Stockholm (NordSIP) – A joint fund, supporting renewable and clean energy solutions as well as climate projects in developing countries, has been set up by Finland together with the International Finance Corporation (IFC), a part of the World Bank Group.
The Finland-IFC Blended Finance for Climate Program fund was presented in Helsinki and Vaasa across two seminars held December 14 and 15 by IFC Vice President Nena Stoiljkovic and Finnish Minister for Foreign Trade and Development Kai Mykkänen. It was initially agreed upon in October in Washington, D.C. Finland is to invest €114 million into the fund over the next five years, representing the most significant funding yet targeted at international climate work by that country. The fund’s duration will be 25 years.
The collaboration with the IFC, the largest private sector development funding organisation in the world, is expected to open up opportunities for Finnish companies with competence in climate issues and expertise in the new fund’s priority sectors. The partnership is also expected to open up new markets for climate change solutions in countries where investments are scarce due to challenging operational environments or undeveloped markets. The IFC has offered the quid pro quo of matching Finland’s investments in all projects.
The Finland-IFC Blended Finance for Climate Program will be invested exclusively in lower- or lower-middle income developing countries, where the purpose of funding is to promote development impact in areas including energy efficiency, renewable energy, sustainable forestry and land use, meteorology, and water/wastewater solutions. The Program seeks to address UN Sustainable Development Goal #2 (sustainability of food security and agriculture), SDG #6 (sustainable use of water), SDG #7 (supporting sustainable energy) and SDG #13 (combating climate change).
The IFC will make investment decisions in consultation and accordance with the conditions specified together with the Finnish Ministry of Foreign Affairs, and report annually on the Program’s impact. Funding instruments include loans to companies, capital investments and guarantees.
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