Washington, D.C., January 31, 2018—IFC,
a member of the World Bank Group, and the government of Canada have formed
a blended finance partnership that will use public funds to unlock larger
amounts of private sector investments to expand renewable energy in Sub-Saharan
The program, called Canada-IFC Renewable Energy Program for Africa,
involves a contribution of 150 million Canadian dollars from the Canadian
government. IFC will use these funds to catalyze private sector investment
in renewable energy by providing concessional financing blended alongside
IFC’s own account resources to mitigate a variety of risks that can deter
private investment in renewable energy. This is expected to improve access
to affordable and sustainable energy services, reduce the dependency on
fossil fuels, and bring African countries a step closer to accomplishing
their sustainable development goals.
“Tackling climate change is a main priority for this generation and harnessing
the abundance of natural resources in Africa to provide clean and sustainable
energy is a step in that direction. Canada is proud to be a part of this
initiative that builds on our successful blended finance partnership with
the IFC-Canada Climate Change Program,” said the Honourable Marie-Claude
Bibeau, Canada’s Minister of International Development and La Francophonie.
“Creating opportunities for investment in renewable energy is essential
for the people of Africa—and good for the world," said IFC CEO Philippe
Le Houérou. “The expansion of renewable energy in Africa has already generated
tens of thousands of local jobs, and there is significant potential for
additional economic and development gains in new areas like energy storage
and off-grid solar."
The partnership reflects Canada's commitment under the 2015 Paris Agreement
to support developing countries in their transition to sustainable and
resilient low-carbon economies. The contribution is aligned with the principles
of the Africa Renewable Energy Initiative, which aims to scale up renewable-energy
generation in Africa.
In 2011, Canada was the first bilateral partner to provide IFC with a contribution
to support blended finance investments and advisory services in all areas
of IFC’s climate work around the world, via the establishment of the 276
million Canadian dollars IFC-Canada Climate Change Program.
Blended finance is a promising tool that IFC uses to unlock private capital.
Private investors often avoid projects that involve untested approaches—or
are in markets perceived as too risky. Blended finance entails using concessional
funds to help mitigate specific investment risks, opening the door to greater
sums of private capital. During the last fiscal year, IFC used $188 million
of concessional funds to catalyze $726 million in private sector investment.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In fiscal year 2017, we delivered a
record $19.3 billion in long-term financing for developing countries, leveraging
the power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org