Scale up climate finance through the financial sector – “30 by 30 Zero”

The implementation of NDCs in emerging markets requires vast funding amounts, for which the financial sector plays a critical role. However, numerous aspects, such as limited under-standing of climate financing opportunities and a lack of consistent policies, have so far pre-vented sufficient mobilisation of funds. To increase climate lending, the project supports the creation of domestic markets for climate financing in the partner countries. It follows a holistic approach, working at the political, market and financial institutions levels. This includes the alignment of financial sector strategies to support NDC implementation. In addition, by 2030, the share of climate lending in the participating banks' total credit portfolio shall be significantly increased, while climate and carbon-related risks are reduced. Finally, the project fosters climate investments through the development of domestic green bond markets.

Project data

Countries: Egypt, Mexico, Philippines, South Africa
IKI funding: 50,000,000.00 €
Duration: 01/2021 till 12/2028
Status: open
Implementing organisation: International Finance Cooperation (IFC)
Political Partner: Department of Finance - Philippines

Ministry of Finance and Public Credit - Mexico

National Treasury

The Central Bank of Egypt
Implementing Partner: The World Bank Group

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State of implementation/results

Egypt:
- The program supports several financial institutions in the issuance process of Green and Sustainability bonds by providing capacity-building.
- The program supported several banks by conducting portfolio reviews to identify climate finance baseline and potential green investments and provided multiple trainings and workshops to staff and management members.
Mexico:
- World Bank’s Development Policy Loan of USD 1 billion provided to the Ministry of Finance to support the development of ESG disclosure regulations and development of the Sustainable Taxonomy.
- Capacity-building to impulse progress of sustainable/thematic issuances in capital markets: distribution of 100 scholarships for the CFA Institute Certificate in ESG Investing; financing of 12 scholarships for the Mexican Institutional Stock Exchange (BIVA)’s Chief Sustainability Officer training’s 5th generation; delivery of a specialized training on Sustainability-Linked-Bonds and Transition Bonds to 34 participants from private sector corporates and financial institutions (1st generation) with Carbon Trust.
- Diagnostic mission conducted on barriers and opportunities to strengthen the corporate governance practices in Mexico, to enable the acceleration of sustainable/thematic issuances.
- Draft roadmap developed to scale up financing for distributed generation of renewable energy, based on the insights of the previously conducted high-level multistakeholder roundtable dialogue.
- Continued one-on-one advisory support to Santander Mexico to develop its green building portfolio.
- Updated market study on the state of sustainable finance in Mexico.
- Capacity-building for financial institutions: Completed the Renewables Academy course 1st generation on financing renewable energy for 16 financial sector participants.
Philippines:
- The 2nd Philippine Climate Forum, themed “Gearing Towards a Low-Carbon and Climate-Resilient 2030,” was held on June 5-7, 2024.
- The 2nd cohort of the Green Energy Finance Specialist (GEFS) Program was completed and certified 14 officers from the financial sector on green energy and energy efficiency.
- The program supports a bank in its Climate Smart Agriculture (CSA) project. The team concluded with technical support activities, including improvements in credit scorecards and training for pilot implementation and partnership management.
South Africa:
- The program signed an agreement with the Johannesburg Stock Exchange to provide capacity building to potential sustainable bond issuers.
- The program provides technical support to a South African Bank to develop their climate-smart agriculture (CSA) strategy.
- The program is developing a sector roadmap for CSA for the country in line with the NDC. 22 recommendations were identified and are being reviewd by stakeholders.
- On May 24th, the first blended finance project under the program reached commitment. BMWK funds will support a US$250 million senior loan from IFC to First Rand to increase the bank's lending for certified green homes and commercial spaces. Designated portions of the home loan portfolio will be specifically allocated to build affordable housing and to women homeowners.