The International Finance Corporation (IFC) and the UK government have announced a new partnership to help transform construction markets by crowding in as much as $2 billion in public and private sector financing for certified green buildings in emerging markets.
The UK-IFC Market Accelerator for Green Construction Program will be the first UK-IFC partnership in blended concessional finance for climate-change mitigation.
The UK government’s contribution of £105 million will include £80 million for investments and £25 million for advisory services.
The funds will be used to incentivise the development of green buildings through certification with IFC’s EDGE and other leading certification systems.
Globally, buildings generate 19% of energy-related greenhouse gas emissions and consume 40% of electricity.
Every year, an additional 5.5 billion square metres of floor space is constructed, mainly in emerging markets where green construction makes up only a small fraction of new buildings.
The global built environment is expected to double by 2050, and green construction can secure lower emissions for decades. Read more: UCT wins big at Greenovate awards
By accelerating the construction of certified green buildings, the programme aims to mobilise $2 billion in investments to help tackle climate change.
“Green buildings represent a powerful opportunity to address climate change in emerging markets,” said Hans Peter Lankes, IFC’s vice president for economics and private sector development.
“Investments in green buildings certified with EDGE and other standards could represent a $3.4 trillion opportunity over the next decade. Blended finance is a valuable tool to help create new markets for green construction by mobilising private capital through financial intermediaries,” Lankes noted.
Greener construction practices
According to Claire Perry, the UK's minister of state for energy and clean growth, to date the UK has supported 47 million people across the globe cope with the effects of climate change and provided 17 million people with improved access to clean energy, "helping to raise $100 billion a year by 2020 and sharing expertise to keep us secure too".
Perry further highlighted: “One year on from the launch of our modern Industrial Strategy, we are making the most of the economic opportunities that go hand-in-hand with tackling climate change.”
“This exciting new programme will encourage greener construction practices in developing countries to improve energy efficiency and reduce emissions, creating opportunities for UK businesses to invest in new markets,” she concluded.