise Development Facility, managed and public sectors to build greater by IFC in partnership with the Norway efficiencies in the use of resources. We work and the UK. It is an innovative, sustainable, with four of the country’s largest private and scalable implementation model that seed companies (Energypac Agro-G Ltd., moves effectively from market entry to ABOVE Bangladesh’s coastal farmers are already feeling the effects Supreme Seed, ACI Ltd., and Lal Teer pilot programming and stimulates of climate change, with increasing salinity lowering the impact of their usual seeds. IFC is helping the local private sector develop Ltd.), the Bangladesh Rice Research sustainable market uptake. new climate-resilient seeds that work well under the new conditions. 38 ADAPTATION 39 COLOMBIA RIGHT IFC’s report on climate PHOTOS Using heat maps risk in Colombian ports broke and other analytical techniques, new ground, using state-of- Climate Risk and Business IFC climate risk forecasters helped poRts the-art forecasting models. Colombian private port operator Terminal Marítimo Muelles el Bosque MEB determine how to prepare Cartagena, Colombia Executive Summary for coming changes. CLIMATE RISK Climate change is real. It is underway economic performance, growth, and and will intensify in the coming decades, development. In this case, MEB used posing far-reaching risks and impacts for the information to make a $30 million FORECASTING virtually all private companies. investment in new facilities to protect its Forward-looking firms that obtain early port against future flood risks. information on coming changes in The study identified a number of Anticipating Change resource stocks and weather patterns can specific climate change risks expected to anticipate change rather than react to it, impact specific port activities in the making the right investments for medium to long term, such as: adaptation. Those who don’t may suffer • Rising sea levels severe consequences. • Increasing levels of precipitation A new factor in This is why, in 2008, IFC initiated its • More severe tropical storms infrastructure finance Climate Risk Program to produce a series and surges of pilot studies analyzing climate risks and • Rising temperatures adaptation options for private sector • Changing trade patterns. projects in several different sectors and “The IFC study is one of the first to regions. One of the first studies was done analyze how businesses and commerce will in 2011 with support from Finland and be affected by the changing environment in Norway for Colombia’s Muelles el Bosque Colombia, and it will have a large impact on (MEB), a private firm that has developed how we address climate change in the future,” and managed a major port in Cartagena said MEB President Gabriel Echavarria. under a long-term government concession. A number of adaptation options to Ports are among the installations most prevent or reduce climate change impacts exposed to climate change, and thus must from these risks were also made, weighed learn to adapt —not just knowing the risks, against their financial implications for the but knowing how to manage them. Their company. Its management then integrated ability to adapt to climate-related change the information into its own investment other ports in Colombia can be affected by change risks effectively and are seen as will not only impact their investors, but— decision-making. climate change. There and in other coastal climate-resilient by its clients, insurers, given the export and import volumes they While the report focused on climate countries, port operators and other and other stakeholders could gain a handle—profoundly impact worldwide change risks to MEB, it also explored how industry leaders who manage their climate competitive advantage. 40 ADAPTATION 41 GLOBAL CONTACT US PHOTO IFC’s portfolio measurement helps track the climate impact of all projects financed. Headquarters CREDITS Washington, D.C. IFC Corporate Relations 2121 Pennsylvania Ave., N.W. Telling Our Story— Washington, D.C. 20433 USA Climate Change Telephone: (1-202) 473-3800 Produced by Western Europe IFC Corporate Relations Department Paris 66 Ave. d’Iéna Photography 75116 Paris, France Dominic Sansoni/World Bank (front cover) Jonathan Ernst/World Bank; IFC PORTFOLIO Telephone: (33-1) 4069-3060 In each of the last two years, IFC has departments other than Global Financial World Bank Photos; Shuoren Energy World Bank Photos (page 37) invested $1.7 billion in clean energy and Markets. This methodology is consistent High-Tech Co. (inside cover) Zahidul Naim Zakaria/IFC, Europe, Middle East, and North Africa climate friendly projects, representing with the widely used carbon accounting Istanbul Mario Cucinella Architects (page 6) IFC Photos (page 39) MEASUREMENT 14 percent of total commitments. We’re methodology for private business established Buyukdere Cad. No: 185 Kanyon Ofis Blogu IFC Photo (page 7) Studio Grafik (pages 40 and 41) proud of this record but want to do by the World Resources Institute and World Kat 10 Scatec Solar (page 8) Suntech Power Holdings Co. (page 42) more—our goal is to grow this climate Business Council for Sustainable Development Levent 34394 Istanbul, Turkey Azure Power Private Ltd. (page 9) From Footprint to Imprint business to at least 20 percent of our and builds on the Carbon Tool developed by Telephone: (90-212) 385-3000 Ram Power Corp. (pages 10 and 11) long-term financing by 2015. IFC France’s Agence Française de Développement. Lighting Africa (page 12) Design Partner mobilizes private capital for climate action The tool provides investment departments East Asia and the Pacific A. Jacobson/IFC, Marcene Broadwater/ Design Army from many sources, in many ways— with a simple way to estimate gross operational Hong Kong IFC (page 13) including issuing its own green bonds. emissions and actual project emissions. 14/F, One Pacific Place Abengoa Solucar (pages 14 and 15) Printing We are also developing metrics to quantify For example, we can use the tool to 88 Queensway Road Cenveo Tracking results for Divya Singh/IFC (page 16) Hong Kong increased impact not just dollar volume of our commitment estimate greenhouse gas emissions that come Solar Power Co., Vladimir Mihailovski/ Telephone: (85-2) 2509-8100 but also actual greenhouse gas emission from a cement production facility—both IFC (page 17) reduction volume. How do we get there? direct (on-site fuel combustion, carbon South Asia Adi Setiadi, GMB Akash/Panos Pictures, IFC measures greenhouse gas emissions dioxide produced during clinker production, New Delhi Agencia de Noticias do Acre (page 19) associated with our own direct investment etc.) and indirect (electricity purchases). Maruti Suzuki Bldg SuperStock (page 20) IFC has offices in more than activities. Our analysis identifies potential This kind of information is now used Plot No.1, Nelson Mandela Road 80 countries around the world. Vasant Kunj Mriya Agroholding (page 21) mitigation opportunities and detailed throughout the institution to give IFC teams New Delhi, India 110070 Babish VB (page 22) information enabling the assessment of important insight on where we stand and Telephone: (91-11) 4111-1000 Babu Babu/Reuters (page 23) business risks associated with a carbon- where we should go to build our climate The opinions expressed in the article on Wang Jianhua, Yang Aijun/World Bank, pages 12-13 are those of the author and constrained future. This analysis also is business and meet the development Sub-Saharan Africa David Gray/Reuters (page 25) Johannesburg do not necessarily reflect the views of the assessing the positive impact on emissions milestones our clients expect us to reach. FAO, Global Partnership on United States Department of State. 14 Fricker Road, Illova, 2196 connected with our climate-related Today’s IFC projects must include Output-Based Aid (page 27) Johannesburg, South Africa investments and advisory services. information on their actual amount of Telephone: (27-11) 731-3000 IFC Photos (page 29) IFC has been measuring its own greenhouse gas emissions reduced and their IFC Photo (page 30) investment portfolio’s greenhouse gas greenhouse gas intensity. These metrics also Latin America Nordic Environment Finance Co. (page 31) footprint since February 2009. To do so, form a building block for various types of and the Caribbean World Bank Photos (pages 32 and 33) IFC developed the Carbon Emissions analyses such as greenhouse gas impacts from Washington, D.C. Microvast (page 34) 2121 Pennsylvania Ave., N.W. Estimator Tool for estimating greenhouse energy efficiency and renewable energy, Attero Recycling Private Ltd., Washington, D.C. 20433 USA gas emissions from investments with upstream and downstream emissions impacts, Telephone: (1-202) 473-3800 Loty Salazar/IFC (pages 35) immediate applicability to all its and greenhouse gas shadow-cost analysis. 42 SPECIAL FOCUS 43 STAY CONNECTED OUR VISION Web and Social Media Resources That people should have the opportunity to escape poverty and improve their lives. Facebook www.facebook.com/IFCwbg Twitter OUR VALUES www.twitter.com/IFC_org Hashtags: #IFC and #TOSclimate •  Excellence LinkedIn •  Commitment http://on.ifc.org/ifcLinkedIn •  Integrity Scribd •  Teamwork www.scribd.com/IFCpublications •  Diversity YouTube www.youtube.com/IFCvideocasts Telling Our Story OUR PURPOSE www.ifc.org/tellingourstory To create opportunity for people to escape poverty and improve their lives by catalyzing the means for inclusive and sustainable growth, through: •  Mobilizingother sources of finance for private enterprise development •  Promoting open and competitive markets in developing countries •  Supporting companies and other private sector partners where there is a gap •  Helpinggenerate productive jobs and deliver essential services to the poor and vulnerable To achieve its purpose, IFC offers development- impact solutions through firm-level interventions (direct investments, Advisory Services, and the IFC Asset Management Company); promoting global collective action, strengthening governance and standard-setting; and business enabling environment work. Creating Opportunity Where It’s Needed Most ifc.org 2012 44 SPECIAL FOCUS