IFC Climate Investment Opportunity Report Dec FINAL

Climate Investment
Opportunities in
Emerging Markets
An IFC Analysis
About IFC
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Climate Investment
Opportunities in
Emerging Markets
An IFC Analysis
Acknowledgements
This report was prepared by the Climate Business James Michelsen, Aziza Mohammed, Joyita Mukherjee,
Department (Christian Grossmann, Director), Climate Rusmir Music, Quyen Nguyen, Ahmad Slaibi, Peer Stein,
Finance and Policy Group (Vikram Widge, Head). The Vladimir Stenek, Daniel Street, Sean Whittaker and
lead authors were Tom Kerr, Aditi Maheshwari and Nina Zegger. The following World Bank colleagues also
John Sottong. Thanks to Kruskaia Sierra-Escalante and provided important contributions: Sebastian Wienges,
Marcene Broadwater and Steve Hammer, Manager Stephane Hallegatte, Julie Rozenberg, and Ulf Narloch.
of the World Bank Climate Change Policy Team, for
The following regional colleagues provided invaluable
the helpful support of their teams. Sona Panajyan
data and input: Simon Andrews, William Trant Beloe,
managed the communications around the report and
Julia Brickell (climate anchor), Tom Jacobs, Autif Sayyed,
Riham Mustafa supported the media outreach. Esther
Eugene Sullivan, Noel Verdote, Ronald Ping Hei Wu,
Rojas-Garcia led on research and data analysis for
Yuan Xu and Dianjun Zhang for the East Asia and the
the report, with additional support provided by Tom
Pacific Region; Patrick Avato (climate anchor), Katerina
Witt and Yunziyi Lang. Report design and production
Levitanskaya and Ilya Minyaev for the Europe and
assistance was provided by Maria Cristina Sy and
Central Asia Region; Kristtian Rada (climate anchor)
Neetu Aulakh. Creative design for the report came from
and Oceane Seuleiman for the Latin America and
Corey McPherson Nash and Clarity Editorial edited the
Caribbean Region; Jaikishin Asnani, Ahmed Ali Attiga,
document. Printing and layout services were provided
Eric Becker, Aurelien Boyer, Joumana Cobein, Youssef
by the World Bank’s in-house printing and multimedia
Habesch (climate anchor), Cedric Joutet, Alexandre
team, led by Gregory Wlosinski.
Leigh, and Bryanne Tait for the Middle East and North
The authors are very grateful for insightful peer review Africa Region; Chandrasekar Govindarajalu and Rajesh
and expert input from IFC colleagues in Washington, Miglani (climate anchor) for the South Asia Region; and
DC, including Steven Baillie, Scott Cantor, Peter Cook, Eme Essien, Saleem Karimjee (climate anchor), Zoe Lees
Charlene Coyukiat, Lisa Da Silva, Corinne Figueredo, and Dan Shepherd for the Sub-Saharan Africa Region.
Shari Friedman, Prashant Kapoor, Geoff Keele, Berit
The authors also wish to thank Caroline Holtum from
Lindholdt Lauridsen, Jeremy Levin, Liane Lohde,
the We Mean Business Coalition for her contribution.
Contents
iv Foreword
v Executive Summary
1
Climate-Smart Investment
Opportunity after the Paris
Agreement
101 Unlocking Climate

Investment Opportunities 13 31 47
East Asia Pacific Latin America and South Asia
114 Annex I: Methodology for estimating
climate-smart investment potential Climate-Smart the Caribbean Climate-Smart
Investment Potential Climate-Smart Investment Potential
117
Annex II: Data sources informing
estimates of investment potential
Investment Potential
COUNTRY PROFILES: COUNTRY PROFILES:
125
Annex III: Data sources for country China COUNTRY PROFILES: Bangladesh
indicators
Indonesia Argentina India
Philippines Brazil
Vietnam Colombia
Mexico
ii Climate Investment Opportunities in Emerging Markets | An IFC Analysis

G LO B A L T H E M E S
24 Achieving green growth in

emerging economies
40 Sustainable cities
54 Green buildings
64 Adaptation and the private sector
86 Public-private partnerships for

climate investment
94 Climate smart agriculture
104 Carbon pricing is gaining

momentum
B OX E S
3 What is a Nationally Determined

Contribution?
4 Growing climate risks
59 75 89
5 Private sector taking climate action
6 The World Bank NDC platform
7 IFC: ramping up climate

investments
10 Estimating climate investment

potential
Sub-Saharan Africa Eastern and Central Asia Middle East and
Climate-Smart Climate-Smart North Africa 18 Venture capital for alternative
energy transport technologies
Investment Potential Investment Potential Climate-Smart
Investment Potential 58 EDGE – Excellence in Design for
COUNTRY PROFILES: COUNTRY PROFILES: Greater Efficiencies
Côte d’Ivoire Russian Federation COUNTRY PROFILES: 68 Scaling Solar: unlocking private
investment in large scale solar
Kenya Serbia Egypt
Nigeria Turkey Jordan 107 Green finance
South Africa Ukraine Morocco 109 Financial innovation for tackling
climate change
110 Using blended climate finance to

mobilize private sector capital
Contents iii
Foreword
There has never been a better time to invest in climate than $15 billion in long-term financing for renewable power,
solutions. The cost of clean technologies has fallen energy efficiency, sustainable agriculture, green buildings and
dramatically, governments are embracing policies that private sector adaptation to climate change, while further
encourage climate investment, and the Paris Agreement has mobilizing an additional $10 billion from other entities. IFC
galvanized support for measures that keep global warming is one of the world’s largest financiers of renewable energy
under two degrees Celsius. for developing countries. In fiscal year 2016, IFC invested and
mobilized $776 million in renewable energy generation and
This report shows that the historic Paris Agreement on climate
component manufacturing. IFC’s cumulative financing for
change that has recently come into force will help to open up
green buildings has now surpassed $2 billion.
nearly $23 trillion in opportunities for climate-smart investments
in certain emerging markets between now and 2030. Based We are not stopping there. IFC has pledged to step up its
on the national climate-change commitments and underlying climate investments to 28 percent of annual commitments to
policies of 21 emerging-market economies, representing 48 a goal of $3.5 billion a year by 2020, and leverage an additional
percent of global emissions, it identifies sectors in each region $13 billion of private sector cofinancing annually by 2020, while
with the greatest potential for investment—from climate- also managing climate risk and increasing impact. We are
Philippe le Houerou resilient infrastructure in South Asia to clean energy in Africa. helping the private sector confront climate change through
Executive Vice President, IFC investments, innovative financing, and advisory services, and
As a result of massive cost reductions, solar photovoltaic (PV)
we are working closely with our World Bank colleagues and
and wind power are now mainstream. Global investment in
other partners to address regulatory and policy obstacles to
clean energy last year was nearly $350 billion—more than
green growth.
twice the amount invested in coal- and gas-fired power
generation. At the same time, farmers are investing in more We invite you to join us in seizing the climate investment
productive, climate-resilient agricultural practices and the opportunity. Businesses can develop new financial and
green buildings market has doubled every three years for the business models to deliver the next wave of climate
past decade. solutions in transport, waste, agriculture and energy
storage. Governments have made a great start by bringing
IFC stands ready to support the private sector in its quest
the Paris Agreement so quickly into force. They must now
to invest more in industries that will improve the climate
make good on the promise of Paris by implementing a
and yield healthy returns on investment. Our six decades of
set of clear, investment-friendly policies. We need more
experience have shown that we can create and develop new
partnership and coordinated action between government,
markets for clean, efficient solutions.
business and civil society.
Since 2005, IFC has built up experience in private sector
Working together, we can reduce climate’s impact on the
climate solutions, project by project. We have invested more
poor, while creating new markets for the private sector. IFC’s
commitment to step up as an advisor, investor and partner has
iv
never been stronger.
Climate Investment Opportunities in Emerging Markets | An IFC Analysis
Executive Summary
Climate-smart investment is mainstream
investment
A dramatic drop in the price of clean technologies and the rise of smart
policies are driving businesses to climate-smart investments. 2015 was
another record-breaking year for investment in new wind power, solar
power, and hydropower plants: 152 gigawatts (GW) of renewable
energy became operational, and global investment in clean energy
increased to $348.5 billion – more than twice as much as coal- and gas-
fired power generation. Global energy-efficiency potential is large and
growing – governments and business invest more than $300 billion each
year to improve the efficiency of power grids, transport, industry, and
buildings. The global green buildings market continues to double in size
every three years. Climate-smart agriculture is also a growing private
sector opportunity, as companies seek to increase crop resilience and
food productivity, as well as their profits.
The Paris Agreement accelerates

opportunities for climate-smart investment
The growth in greenhouse-gas emissions is expected to come mainly
from emerging markets – which require $4 trillion per year to build
and maintain infrastructure. How these rapidly growing middle-income
nations respond to their infrastructure needs will directly affect whether
we can achieve the promise of the Paris Agreement. The good news is
that these economies can invest in new, climate-resilient infrastructure unprecedented pace at which the Agreement has been ratified and come
and offset higher upfront costs through efficiency gains and fuel savings. into force, sends a clear signal of the low carbon trajectory for future
growth and opportunities. A total of 189 countries submitted national
The Paris Agreement will help to accelerate climate-smart market
plans that target aggressive growth in climate solutions, including
growth. Growing awareness of climate risks and opportunities has seen
renewable energy, low-carbon cities, energy efficiency, sustainable forest
the private sector urging governments to use the Agreement to provide
management, and climate-smart agriculture. IFC assessed the national
the clear framework and signal needed to enable investment. The
climate change commitments and other policies in 21 countries and
Executive Summary v
SHADES OF GREEN: INVESTMENT POTENTIAL BY REGION AND SECTOR ($ BILLION)
n
n io
i o i ss
gy
ut m
s
cy er
le
rib ns
ab
en En
ro
al
ist Tra
m
ew
yd
t
ci ial
gs
or
l
s
er
ta
lH
as
& tric
Effi str
en
in
sp
te
th
o
d
om
ar
i ld
al
bt
lR
du
an
as
in
ec
eo
D
Sm
l
Bu
So
Su
W
W
Al
Tr
In
Bi
El
G
East Asia Pacific 231 537 48 34 16 866 392 143 13,235 1,357 53 16,046 >1000
Latin America and

Caribbean
118 44 45 11 14 232 0 21 901 1,460 26 2,640 >500<1000
South Asia 111 211 16 0 0 338 0 85 1,543 255 13 2,234 >250<500
Europe and
Central Asia
51 39 6 7 6 109 0 57 410 78 11 665 >100<250
Sub-Saharan
Africa
27 63 3 3 27 123 0 0 153 499 8 783 >50<100
Middle East and

North Africa
50 46 0 1 0 97 21 1 92 50 4 265 >25<50
Total Climate-
Smart Investment
Potential by Sector
588 940 118 56 63 1,765 413 307 16,334 3,699 115 22,633 <25
($ billion)
finds an initial investment opportunity of $23 trillion from 2016 to initial investment opportunity of nearly $23 trillion from 2016 to 2030
2030 in key sectors (see table above). (see graph on next page). This figure is likely an underestimate as there
are data gaps for important sectors like climate-smart agriculture.
An estimated $23 trillion in climate-smart Key climate-smart investment opportunities in these countries include:
investment opportunities exists in the • Green buildings in the East Asia: China, Indonesia, the Philippines,
emerging markets outlined in this report and Vietnam have a climate-smart investment potential of $16 trillion,
IFC assessed the national climate change commitments and other most of which is concentrated in the construction of new green
policies in 21 emerging markets, representing 62 percent of the world's buildings.
population and 48 percent of global GHG emissions. Based on this • Sustainable transport in Latin America: Argentina, Brazil, Colombia,
information, IFC estimates that key sectors in these countries have an and Mexico have an investment potential of $2.6 trillion, almost 60
percent of which is for transport infrastructure.
vi Climate Investment Opportunities in Emerging Markets | An IFC Analysis

efficiency is a priority sector, while renewable energy investments are
Climate-Smart Investment Potential only beginning to accelerate.
2016 - 2030 ($ billion)
• Renewables in the Middle East and North Africa: Egypt, Jordan,
and Morocco’s total climate-investment potential is $265 billion,
$265 $22,633 over one-third of which is for renewable energy generation ($97
$665
$783 billion), while 64 percent ($169 billion) is for climate smart buildings,
$1,143
transportation, industrial energy efficiency, electric transmission and
$2,234 distribution, and waste solutions.
$2,640 Unlocking private investment for climate

solutions
To unlock private investment, governments must prioritize the following
$14,903
actions:
• Achieve NDC goals. Countries should act quickly to integrate their

NDC commitments into national development strategies and budget
processes. Governments must put in place clear and consistent policies
– such as carbon pricing, performance standards, and market-based
China LAC SAR EAP SSA ECA MENA Total
support – and ensure that climate considerations are integrated into
Note: EAP = East Asia Pacific; ECA = Europe and Central Asia; LAC = Latin America Carribean; other sector policies.
MENA = Middle East and North Africa; SA = South Asia; SSA = Sub-Saharan Africa.
• Strengthen the private sector investment climate. Attracting private
investment will require a robust domestic enabling environment,
with reduced risks, strong competition, and measures to promote
• Climate-resilient infrastructure in South Asia: Bangladesh and investment and capital flows.
India have an investment potential of about $2.2 trillion, which is
• Strategically use limited public finance. Government budgets will
concentrated in the construction of green buildings, ports and rail
not be enough to address climate change. Governments should use
transport infrastructure, and energy efficiency.
public funds strategically to mobilize private capital by, for example,
• Clean energy in Africa: Côte d’Ivoire, Kenya, Nigeria, and South reducing risk and providing project support.
Africa’s total investment potential is nearly $783 billion, which
Although many countries are making good progress on amending
is spread across renewable energy generation ($123 billion) and
policies and improving investment climates, more can be done to set
buildings and transportation ($652 billion).
comprehensive long-term targets, provide targeted public finance,
• Energy efficiency and transport in Eastern Europe: Russia, Serbia, eliminate counterproductive policies (including fossil fuel subsidies),
Turkey, and Ukraine’s estimated climate-smart investment potential is and provide the right incentives, such as carbon pricing and market-
$665 billion, with over half focused on new green buildings. Energy responsive support mechanisms.
Executive Summary vii

Targeted country dialogues between government, the private sector, This report is just the first step. In order to make real progress and
and civil society could help identify and remove the barriers preventing unlock the world’s climate-smart investment potential, additional
investment, test elements of NDCs, and offer suggestions for private research, information exchange, and public-private dialogue are
finance and business models – as well as policy changes and public needed. IFC stands ready to work with like-minded partners to turn the
finance tools – that are needed to unlock private investment. investment potential identified in this report into reality, and to expand
this analysis to other countries and regions.
viii Climate Investment Opportunities in Emerging Markets | An IFC Analysis

Climate-Smart
Investment Opportunity
after the Paris Agreement
Executive Summary 1
O V E RV I E W Climate-smart investment is mainstream
investment.1
For years, companies around the world resisted the idea of going green,
arguing that they could not afford it. But a dramatic drop in the price
Climate-Smart of climate-smart technologies – especially renewable energy – and

the rise of smart policies like carbon pricing, which charges firms for
releasing greenhouse gases, are refuting that argument. Companies are
Investment also increasingly recognizing the need to ensure that their operations
are resilient against supply chain disruptions and other effects of
climate change. As a result, forward-looking businesses are moving
Opportunity after the quickly to climate-smart investments because it is good for the bottom
line. Wall Street stalwarts like Morgan Stanley report that investing
Paris Agreement in sustainability usually meets, and often exceeds, the performance of
comparable traditional investments.2
Renewable energy is increasingly the choice for rapidly growing

countries seeking to meet their economic growth, energy access, and
climate change goals. The year 2015 was another record-breaking one
Climate-Smart Investment Potential
2016 - 2030 ($ billion) in new wind, solar, and hydro plant investment: 152 gigawatts (GW) of
renewable electricity became operational, equal to Africa’s total power-
generating capacity. Global clean energy investment increased to $348.5
$265 $22,633
$665 billion.3 Overall, more than twice as much was invested in renewable
$783
energy than in coal and gas-fired power generation ($130 billion in
$1,143
2015).4
$2,234
Renewable energy is not the only climate-related sector primed for
growth. Despite lower oil and gas prices, investments in energy efficiency
$2,640 continue to grow, driven by assertive and comprehensive policies.5 The
International Energy Agency estimates that more than $300 billion is
invested annually to improve the efficiency of power grids, transport,
$14,903
industry, and buildings.6 To put this into perspective, this is equal to
or higher than annual investments in coal, oil, and natural gas power
generation.7 Existing investments in energy efficiency continue to yield
multiple benefits including through returns to energy consumers valued
at $5.7 trillion over the last 25 years and reduced emissions.8 By 2050,
China LAC SAR EAP SSA ECA MENA Total more than 6 billion people will live in cities, creating a pressing need for
a host of infrastructure services, such as water, waste and sanitation, and
Note: EAP = East Asia Pacific; ECA = Europe and Central Asia; LAC = Latin America Carribean; urban transport solutions. Global green building activity has doubled
MENA = Middle East and North Africa; SA = South Asia; SSA = Sub-Saharan Africa.
every three years for over a decade, with more growth expected,
2 Climate Investment Opportunities in Emerging Markets | An IFC Analysis
particularly in developing countries.9 This creates opportunities for eco- B OX
friendly construction and helping cities prepare for climate change.
Climate-smart agriculture – measures that increase productivity, enhance

resilience, reduce greenhouse gases, and address food security – is also
a growing business, as companies around the world seek to enhance
resilience, food productivity, and their bottom line.10 A recent study
found 14 major business opportunities worth US$2.3 trillion annually
by 2030 in the sector, with developing countries capturing more than
two-thirds of the estimated economic value due to their large shares
of arable land, high future consumption growth and large potential
efficiency gains.11 Adaptation investments in 2015 amounted to $7
billion globally, and multilateral development banks have started
to increase private investment in climate resilience, with promising
opportunities for growth.12 There are also good opportunities in the area
of climate-smart financial solutions. These can range from green bonds
What is a Nationally
issued by governments and international institutions to microloans for
entrepreneurs. The value of new green bonds issued tripled three years
in a row, and reached $42 billion in 2015.13
The Paris Agreement accelerates Determined

Contribution?
opportunities for climate-smart investment.
Private investment in climate solutions is set to grow following the Paris
Agreement of December 2015. The unprecedented pace at which the
agreement has been ratified and come into force, just 11 months later
Nationally Determined Contributions are country-driven targets
in November 2016, sends a clear signal of the low carbon trajectory for
that were invited for submission by the United Nations Framework
future growth and opportunities.
Convention on Climate Change, without strict instructions on the
format. NDCs have become part of Article 4 of the Paris Agreement
"The Paris Agreement is a historic turning point, as it sends a decisive
since it entered into force. For a list of all nationally determined
market signal that the transition to a thriving clean economy is inevitable,
contributions, see:
irreversible, and irresistible." —We Mean Business Coalition
http://unfccc.int/focus/indc_portal/items/8766.php
For the first time, 195 nations have agreed to keep a global temperature
rise below 2 degrees Celsius (°C) and to drive efforts to limit the
temperature increase to 1.5°C above pre-industrial levels. One of the
most noteworthy aspects of the Paris Agreement is that it includes 189
voluntary country-level commitments – called nationally determined
Climate-Smart Investment Opportunity after the Paris Agreement 3

B OX
Growing climate risks

Despite the large number of NDCs that have been put forward, the
global average temperature rise resulting from their implementation
is still expected to reach 2.7°C,14 falling short of the goal to maintain
warming at or below 2°C.15 If we fail to address climate change and
global temperatures rise by 4°C by 2100 – the direction we are heading
in now – frequent and intense droughts, flooding, and storms will affect
small businesses and large companies alike.16 This could cost the global
economy $150 billion each year.17 We are already seeing the physical
and financial effects of climate change. Reinsurer Lloyd’s reports that
damage and weather-related losses around the world have increased
from an annual average of $50 billion in the 1980s to close to $200
billion in the past 10 years.18
If we keep the average temperature rise below 2°C, three-quarters

of proven coal, oil, and gas reserves must remain in the ground.19
Increasingly, asset managers, investors, and regulators are concerned
that these assets could be “stranded”, losing value as countries start
implementing the Paris Agreement. Blackrock Investment Institute
recently released a report20 asking all investors to incorporate climate
change risks and opportunities into their investment processes. The
Financial Stability Board’s Task Force on Climate-Related Financial
Disclosures will issue a report in late 2016 that aims to increase
transparency about how companies are managing their exposure to
climate risk.21 This will further raise awareness of climate risks and
opportunities among corporate leaders, and hence accelerate action.

contributions or NDCs – to reduce greenhouse-gas emissions in the B OX
coming decades. These collective commitments set the global path
forward for climate-smart investment.
The Paris Agreement is designed to gradually ratchet up ambition in

the future through a five-year revision cycle to meet the long-term
temperature stabilization goal (see box on Growing climate risks).
National plans will start becoming more ambitious in the next four
years as the first “stocktaking” review takes place in 2018, with new and
updated pledges from countries due in 2020.
Private sector taking
The private sector played an important role in urging governments to
reach an agreement in Paris. The World Economic Forum’s CEO Climate
climate action
Leadership effort includes CEOs from 79 companies and 20 economic
sectors with operations in more than 150 countries and territories that
Business leaders are taking heed of the strong signal sent by the Paris
generated more than $2.1 trillion of revenue in 2014. These CEOs
Agreement. More than 1,000 companies have made commitments to
demanded bold government action to reach an agreement in Paris.22
tackle climate change as part of the We Mean Business Coalition’s
More than 600 global businesses and investors made voluntary pledges
campaign.
to reduce environmental and carbon footprints, setting targets to reduce
greenhouse-gas emissions and/or energy consumption and collaborating The most progressive companies – those that realize the growth
at a supply chain and sectoral level (see box to the right). opportunity that tackling climate change presents – are setting
science-based emissions-reduction targets. As of September 2016,
179 companies across all sectors have committed to set an emissions-
These trends represent a growing climate
reduction target that supports the global effort to limit warming
investment opportunity in emerging markets. to below 2°C. Setting a science-based target sends a clear message
Nearly all projected greenhouse-gas emissions growth is expected to to investors and consumers that a company is forward-thinking,
come from developing countries, due to their rapidly growing and innovative, and prepared for the transition to a low-carbon economy.
industrializing economies. 23
There is also significant momentum driving the commitment to source
100 percent renewable power, with 81 companies now working
"Investing in sustainable infrastructure is the growth story of the future." to create demand for more than 100 terawatt-hours of renewable
—Global Commission on the Economy and Climate electricity. Apple, which already uses 93 percent renewable electricity,
has committed to work with its manufacturing partners to install more
Developing countries also account for about two-thirds of global than 4 GW of new clean energy worldwide by 2020; General Motors
infrastructure investment, offering a $4 trillion investment opportunity has set a goal to use 100 percent renewable electricity by 2050; and
per year.24 The Global Commission on the Economy and Climate Bank of America aims to be carbon neutral and source 100 percent
has found that it does not need to cost more to ensure that this new renewable electricity by 2020.
infrastructure is compatible with climate goals, and that additional
upfront costs can be offset by efficiency gains and fuel savings. Some www.wemeanbusinesscoalition.org

BOX climate-smart solutions require higher upfront financing, with the
savings and other benefits accruing later. To deliver these solutions
at scale, financing and investment will be needed from governments,
multilateral and other development banks, private companies, and
institutional investors.25
How countries across the globe – especially growing middle-income

nations – respond to these infrastructure needs will play a major role
in whether we can avoid lock-in of fossil-intensive assets and achieve
the promise of the Paris Agreement. It will be critical to deliver on the
NDCs in the short term, to give countries and business confidence that
they can continue to increase their targets and avoid the significant
effects of climate change. The first step is to assess the potential for
private sector investment contained in countries’ NDCs.
Private sector highlights from NDCs

A total of 189 countries, representing 96 percent of global greenhouse-
gas emissions and 98 percent of the world’s population,26 have
The World Bank

submitted NDCs.27 NDCs aim to provide a clear, ambitious goal that
leads to transformation in carbon-intensive sectors, as well as a process
to track progress to ensure that countries are meeting their goals. Many
NDC platform countries followed a transparent NDC development process to build

trust and accountability with stakeholders, including the private sector.
The private sector was involved directly in preparing 43 NDCs.
According to the World Bank’s NDC platform (see box to the left), as
This new platform is a useful, easy-to-use, interactive tool that aims to
of the date of this report, 162 NDCs have been submitted (note: the
inform a wide range of development initiatives and engagements about
European Union submitted one NDC on behalf of 28 countries, bringing
countries’ economy-wide and sectoral commitments, how they translate
the total number of countries submitting NDCs to 189). A total of 132
into implementation, and support needs. The website presents data
countries prioritized making their agricultural sector more resilient and
in a uniform structure, which enhances the transparency of available
less carbon intensive. This includes 61 countries specifically targeting
information and helps to identify information gaps and opportunities
climate-smart agriculture investment. Other countries will focus on
to support NDC implementation. It also helps to foster mutual learning
improved, more resilient crops, more efficient irrigation, improved
among countries. All data collected in this database comes strictly from
animal and fisheries management, and enhanced fertilizers, among
the NDCs; all implementation cost estimates are self-reported in these
other things. The NDCs will drive more climate-smart investments. For
statements.
example, IFC’s $50 million Biosev project in Brazil provided financing
to one of the largest renewable biomass electricity producers in the
indc.worldbank.org
world, aiming to increase the volume of crushed sugarcane for sugar,

BOX
IFC: Ramping up
climate investments
IFC has been working for over a decade to identify Other international financial institutions are seeing • Catalyze $13 billion in private sector capital annually
and advance private sector finance for climate-smart similar success in catalyzing private finance for by 2020 to climate sectors through mobilization,
investments. Since fiscal year 2005, IFC has led a climate investment. The 2015 Joint Report on aggregation, and de-risking products.
cumulative total of more than $25 billion in long-
28
Multilateral Development Banks’ Climate Finance 30
• Maximize impact through GHG emissions reduction
term climate financing for renewable power, energy reported that MDBs committed US$6.9 billion of
and resilience; and
efficiency, sustainable agriculture, green buildings and climate finance to the private sector, evidence of the
private sector adaptation projects. This includes $15.3 growing demand for climate finance from emerging • Account for climate risk – both the physical risk of
billion in own account financing and $10.1 billion in market private sector clients. climate impacts and the carbon asset risk in IFC’s
core mobilization (syndicated loans, and public-private investment selection.
But this is not enough – there is much more that must
partnerships, for example). During fiscal year 2016, To reach these goals – and our collective global goals
be done to scale up private finance for climate change
IFC’s climate-related long-term investments from own to scale up climate investment – IFC will continue its
solutions. IFC’s 2016 Climate Implementation Plan31 was
account were nearly $2 billion, including 73 projects existing business and create new climate markets, create
approved in spring 2016 with four objectives to increase
across the globe. IFC further mobilized $1.28 billion new investment vehicles and increase internal tools and
climate investments and maximize impact:
from institutional investors and other actors. In FY16, support. IFC also seeks to increase partnerships with
IFC Advisory Services enabled more than $1.2 billion in • Scale climate-related investments to reach 28 percent
other international financial institutions, governments
climate-related investments in power, resource efficiency, of IFC’s annual new commitments by 2020;
and other stakeholders.
green buildings, and public-private partnerships.29

$10.2 billion), South Africa (up 329 percent to $4.5 billion), Mexico
NUMBER OF NDCS BY REGION, HIGHLIGHTING KEY (up 105 percent to $4 billion), and Chile (up 151 percent to $3.4
S E C T O R S M O S T R E L E VA N T T O P R I VAT E S E C T O R
INVESTMENT billion). Morocco, Turkey, and Uruguay all joined the list of countries
investing more than $1 billion in clean energy.33 Clean energy financing
gy
cy
originating from developing countries in 2012 exceeded the amount
er
en
en
ci
le
re
effi
s
t
coming from developed countries. About 74 percent of total climate
ab
tu
s
rie
or
y
g
tr
ew
ul
in
sp
te
st
er
an
rg
s
ric
ild
re
du
an
as
at
n
rb
Ag
Bu
Re
En
Fo
W
finance flows, and up to 92 percent of private investments, was raised
Tr
In
U
All 130 126 120 107 107 101 101 70 66 51 and spent within the same country, highlighting the importance of using
targeted policies to attract private investment.34
EAP 24 18 19 19 18 15 13 7 7 9
A total of 138 countries prioritized various types of renewable energy
in their NDCs, with 91 targeting solar power, 64 wind energy, 23
ECA 10 13 12 10 9 12 5 12 8 3
geothermal power, and 62 hydropower. Several countries included
capacity targets, leading to a total solar market potential from NDCs
LAC 26 27 27 19 24 19 23 15 13 7
of more than 232 GW (China and India each targeted 100 GW) and
MENA 17 14 12 17 14 14 15 12 14 3 a wind power market size of 280 GW (China targeted 200 GW and
India 60 GW). Due to the NDCs, investment opportunities are expected
SA 7 7 7 6 7 5 5 3 5 5 to accelerate in places like Panama, where IFC is part of a consortium
building the Penonome wind farm, a 215-megawatt (MW) plant that
SSA 46 47 43 36 35 36 40 21 19 24 will be Central America’s biggest. The government will build on this
project by providing more policy support: by 2050, Panama plans
Note: EAP = East Asia Pacific; ECA = Europe and Central Asia; LAC = Latin America Carribean; to increase its renewable energy capacity by 30 percent compared to
MENA = Middle East and North Africa; SA = South Asia; SSA = Sub-Saharan Africa. This table 2014 levels. To reach this target, wind and solar capacity would need to
accounts only for World Bank Group client countries. As a result, numbers in the table may differ from
numbers throughout chapter 1, which take into consideration NDCs from all countries. increase by over 400 percent and 1000 percent respectively, each with a
capacity of 4GW.35
In Morocco, IFC and private partners are playing a key role in the
ethanol and co-generation.32 This project was driven in part by Brazil’s
construction of a 510 MW solar plant that will provide power to 1.1
efforts to advance climate-smart agriculture and will become even
million people. With the help of NDC implementation, the project,
more attractive as Brazil implements its NDC. Sustainable forest and
worth $2.6 billion, could help turn the North African kingdom into a
land management—covering a wide range of business activities such as
renewable energy powerhouse and serve as a model for future public-
construction materials, paper and specialty chemicals to watershed and
private partnerships. In Nepal, IFC has invested in the 37.6 MW
soil conservation—is included in 88 NDCs.
Kabeli plant, the first project-financed hydropower facility in the
The global clean energy marketplace is rapidly shifting south and country. The project will generate about 200 gigawatt-hours (GWh)
east – 2015 was the first year that renewable energy investments in of electricity, helping address power shortages and driving industrial
emerging economies ($156 billion, up 19 percent from 2014) surpassed progress. This investment is part of Nepal’s wider ambition to scale-up
those in developed countries ($130 billion, down 8 percent from renewable energy by 2030 to meet increasing demand. Estimates by
2014). China now accounts for 36 percent of the global total. Other Nepal’s Ministry of Water Resources show over 40 GW of economically
countries showing increased investment include India (up 22 percent to attractive hydropower potential.36

A total of 110 countries listed different energy-efficiency investments Through their NDCs, 53 countries aim to grow low-carbon, resilient
in their NDCs. Focus areas included energy supply efficiency solutions cities (see box on page 40) by targeting improved solid waste
like cogeneration; efficient appliances; buildings (74 countries); and management, efficient street lighting, and sustainable urban planning,
efficient industrial processes such as cement, iron and steel, chemicals, among other investments. A total of 111 countries focused on transport,
and pulp and paper. One example of an energy-efficiency investment targeting public transport (39), bus rapid transit (6), rail (26), and clean
project is IFC’s China Utility Energy Efficiency (CHUEE) program, vehicle fleets (40). An example of the type of private sector investment
which provides Chinese banks with a risk-sharing facility and advisory included in these NDCs is a light-rail network project in Izmir, Turkey.
services to help them implement climate-smart energy projects. The IFC provided a $25 million loan and mobilized another $60 million
program started in 2006 with two Chinese banks and has grown to through the Multilateral Investment Guarantee Agency’s involvement
incorporate six partner banks with $300 million in financing.37 It has as the guarantor of a parallel loan provided by ING Bank. This project,
directly promoted sustainable energy investments through local banks as part of a suite of investments, will support Izmir Metropolitan
worth about 11 billion Chinese yuan, or nearly $2 billion. CHUEE Municipality’s work to increase metro ridership through the acquisition
has been successful due, in part, to China’s Action Plan for Addressing of 85 light-rail transit vehicles. The success of this project started with
Climate Change (2012-2020) in Industry. Since 2012, China has issued the issuance of Turkey’s four strategic priorities for transport, which
over 60 energy savings standards targeting energy intensive industries; included plans to create a rail freight corridor, strategic reorientation of
created an evaluation system to track energy savings; and invested the primary national railway transport corporation to improve services,
close to $800 million across more than 2,000 projects. Under this
38
and integrating national and regional networks.40 In large urban areas,
plan, efficiency improvements are required for close to 15,000 energy the government will continue to expand rail systems across the main
intensive industrial enterprises covering two thirds of China’s total transit corridors with the objective to offer high-capacity railway systems
energy consumption.39 for areas with a city population of greater than 1 million inhabitants.41

BOX
Estimating climate
investment potential
In order to predict climate-smart investment potential, it as needed (e.g., national transportation plans). IFC varies between technologies and countries, a variety of
is first necessary to define its scope. Efforts to date have used the World Bank’s NDC database (http://indc. sources were used to improve the accuracy of the final
focused on measuring and tracking past mitigation and worldbank.org) to help filter the sector priorities and results (see Annex 1). For example, in certain countries
adaptation investments , yet there is no comprehensive,
42
unconditional targets for each country of focus. IFC where renewables are still in their infancy, IFC used
bottom-up forecast for climate-smart investment. While then determined the climate-smart investment potential individual project-level data to project future investment
some sectors—notably renewable energy—have good for key sectors where consistent data was available potential. In other countries, however, IFC relied on IFC
investment forecasts,43 there are substantial data gaps (power, transport, buildings, waste and industry)44 by staff, publicly available data, or private subscription-
in areas such as climate-smart agriculture and forestry, assessing how the NDC targets would affect the market based references.
energy efficiency, transportation and waste. size over the time period of NDC implementation
IFC looks forward to engaging with our clients,
(2016-2030). Note that this estimate is for both public
This report quantifies the potential for low-carbon governments and data providers in the future to improve
and private investment—there are no agreed-upon
investment in 21 initial countries where IFC operates. the quality of climate-smart investment potential
metrics for dividing up the investment opportunity
IFC began its analysis by identifying the targets estimates. IFC hopes that this first report will catalyze
between public and private funding.
established by these countries in their Nationally new work to close these data gaps going forward.
Determined Contributions and, where available, Investment or capital costs ($/MW) were used to derive
supplemented these data with sector-specific policies the final investment potential figures. As this metric

SHADES OF GREEN: INVESTMENT POTENTIAL BY REGION AND SECTOR ($ BILLION)
n
n io
i o i ss
gy
ut m
s
cy er
le
rib ns
ab
en En
ro
al
ist Tra
m
ew
yd
t
ci ial
gs
or
l
s
er
ta
lH
as
& tric
Effi str
en
in
sp
te
th
o
d
om
ar
i ld
al
bt
lR
du
an
as
in
ec
eo
D
Sm
l
Bu
So
Su
W
W
Al
Tr
In
Bi
El
G
East Asia Pacific 231 537 48 34 16 866 392 143 13,235 1,357 53 16,046 >1000
Latin America and

Caribbean
118 44 45 11 14 232 0 21 901 1,460 26 2,640 >500<1000
South Asia 111 211 16 0 0 338 0 85 1,543 255 13 2,234 >250<500
Europe and
Central Asia
51 39 6 7 6 109 0 57 410 78 11 665 >100<250
Sub-Saharan
Africa
27 63 3 3 27 123 0 0 153 499 8 783 >50<100
Middle East and

North Africa
50 46 0 1 0 97 21 1 92 50 4 265 >25<50
Total Climate-
Smart Investment
Potential by Sector
588 940 118 56 63 1,765 413 307 16,334 3,699 115 22,633 <25
($ billion)
IFC estimates that there is a $23 trillion investment potential for a summary of the approach and Annex I for a
private climate investment opportunity in detailed description of the methodology.
the 21 countries studied for this report.

IFC assessed the national climate change commitments and other The report
policies in 21 countries that represent 48 percent of global greenhouse- The following chapters take a closer look at six individual regions,
gas (GHG) emissions, and finds an initial investment opportunity of focusing on an initial set of countries in each region, to explore
$23 trillion from 2016 to 2030 in key sectors (see chart above). A investment potential in targeted sectors. Global themes of interest to
significant portion of this estimate is for green buildings and this is likely the private sector are also featured throughout the report. The report
an underestimate—there are large data gaps for important sectors like concludes with a discussion on priority policy actions, public finance
climate-smart agriculture and transportation. Going forward, significant strategies and the next steps that are needed to unlock this potential for
effort is needed to close these data gaps and IFC looks forward to private investment – and to deliver on the promise of the NDCs and the
partnering with relevant stakeholders to address the information needs Paris Agreement.
for climate-smart investment potential. See box on Estimating climate

Endnotes
1 Note that all investment figures cited in this report are presented in US dollars. 24 Global Commission on the Economy and Climate (2016), The Sustainable Infrastructure Imperative: Financing
2 Morgan Stanley Institute for Sustainable Investing (2015), Sustainable Reality: Understanding the Performance of for Better Growth and Development, access at http://newclimateeconomy.report/2016/wp-content/uploads/
Sustainable Investment Strategies, access at http://www.morganstanley.com/sustainableinvesting/pdf/sustainable- sites/4/2014/08/NCE_2016Report.pdf.
reality.pdf 25 Ibid
3 BNEF (2016), Clean Energy Investment Factpack, Q3 2016, access at https://www.bnef.com/core/clean-energy- 26 As of September 1, 2016. 189 countries submitted 162 NDCs, with the European Union submitting on behalf of its 28
investment member states.
4 United Nations Environment Programme (UNEP) (2016), Global Trends in Renewable Energy Investment, access at 27 As of August 1, 2016. The share of global greenhouse-gas emissions is based on the 2012 greenhouse-gas emissions
http://fs-unep-centre.org/sites/default/files/publications/globaltrendsinrenewableenergyinvestment2016lowres_0. in the Emissions Database for Global Atmospheric Research database, including international transport emissions.
pdf Access http://edgar.jrc.ec.europa.eu/ for more information.
5 International Energy Agency (IEA) (2015), Energy Efficiency Market Report 2015, access at www.iea.org 28 European Union; Republic of Turkey (2013), Strengthening Combined Transport in Turkey: Executive Report, access
6 IEA (2014), Energy Efficiency Market Report 2014, access at www.iea.org at http://www.kugm.gov.tr/BLSM_WIYS/TMKDG/tr/Mevzuat/Taslaklar/20140606_144029_64574_1_64896.pdf.
7 IEA (2014), Capturing the Multiple Benefits of Energy Efficiency, access at www.iea.org 29 Organisation for Economic Cooperation and Development (OECD) (2010), Workshop Proceedings: Transcontinental
Infrastructure Needs to 2030/2050, Turkey/Bosphorus Gateway Case Study, access at http://www.oecd.org/futures/
8 IEA (2015), Energy Efficiency Market Report 2015: Market Trends and Medium Term Prospects. Access at: www.iea.
infrastructureto2030/48641811.pdf.
org
30 Total accumulated includes 15.27 USD billion own account and 10.1 USD billion directly mobilized by IFC.
9 See http://www.prnewswire.com/news-releases/study-finds-global-green-building-is-expected-to-double-
by-2018-300220580.html. 31 IFC (2016), Annual Report, access at http://www.ifc.org/wps/wcm/connect/CORP_EXT_Content/IFC_External_
Corporate_Site/Annual+Report.
10 Global Alliance for Climate-Smart Agriculture (2015), Action Plan, access at http://www.un.org/climatechange/
summit/wp-content/uploads/sites/2/2014/09/AGRICULTURE-Action-Plan.pdf. 32 For more information on this project, see http://ifcextapps.ifc.org/ifcext/spiwebsite1.
nsf/651aeb16abd09c1f8525797d006976ba/bd602ee480e512ed85257db200020ecd?opendocument.
11 AlphaBeta (commissioned by the Business and Sustainable Development Commission) (2016), Valuing the SDG Prize
in Food and Agriculture: Unlocking Business Opportunities to Accelerate Sustainable and Inclusive Growth, access 33 Climate Policy Initiative (2015), Global Landscape of Climate Finance, access at http://climatepolicyinitiative.org/
at http://s3.amazonaws.com/aws-bsdc/Valuing-SDG-Food-Ag-Prize-Paper.pdf. publication/global-landscape-of-climate-finance-2015/.
12 Ibid 34 Ibid
13 Climate Bonds Initiative (2015), “2015 Green Bond Market Roundup,” access at http://www.climatebonds.net/files/ 35 Government of Panama (2016), National Energy Plan “The future that we want” 2015-2050, access at http://www.
files/2015%20GB%20Market%20Roundup%2003A.pdf. energia.gob.pa/tmp/file/277/plan%20energetico%20nacional%20-edicion%20ira%20-julio%202016.pdf.
14 Climate Action Tracker (December 2015), Climate Pledges Will Bring 2.7 °C of Warming, Potential for More Action, 36 United Nations Industrial Development Organization (UNIDO) (2013), World small hydropower development report
see http://www.climateactiontracker.org; IEA (November 2015), World Energy Outlook Special Briefing for COP21. 2013: Nepal, access at http://www.smallhydroworld.org/fileadmin/user_upload/pdf/Asia_Southern/WSHPDR_2013_
Nepal.pdf.
15 The aggregate impact of these NDCs will be continued growth of emissions, from the 2014 level of 53 GtCO2e to 56
GtCO2e in 2030. Compared to emissions levels under a least-cost trajectory for 2°C, the emissions level from the 37 For more information, see https://www.ifc.org/wps/wcm/connect/28ad273b-d2d5-43f4-a953-
implementation of NDCs is 15 GtCO2e higher in 2030. This emissions level is projected following the implementation ca265d35e607/5StoriesOfImpact-ChinaClimateFinanceAdvisoryProgram.pdf?MOD=AJPERES.
of unconditional and conditional pledges. Source: United Nations Framework Convention on Climate Change 38 Government of China; National Development and Reform Commission (2013), China’s Policies and Actions for
(UNFCCC) (2016), Synthesis Report on the Aggregate Effect of the Intended Nationally Determined Contributions: Addressing Climate Change, access at http://en.ndrc.gov.cn/newsrelease/201311/P020131108611533042884.pdf.
An Update. 39 Industrial Energy Efficiency Policy Database. CN-3b: Top-10,000 Energy Consuming Enterprises Program Accessed
16 World Bank Group (2014), Turn Down the Heat, access at http://www.worldbank.org/content/dam/Worldbank/ October 13, 2016 at http://iepd.iipnetwork.org/policy/top-10000-energy-consuming-enterprises-program.
document/Full_Report_Vol_2_Turn_Down_The_Heat_%20Climate_Extremes_Regional_Impacts_Case_for_ 40 Access at http://pubdocs.worldbank.org/en/740431470757468260/MDB-joint-report-climate-finance-2015.pdf
Resilience_Print%20version_FINAL.pdf.
41 Access at https://www.ifc.org/wps/wcm/connect/5f5402804c60b510b6bbbeaccf53f33d/IFC_Climate_
17 White House (2014), The Cost of Delaying Action to Stem Climate Change, access at https://www.whitehouse.gov/ Implementation_Plan_03152016_WBG_v2.pdf?MOD=AJPERES.
sites/default/files/docs/the_cost_of_delaying_action_to_stem_climate_change.pdf.
42 See, e.g., Climate Policy Initiative (2015), Global Landscape of Climate Finance, access at http://climatepolicyinitiative.
18 The overall damage figures are likely to be much higher, because there is uneven insurance access and coverage org/publication/global-landscape-of-climate-finance-2015/.
across the world. See https://www.theguardian.com/business/2014/may/08/lloyds-insurer-account-climate-
change-extreme-weather-losses. 43 See, e.g., Bloomberg New Energy Finance (BNEF), New Energy Outlook 2016, access at https://www.bloomberg.
com/company/new-energy-outlook/; and International Energy Agency (2015), World Energy Outlook and Energy
19 The Carbon Tracker Initiative (2014), Unburnable Carbon: Are the World’s Financial Markets Carrying a Carbon Technology Perspectives, access at www.iea.org.
Bubble?, access at http://www.carbontracker.org/wp-content/uploads/2014/09/Unburnable-Carbon-Full-rev2-1.
pdf. 44 While climate-smart agriculture is a promising investment opportunity, data sources and existing literature to help
produce investment potential figures are in short supply. Therefore, climate-smart agriculture investment potential
20 Blackrock Investment Institute (2016), Adapting Portfolios to Climate Change: Implications and Strategies for All is not quantified in this report. For energy efficiency, this report only includes industrial energy efficiency in select
Investors, access at https://www.blackrock.com/investing/literature/whitepaper/bii-climate-change-2016-us.pdf countries where data was available. Residential and commercial energy efficiency potentialss were also not included
21 For more information, see https://www.fsb-tcfd.org/. – but our figures for green buildings will cover some of these data, especially for the residential sector.
22 See https://www.weforum.org/agenda/2015/11/open-letter-from-ceos-to-world-leaders-urging-climate-action/.
23 PBL Netherlands Environmental Assessment Agency (2015), “Trends in Global CO2 Emissions: 2015 Report, access at
http://edgar.jrc.ec.europa.eu/news_docs/jrc-2015-trends-in-global-co2-emissions-2015-report-98184.pdf.

East Asia Pacific Climate-
Smart Investment Potential
Investment Spotlights
13
O V E RV I E W The Asia-Pacific region hosts more than half of the global population
and is home to some of the world’s most climate-exposed territories. The
unprecedented pace and scale of economic development is transforming
the natural environment and contributing to climate change— the share
of coal in power generation is expected to rise from 32 percent to 50
East Asia Pacific percent to help meet energy needs in ASEAN countries1.2 The region
has been disproportionately hit by the effects of climate change, with
Climate-Smart
45 percent of the world’s natural disasters occurring here in the past
three decades.3 As a result, the region’s economies must grow, while
reducing greenhouse-gas intensity and addressing climate resilience.
Investment Potential Several economies in the region are making significant progress in
advancing green growth and low-carbon innovation, which is attracting
large private investment.
The region’s projected population growth and infrastructure needs
create significant opportunities for generating renewable energy,
improving green buildings, and building sustainable cities.

2016 - 2030 ($ billion) Investment potential
$14,903 Based on IFC’s analysis of the climate pledges made by the region’s four
$1,200 $15,000
$115 $1,143
countries studied for this report – China, Indonesia, the Philippines,
$274 and Vietnam – the total estimated climate-smart investment potential
$1,000 $12,500
is more than $16 trillion by 2030. Nearly 81 percent of this potential
is construction of new green buildings in China ($12.9 trillion)—this is
$800 $753 $10,000
the result of China’s aim to move 250 million people into cities by 2025
and is reflected in their NDC.4 Beyond China’s green buildings sector, the
$600 $7,500
opportunity to develop the region’s urban areas is immense and is largely
composed of three primary sectors: Buildings, Transport and Waste. The
$400 $5,000 commercial investment potential in climate-smart urban transport for
the four countries is almost $1.4 trillion, and for the municipal solid
$200 $2,500 waste sector the opportunity is over $53 billion. Construction of new
green buildings is a $345 billion opportunity in Indonesia, Philippines
$0 $0 and Vietnam. Opportunities for investment in climate-smart agriculture,
VIETNAM INDONESIA PHILIPPINES TOTAL CHINA forestry, and land-use projects across the region are also important; but
Buildings Industrial EE Electric T&D Renewables Transport Waste the current lack of data availability for these sectors hindered IFC's
ability to produce investment estimates of sufficient quality.

Climate Investment
Spotlights
I N D O N E S I A—H Y D R O P O W E R
IFC provided a $280 million loan to Indonesian independent
power producer PT Bajradaya Sentranusa. The deal will
support the long-term operation of Asahan 1, a hydroelectric
power plant in North Sumatra province, to provide low-
cost, renewable, and reliable power. More than a quarter
of Indonesia’s population is not connected to the national
grid, leaving about 66 million people without access to
electricity. About 60 percent of Indonesia’s electricity supply
in 2012 came from coal and oil, both of which produce high
greenhouse-gas emissions.
Sustainable cities
The region’s rapidly growing urban centers will define its energy future
and the world’s carbon footprint. Increasing standards of living and
rapid urbanization offer major opportunities for climate-smart investors.
Specific private sector investment opportunities exist in enhanced
public transportation, green buildings, clean vehicles, and distributed
generation. To unlock this investment, city governments need to work
on reforming institutions, building capacity, and strengthening energy
planning and governance.5 If cities take this proactive approach, they
have an opportunity to serve as global engines of green growth by V I E T N A M— G R E E N B U I L D I N G S
choosing energy-efficient solutions to suit their infrastructure needs. In 2015, Vietnam became the first market in East Asia to
introduce IFC’s EDGE Green Buildings program. Over the next
six years, IFC’s partner SGS Vietnam expects to award EDGE
Adaptation and resilience certifications to 20 percent of new construction projects in
the country, equivalent to about 70,000 housing units. This
The region is increasingly feeling the effects of climate change, including will help cut 19,000 metric tons of greenhouse-gas emissions
per year, avoid 43,500 megawatt-hours of energy use, and
drought in Indonesia, which contributed to the country’s costly fires and save $8 million per year by 2021. IFC is now working with the
haze of 2015. Extreme rainfall has caused damaging floods in China in government to green building codes in the future.
2016 and increased the frequency and intensity of tropical cyclones in
East Asia Pacific Climate-Smart Investment Potential 15

Climate Investment
Spotlight
Photo: © IFC
S O U T H PA C I F I C— D I S T R I B U T E D S O L A R F O R
I S L A N D N AT I O N S
In May 2014, IFC invested $2 million in Sunergise International
Limited, a company that supplies solar rooftop energy in
the Pacific. IFC’s investment will allow Sunergise to expand
solar installations in Fiji and across the region, including the
Solomon Islands and Papua New Guinea, where businesses
lack a stable and affordable power supply. The investment
supports an innovative business model that offers less
the Philippines, causing substantial damage to the economy. Adapting expensive, cleaner power to customers with no up-front
investment required.
to the effects of climate change will help reduce future economic losses
in the region. Southeast Asian countries should work with the private
sector to adapt agricultural practices to changes in temperature and
precipitation, design water management to manage greater risk of floods
and droughts, and ensure coastal zone management can withstand
higher sea levels, among other priorities.6
Renewable energy
China dominated the world’s investment activity in renewable energy
in 2015, exceeding the $100 billion threshold and accounting for about
two-thirds of all developing-country investment.7 Solar power attracted
more than half of China’s investment, widening the lead that it had
established against wind energy in the previous year.8 Vietnam, the
Philippines, and Indonesia together accounted for about $2.3 billion
in investments.9 Two of the region’s key challenges are secure and
affordable energy access and fossil-fuel subsidy reform. Energy policy
varies considerably across the region, reflecting differences in political
direction, economic development, and natural resources.10

Spotlight countries – Priority sectors for
climate investment
CHINA
China’s estimated climate-smart business investment potential is

$15 trillion by 2030. This includes $773 billion in new renewable
energy, $12.9 trillion for low-carbon buildings and more than
$725 billion for transport.
INDONESIA
Indonesia’s estimated climate-smart business investment potential is

over $274 billion. In the sectors considered, investment in renewable
energy accounts for almost $23 billion by 2030, with under half of this
($9 billion) for biomass and the other half for geothermal energy ($10
billion) and small hydropower ($3 billion). Investments in transport
are estimated at nearly $20 billion for low-carbon, resilient ports, rail,
roads, and other critical infrastructure by 2030, while construction of
new green buildings will require almost $209 billion.
THE PHILIPPINES
The Philippines’s climate-smart business investment potential is nearly

$115 billion by 2030. This includes investment in renewable energy of
$11 billion, while new green buildings, waste, and transport will see
investment of $57 billion, $2 billion and $41 billion, respectively. This
total reflects only a small portion of the 5.4 GW national hydropower
target that is designated for small hydro. The investment opportunity
associated with the remaining large hydro focus of the target is up to
$22.7 billion by 2030.11
VIETNAM
Vietnam’s climate-smart business investment potential is an estimated

$753 billion, with the majority ($571 billion) going towards the country’s
transportation infrastructure needs by 2030. Potential investment in
renewable energy totals $59 billion, with over half of this ($31 billion)
in solar PV and another $19 billion for small hydropower projects. New
green buildings represent an almost $80 billion investment opportunity.
BOX
Venture capital for clean

transport technologies
China sold 200,000 electric vehicles in 2015, accounting Central and Western China, Microvast expanded its IFC’s investment has enabled Microvast to accelerate its
for 36 percent of global sales and making China the business to increase the number of electric city buses entry into the Chinese market, test its solutions in a live
largest market for electric vehicles that year. This trend
12
(e-buses) running on its innovative battery technology. market environment, and offer a strong demonstration
will continue to grow as the Chinese government actively The technology is based on lithium titanium oxide showcase for other prospective bus clients.16 Microvast
invests in transport technology and infrastructure to help chemistry, allowing the battery to last twice as long as has continued to develop its global business and, as of
domestic automakers put more than 20 million clean, lithium iron phosphate batteries. The new batteries can March 2016, the company has more than 10,000 electric
fuel-efficient, and other alternative energy vehicles on the be fully charged within five to 10 minutes. This offers
13
vehicles in six countries and 100 cities powered by its
road by 2020. Of these vehicles, 1 percent will be electric the opportunity for e-buses to quickly charge between battery technology.17 Recently, Microvast received the
buses, with a network of nearly 4,000 bus charging shifts without affecting operations. Microvast’s
14
Financial Times/IFC Transformational Business Award
stations. batteries are ideal for city e-buses because bus route for the use of its innovative battery technology in a
patterns have fixed destinations, short travel distances rapidly urbanizing country like China.
In 2011, IFC invested $25 million in Microvast, a
per loop, and an average of 15 to 30 minutes resting
technology company that develops and manufactures
time between each loop, allowing the batteries to fully
advanced batteries for the electric vehicle market. In
recharge.15

CHINA
China’s estimated climate-smart in new investment is needed by 2020 to keep Chinese
cities on a low-carbon path.19 Of this amount, between
investment potential in selected 85 percent and 90 percent is available for the private
sector.
sectors is $15 trillion from China is still rapidly urbanizing, with 60 percent of the
2016-2030. country’s population projected to live in cities by 2020.
Just 10 years later, in 2030, more than 1 billion people
China’s NDC pledges to lower the carbon intensity of are expected to live in Chinese cities – roughly one in
GDP by between 60 percent and 65 percent below 2005 eight people on Earth.20
levels, increase the share of low-carbon energy to total
The buildings sector consumes half of the total energy
energy supply to about 20 percent, and increase its forest
in Beijing. Opportunities for new green buildings and
stock volume by 4.5 billion cubic meters, by 2030.18
energy-efficient retrofits for millions of existing buildings
The country is entering the first year of its 13th Five-
are massive. China has also experienced explosive
Year Plan (FYP) in 2016 and is implementing significant
growth in car use and ownership. As a result, motorized
policies to address climate change, including restricting
transportation has become one of the country’s fastest
coal consumption. According to a new report, Green
growing major emission sources.
Finance for Low-Carbon Cities, more than $1 trillion
C H I N A I N D I C AT O R S ( 2 0 1 5 )
N E A R - T E R M C L I M AT E - S M A R T I N V E S T M E N T P O T E N T I A L B Y 2 0 2 0
Population: 1.37 billion
GDP: $10.9 trillion

 Renewable energy Urban infrastructure
GDP growth: 6.9%
China has the largest power-generation fleet in the world, Chinese cities contribute 70 percent of the country’s total energy- Inflation: 1.4%
installing 142 GW of new renewable energy in 2015, including related greenhouse-gas emissions, making urban areas a clear Ease of Doing Business rank: 84
33 GW of wind power and 18 GW of solar PV power.21 priority for climate-smart investment. IFC estimates $2 trillion will
S&P credit rating: AA-
Overcapacity of renewable energy is a serious issue for the be invested in new low-carbon buildings by 2020. China will need
FDI, net inflows: $249 billion
country at the moment, but based on China’s current renewable to accelerate the development of green modes of urban transport
GHG emissions rank: 1 (2012)
energy targets and anticipated economic growth IFC estimates and waste management with minimum investments of $218 billion
the country will invest at least $773 billion between 2016 and and $12 billion by 2020, respectively to reduce emissions and satisfy Renewable energy capacity: 79 GW
2030. By 2020, nearly $400 billion of this amount will be its growing urban population.. China plans to integrate low carbon
invested in solar, wind, small hydro, and biomass energy. development into the entire process of urban planning, emphasizing L O W C A R B O N TA R G E T S
improvements in fuel efficiency, increasing public transport use to 30
percent, and increasing the number of electric vehicles on the road. • Reduce carbon intensity by 60%–65%
Solar $178B for Solar PV and below 2005 levels by 2030.
$242B $64B for Solar CSP Buildings
$2T China’s climate- • Cap primary energy consumption at
Small smart investment 5,000 metric tons of coal equivalent
hydro potential in urban
China's climate- by 2020.
$5B infrastructure by
smart investment 2020 • Increase non-fossil fuel’s share of
potential in the $2.3T Transport
power sector by primary energy consumption to 15%
$218B by 2020.
2020
$396B Wind
• Connect 210 GW of wind, 150 GW of
$137B Waste
$12B PV, and 10 GW of solar thermal power
to grids by 2020.
Biomass
$12B
 Priorities for China to attract more I F C C L I M AT E B U S I N E S S
climate-smart investment (FY2010 – 2016)
EXPAND THE MARKET FOR ENERGY EFFICIENCY Total climate finance: $1.2 billion
 Industrial Energy Efficiency AND GREEN BUILDINGS
• Renewable energy: $326 million
China’s 13th FYP establishes a target to reduce energy intensity by Enhance the implementation of green building regulations and
standards by increasing their ease of use and expanding coverage to • Energy efficiency: $400 million
40 – 45 percent from 2005 levels by 2020 and 60 - 65 percent by
include retrofits. • Other mitigation: $504 million
2030. The investment opportunity to meet China’s 2020 target for
industrial energy efficiency improvements is estimated at over $35 Climate finance, selected NDC sector:
ALIGN GREEN FINANCE WITH THE NDC
Waste: $221 million; agribusiness &
billion by 2020. China has already made considerable progress Align China’s NDC priorities with its Green Bond Guidelines and forestry: $79 million
over the past five years, but ample opportunities to improve energy Guidelines for a Green Financial System to direct more private
efficiency in the country’s industrial sector exist. The private sector finance towards the implementation of national climate strategies.
already plays a large role in terms of investment in the sector and
will continue to do so by bringing on more market-based solutions A L L E V I AT E P O W E R G E N E R AT I O N O V E R C A PA C I T Y
from ESCOs to dedicated credit lines and risk guarantees.22 Significantly reduce coal-fired power plant use by providing
incentives to replace coal with gas or other cleaner fuels; provide
economic stimulus packages to ease the transition.
INDONESIA
Indonesia’s estimated climate- The country aims to generate 23 percent of its primary
energy consumption from renewable energy by 2025,
smart investment potential in up from its current levels of between 5 percent and
6 percent. There is also a 2019 interim target of 19
selected sectors is more than percent, which looks difficult to achieve given the
sector’s current levels of financing.24
$274 billion from 2016–2030.
Indonesia’s NDC does not elaborate as to which sectors
Indonesia’s NDC includes a greenhouse-gas emissions it intends to focus on in order to achieve its targets.
reduction target of 29 percent below business-as-usual The country’s biennial update report (BUR), however,
emissions. Indonesia is the fourth most populous country provides a list of mitigation actions for most sectors
in the world after China, India, and the United States. including budget estimates for each activity. Indonesia
With an expanding middle class, Indonesia’s economy also has several Nationally Appropriate Mitigation
has grown rapidly over the past 10 years. Action (NAMA) projects for which it requires private
Indonesia has ambitious infrastructure improvement sector financing to help implement.
plans, with a focus on expanding access to energy, The government has taken significant steps over the past
building roads, ports, railways, and airports, as well as few years to improve its policy framework for climate
improving agricultural production.23 Indonesia can be investments, passing 13 separate pieces of legislation
a challenging environment for businesses, but its stable from 2012 to 2015 in areas such as permitting, licensing,
economy makes it an attractive destination for investors purchasing policies, and feed-in-tariffs for renewable
looking to make climate-smart investments. sources of energy, along with support for green buildings.25
I N D O N E S I A I N D I C AT O R S
N E A R - T E R M C L I M AT E - S M A R T I N V E S T M E N T P O T E N T I A L B Y 2 0 2 0 (2015)
Population: 258 million

 Renewable energy Urban infrastructure GDP: $861.9 billion
Indonesia has large geothermal power potential; its biomass Indonesia’s population is expected to exceed 300 million by 2030, GDP growth: 4.8%
and hydro resources are also considerable.26 IFC estimates that with half of the country’s people living in urban areas. Provinces Inflation: 6.4%
solid biomass power projects will present nearly $3 billion in with more than 50 percent of their inhabitants living in urban Ease of Doing Business rank: 120
investment potential by 2020 and $1 billion will be needed areas are DKI Jakarta (100 percent), Riau (83 percent), Banten,
S&P credit rating: BB+
for small hydropower projects. The government aims to install Yogyakarta, and West Java (each more than 60 percent).28 The
FDI, net inflows: $15.5 billion
7.2 GW of geothermal energy by 2025, but the full amount is low-carbon buildings sector in Indonesia should grow as a result
considered unlikely to materialize by this date.27 Nonetheless, of new green building codes and energy efficiency incentives, GHG emissions rank: 9 (2012)
IFC estimates the commercial potential for geothermal power in representing a $23 billion investment opportunity by 2020, while Renewable energy capacity: 8.8 GW
Indonesia to be a minimum of $4 billion by 2020. the transport and waste sectors are expected to require $7 billion
in investment combined. The largest sales by transport mode L O W C A R B O N TA R G E T S
Geothermal
are in the motorcycle market with an anticipated 8.1 million
$4B Indonesia’s climate- expected sales by 2030. • Increase renewable energy share to
smart investment 23% by 2025.
potential in
renewables by 2020 Buildings • Decrease energy intensity by 1% per
$8B Small $23B Indonesia’s climate- year from 2014 to 2025.
hydropower smart investment
potential in urban • Encourage distributed renewable
$1B
infrastructure by energy to achieve 100% electrification
2020
Biomass by 2020.
$30B Transport
$3B $6B
I F C C L I M AT E B U S I N E S S
Waste
$1B (FY2010 – 2016)
Total climate finance: $162 million
 Priorities for Indonesia to attract more • Energy efficiency: $68 million
climate-smart investment • Other mitigation: $5 million
Climate finance, selected NDC sector:

CHAMPION RETROFITTING OF ALIGN LAND DEVELOPMENT CO M B I N E S U S TA I N A B L E F I N A N C E Agribusiness and forestry: $5 million
EXISTING BUILDINGS P O L I C I E S W I T H C L I M AT E G O A L S A N D C L I M AT E C H A N G E E F F O RT S
Green standards are being introduced Develop comprehensive land law, replacing Align efforts to implement Indonesia’s NDC
for new buildings being built in certain overlaps, contradictions and ambiguities in with the sustainable finance roadmap being
municipalities (e.g. Jakarta, Bandung), but existing laws, regulations and procedures, developed by OJK to unlock more green
further regulations are required including on ownership and acquisition to facilitate finance across the financial sector. Foster
mandatory guidelines on increasing priority infrastructure investment projects. increased coordinated market awareness
efficiency in existing buildings. through OJK-led training, supplemented
by regulations that enable increased green
portfolios among banks.
GLOBAL THEME
Achieving green growth

in emerging economies
The World Bank Group defines green growth as fuel investments, particularly new coal-based power Other countries have outlined green growth actions
“maximizing economic growth and development while generation to avoid long-term entrenchment of high through low-carbon development plans and/or their
decoupling upward trends in resource use, carbon carbon energy infrastructure. One key policy decision NDCs.
emissions and environmental degradation”. It focuses on governments must take is to phase out subsidy support
Depending on their circumstances and priorities,
the synergies and trade-offs between the environmental for fossil fuels. Many countries, including India,
countries can choose between different policy actions
and economic pillars of sustainable development. Indonesia and Mexico, have already started down this
and priority sectors to achieve green growth. China’s
path by implementing fossil fuel subsidy reforms in 2015
Green growth discards the old model of “grow first, 13th Five-Year Plan for 2016–2020 reflects a shift in its
and 2016, as oil prices bottomed-out.
clean up later”. It discourages investment decisions growth model to promote environmental sustainability.
that lock countries in to environmentally damaging, Such policies and green growth strategies produce It includes binding targets for key environmental
carbon-intensive systems. Instead it relies on a broad resilient growth models, more capable of withstanding parameters on air quality, water quality, and forest
mix of policy instruments, including environmental external shocks – whether related to climate, energy, cover. Key measures include strengthening enforcement
standards and policies to create new markets, encourage food, resources, or sudden demographic changes. authorities, building environmental administrative
technological innovation, and contribute to economy- However, there is no one-size-fits-all strategy for capacity, and boosting incentives for polluters to comply
wide efficiencies and sustainable growth. implementing green growth; rather, specific policies with environmental regulations and switch to cleaner
and actions need to respond to national priorities and technologies.30
Green growth requires actions to reduce pollution and
circumstances.
emissions through cleaner consumption and production China is also investing more in renewable energies
patterns, to manage natural capital (land, forests, Many low- and middle-income countries have than any other country in the world and has adopted
water, and so on) more sustainably and efficiently, and incorporated green growth into their national stringent energy efficiency standards, in particular in the
to reduce vulnerability to climate and disaster risks. development programs and action plans through specific industry and transport sectors.
It will require moving away from supporting fossil green growth (or green economy) strategies/ roadmaps. 29

Ethiopia’s strategy involves changes in crop and livestock strategies and policy frameworks will create even more
production and soil management, while protecting investment opportunities. The World Bank Group is
and restoring forests.31 In Latin America, which has a helping Colombia, India (Himachal Pradesh), Morocco,
large urban population, city development and greener Lao PDR, and Vietnam, develop and implement policy
transport systems are critical areas for achieving green frameworks to enable investments for a green growth
growth. Vietnam, with its large population and centers
32
transition in selected sectors. Investments in projects
of economic activity located in low-lying coastal areas related to pollution management, recycling and waste
and river basins, is focusing on increasing the resilience management, low-carbon energy production, energy
of its coastal zones, water resource management, and efficiency, renewable energy, green transport and urban
agricultural production. planning, water resource management, sustainable
forestry and fisheries, and nature-based tourism are also
Private sector engagement in many of these sectors is
directly contributing to these green growth plans.
already growing. Aligning NDCs with green growth

THE PHILIPPINES
The Philippines’ estimated Geothermal and hydropower each generated about 12
percent, while the markets for both wind and solar power
climate-smart investment do not currently play a major role in the island’s green
development. However, through the Philippines Energy
potential in selected sectors is Plan 2012–2030, the country plans to add 9.9 GW of
new renewable capacity by 2030, including 5.4 GW will
nearly $115 billion from be from hydropower (including large hydropower), 2.3
2016–2030. GW from wind power, and 1.5 GW from geothermal
energy.34
The Philippines’ NDC establishes a conditional
The Philippines is becoming an attractive investment
greenhouse-gas reduction target of 70 percent below
destination. The country’s growing middle class and
business-as-usual levels by 2030. Analysis has shown
stable political environment have helped the economy
that if the planned National Renewable Energy Program
grow over the past six years at an average of 6.2 percent.
and the Energy Efficiency and Conservation Roadmap
The government is eager to increase investments in
are fully implemented, the country would only be able to
several key sectors, including infrastructure, agriculture,
meet its NDC target halfway.33
manufacturing, green buildings and power generation.35
The Philippines’ main source of electricity in 2015
was coal (44 percent), followed by gas (25 percent).
P H I L I P P I N E S I N D I C AT O R S

 Renewable energy Urban infrastructure GDP: $292 billion
Along with Indonesia, the Philippines is the region’s geothermal As a result of the country’s archipelagic geography, cities in the GDP growth: 5.8%
heavyweight. The country has nearly 2 GW of installed Philippines have not been able to match the economic growth of Inflation: 1.4%
geothermal capacity. IFC estimates $5 billion in commercial its neighbors in the region. The National Dream Plan for Manila Ease of Doing Business rank: 97 (2015)
potential for geothermal investments by 2020. In addition, the and Surrounding Areas estimates the country’s investment needs
S&P credit rating: BBB
Philippines’s Energy Plan will drive investments of $1 billion for for transport infrastructure to be about $12 billion by 2020. In
new wind power and $1 billion for small hydropower. addition, the country’s Energy Plan projects a need to replace
7,000 public buses to run on compressed natural gas, and a GHG emissions rank: 48 (2012)
market penetration increase of hydrogen and fuel cell vehicles by Renewable energy capacity: 6.6 GW
Geothermal 2030. The investment opportunity for low-carbon buildings and

$5B The Philippines’ waste will be about $2 billion and $1 billion by 2020 respectively. L O W C A R B O N TA R G E T S
climate-smart
in renewables by • Increase renewable energy in primary
2020 Small energy mix to 50% by 2030, up from
$7B hydropower Buildings 34% in 2010.
$1B $2B
The Philippines’
climate-smart • Add net renewable energy capacity of
investment 1.5 GW by 2030.
Wind
potential in urban
$1B infrastructure by
2020
$15B Transport I F C C L I M AT E B U S I N E S S
$12B (FY2010 – 2016)
Waste
$1B Total climate finance: $313 million
• Energy efficiency: $63 million
 Priorities for the Philippines to attract

more climate-smart investment
E N S U R E A S U S TA I N A B L E A N D PROMOTE GREEN URBANIZA- E N H A N C E N AT I O N A L C L I M AT E

E Q U I TA B L E E N E R G Y M I X TION AND CONNECTIVITY RESILIENCE
Establish an effective regulatory/policy Enable investment in water/sanitation Develop hard climate resilient
framework and network infrastructure management, green buildings, smart grid/ infrastructure through e.g. retrofitting
to promote the use of renewable/clean distributed generation, energy efficient critical infrastructure such as reservoirs,
energy and achieve a sustainable & inter and intra-city mass-transportation, power transmission and distribution
equitable energy mix. and energy efficient vehicles through networks etc., and soft climate resilient
a coordinated and effective regulatory infrastructure including catastrophic
framework. insurance, risk pools etc., targeted in
particular towards SMEs and farmers.
VIETNAM
Vietnam’s climate-smart roads, railways, and water treatment. Vietnam needs
an estimated $170 billion in additional infrastructure
investment potential for development to meet growing economic demand.36
In energy alone, the Vietnam General Statistics Office
selected sectors is more than estimates that electricity demand will continue to grow
at a rate of between 10 percent and 12 percent per
$753 billion from 2016–2030. year.37
Vietnam’s NDC pledges to reduce greenhouse-gas In March 2016, the prime minister approved the revised
emissions by 8 percent from business-as-usual levels by Power Development Plan VII for 2016–2030, which
2030 and to reduce greenhouse-gas intensity per unit emphasizes renewable growth, fuel diversification, and
of GDP by 20 percent by 2030 from 2010 levels. The transmission reliability. Most importantly, it increases
country has nine categories of mitigation measures within the renewable generation target to 6.5 percent by 2020
its NDC (with multiple activities in each) and is already and 10.7 percent by 2030.38 It also adds technology-
working to produce an implementation plan for its NDC. specific targets for biomass and solar power, in addition
Vietnam’s geographic proximity to global supply to previously set wind power goals. At the same time,
chains, and its political and economic stability, make however, the plan calls for another 40 GW of new coal-
it an especially attractive investment destination for fired capacity to be built by 2030, along with several
infrastructure projects such as power generation, liquefied natural gas import facilities.39
V I E T N A M I N D I C AT O R S
Population: 91.7 million

Vietnam’s recently updated Power Development Plan will have Vietnam has East Asia’s sixth most populous urban population with GDP growth: 6.7%
a major effect on the country’s future deployment of renewable 23 million people. Between 2000 and 2010, its urban population Inflation: 0.6%
energy (currently just 5 percent of installed capacity). IFC increased at a rate of 4.1 percent per year – one of the highest rates Ease of Doing Business rank: 93
estimates that the country will present nearly $12.4 billion in in the region. The rapid growth in Hanoi and Ho Chi Minh City,
S&P credit rating: BB-
new renewable investment potential by 2020. The bulk of this for example, means that if they continue to grow at current rates
amount will be for small hydropower ($8 billion), followed both cities will be twice as large as they were in 2000.40 The need
by wind and solar PV power ($2 billion and $2 billion, for low-carbon transport infrastructure in Vietnam is significant, GHG emissions rank: 35 (2012)
respectively). at an estimated $171 billion through 2020, while the investment Renewable energy capacity: 16.7 GW
opportunity for low-carbon buildings and waste management in
Solar PV Vietnam is about $8 and $0.3 billion respectively by 2020. The L O W C A R B O N TA R G E T S
$2B national priorities for low-carbon transport focus on developing
sustainable public transport systems specifically rapid transit in • Add wind power of between 710 MW
Small
hydro large urban areas, and the design of new policies around fuel and 800 MW by 2020 and 6 GW by
Vietnam’s climate-
$8B quality, emissions standards and vehicle maintenance. 2030.
smart investment
potential in • Add solar PV power of 850 MW by
renewable energy
Buildings
2020 and 12 GW by 2030.
by 2020
$12.4B Wind $8B Vietnam’s climate- • Add biomass, biogas, or geothermal
$2B smart investment power of 1 GW by 2020 and 3.4 GW by
potential in urban
infrastructure by
2030.
Biomass 2020
$0.4B $179.3B Transport
$171B I F C C L I M AT E B U S I N E S S
(FY2010 – 2016)
Waste
$0.3B Total climate finance: $59 million

 Priorities for Vietnam to attract more
climate-smart investment
B U I L D U P C L I M AT E-S M A RT GREEN INDUSTRIAL SECTORS S U P P O RT G R E AT E R W I N D

CAPACITY IN BANKS POWER
Remove barriers to greater utilization
Provide clearer guidance and incentives to of renewable energy in sugar sector Revise the wind feed-in tariff to align with
enable financial intermediaries to play a through advanced regional biomass the effective tariffs that were introduced
greater role in supporting climate related energy planning and developing new for the biomass and waste-to-energy
investments. financing mechanisms and business sectors in 2014.
models to transform the grid-connected
biomass power industry.
Endnotes
1 IEA (2015), South East Asia Energy Outlook, access at https://www.iea.org/publications/freepublications/ 20 Ibid.
publication/weo2015_southeastasia.pdf 21 BNEF (2016), China Country Profile
2 United Nations Development Programme (2012) Asia-Pacific Human Development Report, access at http://www. 22 IEA (2016), Energy Efficiency Market Report 2016, access at http://www.irena.org/DocumentDownloads/
asia-pacific.undp.org/content/rbap/en/home/library/human_development/asia-pacific-hdr-2012/. Publications/_AsiaComplete.pdf. .
3 Ibid. 23 U.S. State Department (2016), “Investment Climate Statements, Indonesia”, access at http://www.state.gov/e/eb/rls/
4 See http://www.nytimes.com/2013/06/16/world/asia/chinas-great-uprooting-moving-250-million-into-cities. othr/ics/investmentclimatestatements/#wrapper
html?pagewanted=all&_r=0. 24 BNEF (2016), Indonesia Country Profile, Commentary Section
5 World Bank Group (2013), Energizing Green Cities in Southeast Asia, access at http://documents.worldbank.org/ 25 ASEAN Centre for Energy (2016), ASEAN Renewable Energy Policies, access at http://cloud.aseanenergy.org/s/
curated/en/890271468247821479/pdf/811110PUB0Gree0Box0379830B00PUBLIC0.pdf. uXZwymBnIozTjtK#pdfviewer
6 Asian Development Bank (2009), The Economics of Climate Change in Southeast Asia: A Regional Review, access 26 IRENA (2013), Renewable Energy Country Profiles: Asia, access at http://www.irena.org/DocumentDownloads/
at https://www.climatefinance-developmenteffectiveness.org/sites/default/files/documents/04_12_14/Session_1/ Publications/_AsiaComplete.pdf.
ADB_economics-climate-change-se-asia.pdf.
27 ASEAN Centre for Energy (2016), ASEAN Renewable Energy Policies, accessed at http://cloud.aseanenergy.org/s/
7 BNEF (2016), Global Trends in Renewable Energy Investment 2016. uXZwymBnIozTjtK#pdfviewer
8 BNEF, Clean Energy Investment data download tool, retrieved 10/3/2016. 28 Republic of Indonesia (2016), Biennial Update Report 2015, access at http://unfccc.int/resource/docs/natc/idnbur1.pdf
9 BNEF, Country Data Tool, retrieved 10/3/2016. 29 IEA (2015), World Energy Outlook, access at https://www.iea.org/Textbase/npsum/WEO2015SUM.pdf
10 IEA (2013), World Energy Outlook: Special Report on Southeast Asia, access at https://www.iea.org/publications/ 30 Green Growth Best Practice Initiative (2015), Green Growth in Practice. Lessons from Country Experiences, access at
freepublications/publication/world-energy-outlook-special-report-on-southeast-asia-2015.html. http://www.ggbp.org/sites/all/themes/ggbp/uploads/Green-Growth-in-Practice-062014-Full.pdf.
11 IRENA (2012), Renewable Energy Technologies: Cost Analysis Series - Hydropower, access at http://www.irena.org/ 31 World Bank and DRC (Development Research Center of the State Council, China) (2012). Seizing the Opportunity for
documentdownloads/publications/re_technologies_cost_analysis-hydropower.pdf Green Development in China. Supporting Report 3 for China 2030: Building a Modern Harmonious and Creative High
12 IEA (2016), Global EV Outlook 2016, access at https://www.iea.org/publications/freepublications/publication/ Income Society, access at http://elibrary.worldbank.org/doi/abs/10.1596/9780821395455_CH03.
Global_EV_Outlook_2016.pdf 32 Federal Democratic Republic of Ethiopia (2011). Ethiopia’s Climate-Resilient Green Economy Strategy, access
13 Charged: Electric Vehicles Magazine (2012), “Microvast designs batteries, builds buses, and partners with utilities”, at http://www.greengrowthknowledge.org/sites/default/files/downloads/resource/Ethiopia%E2%80%99s_
access at https://chargedevs.com/features/microvast-designs-batteries-builds-buses-and-partners-with-utilities. Climate%E2%80%90Resilient_Green_Economy_Ethiopia.pdf.
14 Microvast (2016) “Road Map”, access at http://www.microvast.com/index.php/solution/solution_rm. 33 World Bank (2013), Inclusive Green Growth in Latin America and the Caribbean, access at http://documents.
15 PR Wire (2015), “World’s Largest Ultra-Fast EV Charging Station Goes Live in Beijing, Fully Charging Commercial worldbank.org/curated/en/585171468242100860/Inclusive-green-growth-in-Latin-America-and-the-Caribbean.
Vehicles in 10 minutes”, access at http://www.prnewswire.com/news-releases/worlds-largest-ultra-fast-ev- 34 Climate Action Tracker (2015), Philippines, accessed at http://climateactiontracker.org/countries/philippines.html
charging-station-goes-live-in-beijing- fully-charging-commercial-vehicles-in-10-minutes-300188326.html. 35 BNEF (2016), Philippines Country Profile, Commentary Section
16 IFC News Article (2016), “Microvast”, access at http://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_ 36 U.S. State Department (2016), “Investment Climate Statements, Philippines”, accessed at http://www.state.gov/e/
external_corporate_site/news+and+events/news/microvast. eb/rls/othr/ics/investmentclimatestatements/#wrapper
17 Microvast (2016), “Proven Records”, access at http://www.microvast.com/index.php/solution/solution_pr. 37 U.S. State Department (2016), “Investment Climate Statements, Vietnam”, accessed at http://www.state.gov/e/eb/
18 People’s Republic of China (2015) “China’s Intended Nationally Determined Contributions”, accessed at http://www4. rls/othr/ics/investmentclimatestatements/#wrapper
unfccc.int/Submissions/INDC/Published%20Documents/China/1/China's%20INDC%20-%20on%2030%20June%20 38 GIZ (2016), Vietnam Power Development Plan for the period 2011 – 2020: Highlights of the PDP 7 revised, access at
2015.pdf http://gizenergy.org.vn/media/app/media/legal%20documents/GIZ_PDP%207%20rev_Mar%202016_Highlights_
19 Bloomberg Philanthropies, Paulson Institute (2016), Green Finance for Low-Carbon Cities, accessed at https://www. IS.pdf
bbhub.io/dotorg/sites/2/2016/06/Green-Finance-for-Low-Carbon-Cities.pdf 39 Ibid.
40 World Bank (2015), East Asia’s Changing Urban Landscape, Measuring a Decade of Spatial Growth, accessed at
http://www.worldbank.org/content/dam/Worldbank/Publications/Urban%20Development/EAP_Urban_Expansion_
full_report_web.pdf

Latin America and the
Caribbean Climate-Smart
31
O V E RV I E W
The Latin American and Caribbean region, which stretches from Mexico
to Panama to Argentina, is experiencing unprecedented increases in
Latin America and energy demand, population growth, and urbanization, exacerbated by
an acute need for improved infrastructure for more efficient industry,
transport, and power. The region’s economies are ripe to move to the
the Caribbean next level of climate-smart development. Its greenhouse-gas footprint

has reduced by about 11 percent since the start of the century, while
maintaining gross GDP growth at an annual rate of about 3 percent.1
Climate-Smart The decline in emissions is the result of growing renewable energy
and energy-efficiency investments. Brazil, Chile, and Mexico have
used innovative, market-based auctions and other policy approaches
to bring significant private investment in renewable energy into the
region. However, the region remains vulnerable to climate change due
Investment Spotlights to its reliance on fragile natural resources – such as the coral reefs in the
Caribbean – for economic activities and livelihoods.

2016 - 2030 ($ billion) Investment potential
Based on IFC’s analysis of the climate pledges of Argentina, Brazil,
$3,000
Colombia, and Mexico, the region’s total climate-smart investment
$195 $2,640
potential is over $2.6 trillion by 2030. Almost 60 percent of this amount
$2,500 $338
is for improvements and new investments in transport infrastructure
$791 ($1.5 trillion), while a third ($901 billion) will go towards developing
$2,000 new green buildings for Latin America’s future sustainable cities. Due
to policy changes and growing business interest, opportunities for
$1,500
investment in climate-smart agriculture are significant, but no valid
$1,316
estimates exist.
$1,000
The LAC region occupies a highly enviable position in terms of
attracting significant climate finance for sectors such as renewable
$500
energy generation, energy efficiency and green urban infrastructure
$- The low-carbon policies and plans that reinforce the Latin American
BRAZIL MEXICO ARGENTINA COLOMBIA TOTAL
and Caribbean region’s NDCs reflect the region’s decades of experience
Buildings Industrial EE Renewables Transport Waste in generating electricity from carbon-friendly power sources. The

Climate Investment
Spotlights
Photo: World Bank
CO L O M B I A – B U S R A P I D T R A N S I T
In November 2012, IFC facilitated a $176 million financing
package to Recaudo Bogota – Bogota’s bus operator – to
develop and operate fare collection and fleet management
and real-time monitoring via information technology. The
financing resulted in improved public transportation for 6
million passengers, with more efficient bus routing and lower
GHG emissions.
region uses hydropower extensively, giving it the highest rate of clean

energy penetration in the world.
Our assessment of selected renewable energy opportunities in Argentina,

Brazil, Colombia, and Mexico reveals a conservative estimate of $232
billion in investment potential by 2030. The rest of the Latin American
and Caribbean region demonstrates strong investment potential
of nearly $200 billion for renewable energy, bringing the region’s
cumulative investment opportunity for renewable energy to $432
billion, excluding traditional investments in large-scale hydropower.
B R A Z I L - R E N E WA B L E E N E R G Y
Urban infrastructure In July 2013, IFC provided $71 million in equity to CPFL
Renovaveis (CPFLR), a company that develops, constructs,
Latin American cities are already serving as models for innovative, and operates wind, small hydro, and biomass projects in
low-carbon transport systems. The region’s dense populations and Brazil. This project involves the financing of 530 MW of
renewable energy projects in CPFLR’s 3.8 GW pipeline in
widespread use of public transport means its greenhouse-gas emissions advanced stages of development. The project will result
per capita are significantly lower than other parts of the world. in significant growth in CPFLR’s operating capacity and
contribute to Brazil’s energy diversification.
Transport electrification is an important next step in decarbonizing the
sector, but this will require considerable infrastructure investments.2
Latin America and the Caribbean Climate-Smart Investment Potential 33

Renewable energy
In 2015, more than $17 billion was committed in renewable energy
investments in the Latin American and Caribbean region, driven heavily
by Brazil ($6.9 billion, or 40 percent of total investment). Three other
countries set records: Mexico ($3.9 billion) and Chile ($3.4 billion)
more than doubled their previous year’s investment, while Uruguay’s
investment ($1.1 billion) increased by 25 percent between 2014 and
2015. Most renewable energy investment was in wind energy ($10.7
billion), followed by solar power ($3.8 billion). The region’s vast
renewable energy resources and high targeted shares for renewable
energy deployment enabled successful tenders in several countries, which
resulted in some of the world’s lowest bid prices.4 Recent legislative
changes that allow small-scale generators to enter the electricity market,
along with the growing role of cooperatives in delivering renewable
energy solutions for rural electrification, are further improving the
region’s outlook.
Adaptation and resilience

The region also has the opportunity – and imperative – to increase
private investment in climate-resilient infrastructure. The region faces
serious challenges, including threatened drinking water resources,
the potential for reduced crop yields, and flooding caused by rising
sea levels. Caribbean islands are particularly susceptible to climate
change and are expected to suffer natural disasters such as hurricanes
In Bogotá, Colombia, public and private transport systems consume and floods with increasing intensity in the coming decades. Climate
67 percent of energy. There are more than 1.5 million vehicles in the change also poses a risk to Latin America’s energy systems. In 2015, for
city, along with bus rapid transit systems and an extensive network of example, Brazil experienced a severe drought that reduced water levels
bike lanes. to below 37 percent of capacity – in a country that generates nearly 80
Air and maritime transport solutions are also needed in the region and percent of its electricity from hydroelectric dams. The drought almost
offer considerable potential for emissions reductions. Several ocean and dried up one of Brazil’s most iconic natural treasures, Iguazu Falls.5
airfreight companies, for example, as well as commercial airlines, have

already pledged to reduce carbon emissions.3

ARGENTINA
Argentina’s estimated climate- by the country's new government are improving the
investment climate, including removing energy and
smart investment potential transportation subsidies. Investors are seeing rising
construction volumes and opportunities for building
is more than $338 billion in upgrades, transport, and waste management.
selected sectors from 2016–2030. As part of new legislation passed in March 2016,
the country has introduced a renewables mandate,
The country’s NDC aims to reduce its greenhouse-gas feed-in tariffs, and tax incentives to help support the
emissions by 15 percent by 2030, relative to business- development of renewable energy.6 Greenhouse-gas
as-usual projections. Argentina is one of Latin America's intensive sectors such as agriculture and cattle-ranching
largest and wealthiest countries but the country is still are important to Argentina’s economy, offering investors
emerging from a monetary crisis. Several recent reforms opportunities for climate-smart solutions.
A R G E N T I N A I N D I C AT O R S

Argentina passed legislation that establishes mandatory IFC estimates that more than $9 billion will be invested in new GDP growth: 2.4%
renewable energy generation targets: 8 percent by 2017 and 20 low-carbon buildings in Argentina by 2020. To help reduce Inflation: 10.6% (2013)
percent by 2025. This will require about 11 GW of new capacity greenhouse-gas emissions from the country’s transport sector, Ease of Doing Business rank: 117
over the next 10 years.7 IFC estimates the investment potential in green infrastructure for rail and roads is projected to be a $64
S&P credit rating: B-
Argentina for wind projects in 2020 to be $3 billion, while solar billion opportunity by 2020 and waste presents a $1 billion
PV and biomass energy represent opportunities of $3 billion and opportunity.8 The country plans to increase urban rail capacity
$1 billion, respectively. to 4 million passengers by 2023 and to modernize the public GHG emissions rank: 29 (2012)
rail transport system by incorporating efficient technologies and Renewable energy capacity: 11.3 GW
services.9
L O W C A R B O N TA R G E T S
Solar Buildings • 8% renewable energy in final energy

$3B Argentina’s climate- $9B Argentina's climate- consumption by 2017
smart investment smart investment
potential in the potential in urban • 20% renewable energy in final energy
power sector by infrastructure by consumption by 2025
2020 2020
$7B Wind $74B Transport
$3B $64B I F C C L I M AT E B U S I N E S S
(FY2010 – 2016)
Biomass Waste
$1B $1B
• Other mitigation: $25 million

 Priorities for Argentina to attract more Agribusiness & forestry: $26 million
UNLOCK THE POTENTIAL OF I N C R E A S E C L I M AT E-S M A RT L E V E L T H E P L AY I N G F I E L D F O R

RENEWABLES A G R I C U LT U R E P O T E N T I A L CLEAN ENERGY
Follow through in implementing new law Increase irrigated crop area and improve Consider introducing a carbon price and
and improve integration of clean energy water resource management. There follow up on 2013 commitment to remove
with the grid. is also large potential for improved inefficient fossil fuel subsides.
livestock practices and no-tillage/
fertilizer recycling.
BRAZIL
Brazil’s estimated climate- large economy and vast middle class continue to make
the country an important destination for long-term
smart investment potential for investment.10
selected sectors is $1.3 trillion Brazil has the largest power market in Latin America,
with a total installed capacity of more than 140 GW
from 2016–2030. in 2015. The country’s size, resources, and proactive
policies have made it the main renewable energy market
Brazil, the world’s ninth largest economy, has pledged to in the region and one of the top 10 in the world.11 In
reduce greenhouse-gas emissions by 37 percent by 2025 December 2015, Brazil approved its latest 10-Year
from 2005 levels, and by 43 percent by 2030. Brazil’s Energy Expansion Plan. The plan includes new targets
economy contracted 3.8 percent in 2015, setting GDP for 7 GW of utility-scale solar power and 1.3 GW of
back to 2011 levels. Despite these difficulties, Brazil’s distributed solar PV capacity to be installed by 2024.12
B R A Z I L I N D I C AT O R S

 Renewable energy Urban infrastructure GDP: $1.8 trillion
Large hydropower remains the principal source of electricity Almost 85 percent of Brazil’s 208 million citizens live in urban GDP growth: -3.8%
generation in Brazil (74 percent in 2015), but energy from wind centers, offering climate-smart investment opportunities to Inflation: 9%
projects has reached price parity with conventional sources and develop and refresh city infrastructure. IFC estimates that more Ease of Doing Business rank: 111
has now become one of the main providers of new capacity.13 than $50 billion will be invested in new low-carbon buildings
S&P credit rating: BB
In 2015, Brazil installed over 2.5GW of wind power alone. and $5 billion in the waste sector by 2020. To help reduce
By 2020, wind power’s estimated investment potential is $32 Brazil’s transport emissions, green infrastructure investment
billion, followed by $12 billion for biomass-generated electricity in rail and roads will require $209 billion by 2020. Plans to GHG emissions rank: 4 (2012)
projects. Solar PV in Brazil will also present major opportunities promote efficiency in urban transport include growing the share Renewable energy capacity: 113 GW
for investment ($8 billion by 2020), as well as small hydro, to a of biofuels in the national transport matrix, and increasing energy
lesser extent ($2 billion). efficient vehicles on the road.14 L O W C A R B O N TA R G E T S
Buildings
Solar $50B Brazil's climate- • National voluntary, non-hydro, clean
smart investment energy generation target of 20% by
$8B potential in urban 2030
infrastructure by
Small 2020 • National greenhouse-gas emissions
hydro $264B Transport
Brazil's climate- reduction target of 36.1% to 38.9% by
$2B $209B
smart investment 2020, compared to a 2005 baseline
potential in the
(non-binding)
power sector by
Waste
2020
$54B Wind $5B
(FY2010 – 2016)
Biomass  Priorities for Brazil to attract more
$12B climate-smart investment Total climate finance: $591 million

DIVERSIFY RENEWABLE ENERGY INVESTMENTS
Move renewable generation away from primarily hydropower; incentivize
more distributed generation such as solar PV through policies like net metering. • Other mitigation: $70 million
 Industrial energy efficiency This will help address high costs and allow more finance to flow. Climate finance, selected NDC sector:
The government of Brazil has yet to establish a comprehensive Agribusiness & forestry: $96 million
national energy efficiency policy but the country’s NDC does U N TA P T H E E N E R G Y E F F I C I E N C Y R E S O U R C E
cover a proposed goal to reduce electricity consumption by In spite of vast potentials in all sectors, Brazil’s focus on energy efficiency has
10 percent by 2030. The potential for investment in Brazil’s mainly been on buildings. The industrial sector has strong potential for energy
efficiency that could be achieved through a focused sector-specific approach.
industrial sector is significant. For example, the amount of
electricity generated by CHP in Brazil’s industrial sector is
L E V E L T H E P L AY I N G F I E L D
currently less than one percent.15 IFC’s assessment of investment
potential for measures to improve energy efficiency in Brazil’s The government should capitalize on growing interest in the Brazilian corporate
sector to support carbon pricing and investigate options that would both raise
industrial sector by 2020 is $6.4 billion.
revenues and level the playing field for clean energy.
GLOBAL THEME Climate-Smart Cities
IFC Project Examples
Sustainable Cities
S U S TA I N A B L E S K Y L I N E S , CO L O M B I A
IFC provided technical support and helped to
address barriers for the construction sector in the
development of Colombia's new green buildings
In 1900, London was the only city in the world with But urbanization does not automatically breed economic codes. Buildings are expected to consume up
a population of more than 5 million people. Today, and social success. If growth is not managed properly, to 45 percent less water and energy, and this
will reduce construction sector emissions by 28
there are over 70 cities with at least as many people. the negative effects of rapid urbanization may slow or
percent by 2021.
The world’s urban population is growing by between even reverse economic development. This means that the
60 million and 70 million people a year, and 70 percent choices we make today will have lasting consequences.
of the emerging market population is expected to live in Cities generate 70 percent of carbon dioxide emissions.
cities by 2050. Urbanization is particularly prevalent in Carbon reduction and infrastructure efficiency are often
developing markets and the time is now to capitalize on linked; urban planning that seeks low-carbon solutions
this trend. in the most carbon-intense sectors (housing, transport,
waste, water, and street lighting) will often have benefits
Cities are a profitable and scalable business. IFC is
for citizens and the climate.
pursuing comprehensive city engagements with Istanbul,
Bogotá, Medellín, Buenos Aires, and Belgrade, focusing on Mayors play a critical role in determining the policies
urban transport, energy efficiency, water and sanitation, and investments that will shape the long-term carbon
solid waste, and various aspects of preserving and footprint of a city. It is their role to develop a city’s U R B A N WAT E R S Y S T E M S E X PA N S I O N,
strengthening the financial health of these cities. Research vision and strategy. But this is not always easy – mayors CHINA
shows that the bigger the city, the more the average have conflicting priorities and limited time, budgets, and IFC provided a $16 million loan to a private
company investing and operating in the water
citizen owns, produces, and consumes. On average, as city human resources to identify and implement climate- supply and wastewater treatment sector in
size increases, per capita quantities such as wages, GDP, smart infrastructure solutions. Within this context there China’s second and third-tier cities.
number of patents produced, and number of educational is a growing need for private sector interventions.
and research institutions all increase by about 15 percent
more than expected linear growth.

M E T R O E X PA N S I O N, T U R K E Y
IFC provided a $68 million loan to the
Metropolitan Municipality of Istanbul to expand
the metro system to the Asian side of the city.
STREET LIGHTING, INDIA

The growing role of the private sector in The private sector also brings technology solutions.
Through an advisory project, IFC helped India’s
climate-smart cities Competitive tendering allows city mayors to tap Orissa State upgrade its street lighting network
into private sector innovations for solutions to city under a public-private partnership that will
While private companies have often been the improve energy efficiency and increase safety in
implementers or managers of municipally funded challenges. These may include technologies in building areas currently without street lights.
projects, there is growing opportunity for mayors to shift materials that have a lower carbon footprint; “smart”
the investment outlay for such projects to companies technology for water, waste, and transport that
through public-private partnerships. Infrastructure improve efficiency and effectiveness; and innovative
concessions that define project parameters and issue ways to address a historical problem (for example,
tenders for the lowest price can foster competition Uber and Lyft). By issuing tenders that define the
among private players to maximize efficiency and reduce project’s objective instead of the technology to be used,
costs. This often results in lower overall financial outlays municipalities can receive the most affordable, effective
for governments and shifts payments from their capital solution available.
budget to expenses.

COLOMBIA
Colombia’s estimated climate- living in cities, 30 percent of which are concentrated in
Bogotá, Cali, Medellín, and Barranquilla.17
smart investment potential for The country aims to meet its climate target through
selected sectors is more than eight sectoral mitigation action plans. Transportation is
a major area of growth for investors. Only 14 percent
$195 billion from 2016 – 2030. of Colombia’s roads are paved, the rail system is small
and ageing, and transportation costs are some of the
Colombia’s NDC targets a 20 percent greenhouse-gas highest in South America. The Colombian National
reduction by 2030. In 2015, the country had the fourth Infrastructure Agency, created in 2011, announced
largest GDP in the region after Brazil, Mexico, and an ambitious plan of public-private partnerships to
Argentina. Colombia has sustained a healthy average attract between $20 billion and $50 billion in funding
growth rate of more than 4 percent for the past decade. 16
from 2011 to 2021.18 Adaptation is also important to
The economy has been boosted by improvements Colombia and its NDC sets out goals to build climate
to the business environment, sound macroeconomic resilience by 2030 in key sectors, such as transport,
management, and investment growth. The country is energy, agriculture, housing, tourism, and industry.
highly urbanized, with 75 percent of the population
C O L O M B I A I N D I C AT O R S

Colombia has some of the highest energy potential in the IFC estimates almost $8 billion of investments will be made in GDP growth: 3.1%
Latin American and Caribbean region because of its favorable new low-carbon buildings in Colombia by 2020. The country Inflation: 5%
climate and geography. The majority of Colombia’s renewable has been an active leader in investing in urban transportation Ease of Doing Business rank: 54
energy generation is large hydropower, with only 3.3 percent solutions—such as bus rapid transit—and another $34 billion is
S&P credit rating: BBB
coming from non-hydropower sources. The government seeks to expected to be invested as well as $1 billion in the waste sector
nearly double that number by 202019, increasing the amount of by 2020. In transport, the country plans to continue increasing
renewable energy in the total energy mix. Colombia’s estimated energy efficiency in the aviation sector and improving transport GHG emissions rank: 47 (2012)
investment potential for wind projects is $2 billion by 2020 and connectivity with construction of additional roads (19,561 km), Renewable energy capacity: 11.6 GW
solar PV projects should see a more modest $200 million. rail (1,769 km) and waterways (5,065 km)20. Colombia is also
ramping up green buildings through new building codes. L O W C A R B O N TA R G E T S
• 6.5% on-grid and 30% off-grid

Solar Buildings consumption by 2020.
$0.2B Colombia’s climate- $8B Colombia’s climate- • Cut greenhouse-gas emissions by 20%
smart investment smart investment
relative to business as usual by 2030
potential in the potential in urban
power sector by infrastructure by compared to 2010 levels.
2020 2020
$2.2B Wind $43B Transport
$2B $34B I F C C L I M AT E B U S I N E S S
(FY2010 – 2016)
Waste
 Priorities for Colombia to attract more Climate finance, selected NDC sector:
Transport: $13 million
GROW THE MARKET FOR DIVERSIFY THE RENEWABLE GET THE PRICES RIGHT
C L I M A T E - S M A R T A G R I C U LT U R E ENERGY BASE
Colombia’s Finance Ministry has recently
Support new technologies and research Given its reliance on large hydropower announced that it is interested in exploring
in new crop varieties that are resistant and the risk of drought, Colombia could options for carbon pricing as a way to
to increasing temperatures, while also use the 2014 law to provide regulation help implement the country’s climate
providing funds and technical assistance to and incentives to other forms of goals. Industry is supportive, as this would
build the market. renewable energy. help level the playing field for renewables
against traditional fossil energy and make
renewables more competitive.
MEXICO
Mexico’s estimated climate- Private sector interest in Mexico is high – the country
possesses world-class potential for renewable energy
smart investment potential for and its industrial, transport, buildings, waste, and
agricultural sectors are all ripe for energy efficiency
selected sectors is $791 billion and climate-smart measures. In 2015, Mexico was
among the top 10 countries in the world attracting
from 2016–2030. new clean energy investment, with a total of $4 billion
Mexico’s NDC establishes a 25 percent reduction in in investments.21 Mexico’s status as a low-carbon
greenhouse-gases by 2030 relative to business-as-usual investment destination is due in part to its major reforms
projections. Alongside Mexico’s NDC commitments, to liberalize power markets, which are expected to be
the government has initiated reform efforts in the completed in 2018.
power sector. In December 2015, Mexico’s Congress Despite this positive momentum, investors are still
approved the Energy Transition Law, affirming a 35 experiencing challenges. The oil sector in Mexico carries
percent increase in the use of clean energy by 2024. Also, considerable political weight and the government is
Mexico’s 2012 General Climate Change Law established prioritizing the installation of new natural gas-fired
a goal to reduce GHG emissions by 30 percent by 2020 thermal plants in order to take advantage of cheap
and 50 percent by 2050. supply from the United States.
M E X I C O I N D I C AT O R S

Mexico held its first reverse power auction in March 2016. A Like much of the region, Mexico is urbanizing and 75 percent GDP growth: 2.5%
total of 18 projects were awarded 1,691 MW in solar power and of the population lives in urban areas. However, urban transport Inflation: 2.7%
394 MW in wind power. The auction’s average contract price infrastructure is generally poor and emissions-intensive. IFC Ease of Doing Business rank: 42
($47.6/MW-hour) was one of the lowest and most competitive estimates that Mexico’s low-carbon transport sector will present
S&P credit rating: BBB+
worldwide.22 Mexico’s wind sector is expected to provide an $11 $132 billion in investment opportunity by 2020 that emphasizes
billion investment opportunity by 2020 and solar PV power will a system-wide change to increase connectivity and improve
present a $6 billion opportunity. The country is also a global maintenance of roads, bridges, and major highways. Mexico GHG emissions rank: 13 (2012)
leader in developing geothermal projects, with sector investments has been a leader in green buildings; this sector and the waste Renewable energy capacity: 17.3 GW
of $1 billion by 2020. Small hydro presents a $2 billion sector offer $33 billion and $3 million respectively in investment
opportunity for would-be investors. opportunities by 2020. L O W C A R B O N TA R G E T S
Small Buildings
Hydro $33B Mexico’s climate- • 35% electric generation from non-fossil
$2B smart investment sources (hydro & nuclear) by 2024.
potential in the
power sector by • 30% reduction of greenhouse-gas
Solar
2020 emissions by 2020 compared to base
$6B Mexico’s climate-
$165B Transport
smart investment year 2000.
potential in the
$132B
• 50% reduction of greenhouse-gas
power sector by
2020 Waste
emissions by 2050 compared to base
$20B Wind
$3M year 2000.
$11B
Geothermal I F C C L I M AT E B U S I N E S S
$1B
 Priorities for Mexico to attract more (FY2010 – 2016)
LEVERAGE MEXICO’S ENERGY EFFICIENCY RESOURCE Total climate finance: $399 million
 Industrial energy efficiency Extend successful efforts in the buildings sector to areas like HVAC • Renewable energy: $164 million
and lighting, as well as transport and industry. • Energy efficiency: $173 million
IFC’s assessment of investment potential for measures to improve
energy efficiency in Mexico’s industrial sector by 2020 is $400 • Other mitigation: $62 million
IMPROVE RESOURCE EFFICIENCY
million. Despite the country’s climate change efforts in other
Mexico’s fertilizer use is especially high in the north, and can
sectors, Mexico currently has no national target for energy be made more efficient through soil nutrient tests, precise
efficiency improvements for its industrial sector nor does it fertilization, and use of organic or less impactful inputs. Water use
provide many incentives for improving energy efficiency to can be optimized through increasing investment in greenhouses
companies in the manufacturing sector.23 The country does have and drip irrigation. Agricultural insurance also holds promise.
numerous policies and mechanisms to help drive investment

GET THE PRICES RIGHT
in energy efficiency overall, but to date the priories have been
lighting, appliances and energy efficiency in buildings for the Mexico should build from its existing carbon tax and implement a
national carbon market. This will help level the playing field for low-
residential and commercial sectors.
carbon options, as electricity prices are quite low.
Endnotes
1 IFC (2016), Climate-Smart Investment Potential in Latin America: A Trillion Dollar Opportunity, access at https://
www.ifc.org/wps/wcm/connect/0d9f8fbf-2738-4432-843c-05184b9546d8/LAC+1Trillion+6-13-16+web+FINAL.
pdf?MOD=AJPERES
2 Institute of the Americas (2016), Beyond Paris: Energy Transition in Latin America and the Caribbean, access at
https://www.iamericas.org/documents/energy/reports/Beyond_Paris.pdf
3 Ibid
4 IFC (2016), Climate-Smart Investment Potential in Latin America: A Trillion Dollar Opportunity, access at https://
www.ifc.org/wps/wcm/connect/0d9f8fbf-2738-4432-843c-05184b9546d8/LAC+1Trillion+6-13-16+web+FINAL.
pdf?MOD=AJPERES
5 Ibid
6 BNEF (2016), Brazil Country Profile, Commentary Section
7 Project Finance International (2016), Global Infrastructure Report 2016, “Argentina’s New Infra Groove”, accessed at
http://www.pfie.com/argentinas-new-infra-groove/21250566.article
8 Ibid
9 Argentina Transport Ministry (2016) “14 millones de dólares para los trenes metropolitanos”, access at http://www.
transporte.gob.ar/content/noticia_14000millonesdedl_1473363679/
10 United States Department of State (2016), “Brazil Investment Climate Statement 2016”, access at http://www.state.
gov/e/eb/rls/othr/ics/.
11 BNEF (2016), Brazil Country Profile, Commentary Section
12 Ibid
13 Ibid
14 Government of Brazil (2007) “National Plan on Climate Change”, access at http://www.mma.gov.br/estruturas/
imprensa/_arquivos/96_11122008040728.pdf
15 American Council for an Energy-Efficient Economy (ACEEE) (2016), International energy Efficiency Scorecard, access
at http://aceee.org/sites/default/files/pdf/country/2016/brazil.pdf; see also http://aceee.org/sites/default/files/
publications/researchreports/e1602.pdf.
16 United States Department of State (2016), “Colombia Investment Climate Statement 2016”, accessed at http://www.
state.gov/e/eb/rls/othr/ics/.
17 MARS Advanced Energy Centre (2015), Market Information Report: Colombia, access at https://www.marsdd.com/
wp-content/uploads/2016/08/MaRS_Market_Insights_Market_Information_Report_Colombia.pdf
18 Ibid
19 Ibid
20 Colombian Office of the Vice President (2015) “Plan Maestro de Transporte 2-15-2035, el horizonte de Colombia:
Vargas Lleras” http://www.vicepresidencia.gov.co/prensa/2015/Paginas/Plan-Maestro-de-Transporte-2015-2035-el-
horizonte-de-Colombia-151125.aspx
21 BNEF (2016), Mexico Country Profile, Commentary Section
22 Ibid
23 American Council for an Energy-Efficient Economy (ACEEE) (2016), International Energy Efficiency Scorecard,
accessed at http://aceee.org/sites/default/files/publications/researchreports/e1602.pdf.

South Asia Climate-Smart
47
O V E RV I E W South Asia was the world’s fastest growing region with 7 percent GDP
growth in 2015, led by India. Although the region comprises 3 percent
of the world’s land area, it is home to more than 23 percent of the
world’s population and at least 14 percent of its urban population.1 The
region is particularly vulnerable to climate change because of its large
South Asia population and vast low-altitude agricultural and economic activities.
In addition, despite South Asia’s rapid growth, the region continues to
Climate-Smart
suffer from a significant lack of modern, sustainable infrastructure (500
million people remain without access to electricity). Rapid urbanization
is placing significant demands on infrastructure, driving the need for
Investment Potential power, transport, water, waste management, and sustainable cities. This
has been met with surging consumption of coal in power generation
and industry making India the largest source of growth in global coal
Investment Spotlight use.2 A proactive approach is needed for the region – one that combines
investments in adaptation and resilience with low-carbon infrastructure
and services. The expansion of new technologies is leading to changing
business models and innovation in service delivery. This is most apparent
Climate-Smart Investment Potential in the booming renewable energy marketplace in India in particular,
2016 - 2030 ($ billion) where recent tenders have resulted in some of the most competitively
priced projects in the world.
$2,500
$138 $2,334
$2,096
Investment potential
$2,000 Based on IFC’s assessment of opportunities for climate-smart investments
in the NDC plans of Bangladesh and India, the region will nearly have
an estimated $2.2 trillion in investment potential by 2030, 69 percent of
$1,500 which is for new construction of green buildings. In India, infrastructure
investments for transportation (ports and rail especially) will reach $250
billion by 2030, while critical investments in clean energy, including
$1,000
energy efficiency, will reach close to $400 billion. Opportunities for
investment in climate-smart agriculture, forestry, and land-use change
projects across the South Asia region are also significant, but estimates
$500
have not been made for this report due to data and resource availability.
$-
The region's projected population growth and energy demand offer
INDIA BANGLADESH TOTALS
a significant opportunity for resilient infrastructure and renewable
energy investment.
Buildings Industrial EE Renewables Transport Waste

Climate Investment
Spotlight
N E PA L – C L I M AT E-S M A RT A G R I C U LT U R E
IFC is working with agribusiness firms in Nepal to promote
improved agricultural and water management practices. This
will help small farmers producing rice, maize, and sugarcane
to improve their resilience against climate change. The $9
million project was funded by the Pilot Program for Climate
Resilience and is expected to help 15,000 people improve
their climate resilience. By starting small and proving the
viability of a climate-smart business model, IFC lays the
foundation for future investments that promote resilience
Adaptation and resilience without sacrificing productivity. The Pilot Program for
Climate Resilience Nepal has already been replicated on a
South Asia is one of the regions most vulnerable to the effects of climate change because larger scale in Bangladesh.
of its large population and degraded natural resources (for example, damaged and
depleted aquifers, degrading forests and soils). It also has the highest poverty rate in the
world. Fortunately, the synergies between development progress and the opportunities
to invest in resilient and low-carbon projects mean South Asia will remain at the center
of the climate finance landscape for years to come.
Bangladesh’s NDC highlights the urgent need to enhance adaptive capabilities and
livelihood options for its citizens. Climate change is already affecting water supply,
hydro and thermal power, transport, and agribusiness.
Renewable energy
The renewable energy sector in South Asia receives both local and foreign investment.
India’s clean energy investment reached $10.1 billion in 2015.3 For the first time,
South Asia Climate-Smart Investment Potential 49

investments in solar energy surpassed those in wind power, reflecting
higher government targets and lower auction bids for solar energy.
Indian renewable energy companies also attracted the world’s second
highest venture capital funding in 2015. Its total of $548 million
surpassed all of Europe ($301 million), and the outlook is good for
future large transactions.4
Although India leads the region in investment volumes, its neighbors

are increasing their investments. Pakistan, for example, attracted
a record $720 million in wind and solar investment in 2015. The
country’s Alternative Energy Development Board believes it is on
the verge of crossing the $1 billion-a-year threshold.5 After installing
millions of small solar home systems, Bangladesh plans to add 3.1 GW
of renewable energy capacity by 2021. This will be met mainly by
grid-scale solar and wind projects, for which it has received proposals
from North American, Chinese, Korean, Japanese, German, and Indian
companies.6

climate investment
Bangladesh and India submitted comprehensive NDCs that clearly
outline their climate policies and priorities for the next 15 years.
Bangladesh’s unconditional NDC pledged a 5 percent reduction in
greenhouse-gas emissions by 2030 from key emitting sectors, while India
committed to cutting its emissions intensity by a third by 2030.
BANGLADESH
Bangladesh’s NDC focuses on the energy sector to mitigate emissions

in the power, transport, and industry sectors – each representing
opportunities for future private sector investment. Bangladesh, however,
is a minor contributor to global emissions (0.35 percent of total
emissions) and the greatest investment opportunities are to be found in
adaptation and resilience solutions.

Overall, IFC’s 2030 estimates put Bangladesh’s climate-smart business investment Climate Investment
potential at over $138 billion, with the bulk of this opportunity lying in the green
Spotlight
buildings sector ($113 billion). Renewable energy presents a $17 billion investment
opportunity while transport measures will need a conservative investment of $5 billion
over the NDC timeframe.
INDIA
Few countries in the world are more important to solving the climate crisis than India.
The sheer size of the country alone – with a population expected to reach 1.6 billion by
2040 – means India will present enormous opportunities for the private sector to invest
in climate-smart projects. Although India’s per capita emissions are comparatively
low, its current commitments mean it will become the world’s second largest emitter
after China, surpassing both the European Union and the United States in terms of
I N D I A –U T I L I T Y-S C A L E S O L A R
total emissions by 2030. India’s NDC pledge includes commitments to nearly triple
The Azure project involves development of a 40 MW solar
its renewable energy capacity by 2022, to raise the share of non-fossil-based power power plant in the State of Rajasthan by Azure Power India
generation capacity to 40 percent of installed capacity by 2030, and to increase its Private Ltd. The off-taker will be Solar Energy Corporation of
India, a Government of India entity. When fully functioning,
carbon sink – more carbon absorbed than released – to 2.5–3 gigatonnes of equivalent
the project will avoid close to 20,000 tons of greenhouse-gas
carbon dioxide through additional tree cover by 2030. emissions annually. IFC’s portfolio in Indian wind and solar
power exceeds $700 million and includes 3 GW of solar and
Overall, India’s climate-smart business investment potential is an estimated $2.1 trillion. wind—about 10 percent of the country’s installed renewable
energy capacity. IFC was an early investor in Azure Power,
In the sectors IFC considered, investment in renewable energy accounts for more than which is now a leading player in grid-connected solar power.
$320 billion, with nearly two-thirds of this ($201 billion) going to solar PV projects Today, the company has a portfolio of solar plants across
several states and is on track to reach 500 MW of operational
and the other third going to wind power ($104 billion) and biomass projects ($15
capacity this year. This was the first solar project under IFC’s
billion). Low-carbon, climate-resilient investments in the transportation sector (ports, new clean technology investment program.
rail, roads, and other critical infrastructure) will present a $250 billion opportunity
by 2030. The green buildings market in India presents an opportunity of more than
$1.4 trillion by 2030.

BANGLADESH
Bangladesh’s estimated climate- reliable electricity in Bangladesh live in poor, rural
areas. For example, its off-grid solar program is the
smart investment potential is largest market for solar home system kits in the world
(more than 4 million sold).8 According to its NDC, the
nearly $138 billion from 2016 government also plans to shift 20 percent of current
road transport users to trains. Bangladesh has designed
– 2030. a plan for a 10 percent reduction in energy consumption
Bangladesh’s unconditional NDC establishes a 5 percent by industries, with similar targets in the agriculture and
reduction from business-as-usual levels in 2030. As the building sectors.
world’s eighth most populous country, Bangladesh offers Access to finance, however, is still a challenge for
promising opportunities for climate-smart investment. small-scale projects. Commercial interest rates typically
With more than 6 percent annual growth sustained range between 11 percent and 14 percent for renewable
over the past two and a half decades; a large, young, energy projects, although the government sometimes
and diverse workforce; strategic location; and vibrant provides loans at lower rates for the purchase of capital
private sector, Bangladesh is likely to attract increasing equipment.9 Apart from a range of financing programs
investment in coming years.7 The power generation for off-grid solar, solar irrigation, mini-grids, biogas,
sector, for example, has made substantial progress in and biomass projects, the country does not have specific
recent years but still requires significant investment to incentives for larger projects. A draft feed-in tariff for
meet growing demand. wind and solar projects stalled in 2015. In its NDC
submission, Bangladesh estimated that $27 billion is
Opportunities for off-grid renewable energy solutions
needed for mitigation and $42 billion for adaptation
are abundant – many of the people without access to
measures between 2015 and 2030.
B A N G L A D E S H I N D I C AT O R S

Bangladesh is one of the most densely populated countries in the Bangladesh aims to reach middle-income status by 2021 – the 50th GDP growth: 6.6%
world (1,015 people per square kilometer).10 The availability anniversary of its independence. To achieve this milestone, the country Inflation: 6.2%
of land has been cited as a major constraint to growing the needs to accelerate growth and urban transformation in parallel.11 Ease of Doing Business rank: 172
renewables sector enough to meet the country’s power demand. IFC estimates $11 billion of investment in new construction of green
Despite the country’s serious need for grid expansion, aggressive buildings in Bangladesh by 2020. There are also many opportunities for
incentives for renewables, and limited access to financing, IFC low-carbon transportation investments, and our estimate of $2 billion
estimates Bangladesh will attract $7.1 billion for renewables by 2020 only covers a small portion of the expected overall sum. GHG emissions rank: 43 (2012)
by 2020. Government targets will help drive commercial Additional plans in low carbon transport include growing the high Renewable energy capacity: 230 MW
investments in solar PV ($4 billion), wind ($3 billion), and efficiency vehicles market, constructing three bus rapid transit corridors
biomass ($100 million) by 2020. and three metro corridors by 2030, and expanding the railway network
by 120 km by 2021.12 Lastly, waste management presents a $200
million opportunity by2020.
• 10% renewable energy sources by 2020
Solar PV
Buildings • 3.1 GW of renewable capacity by 2021
$4B Bangladesh's climate-
smart investment $11B Bangladesh's climate-
potential in smart investment
potential in urban
renewables by 2020 I F C C L I M AT E B U S I N E S S
infrastructure by 2020
$7.1B Wind (FY2010 – 2016)
$13.2B Transport
$3B
$2B
Biomass
Waste • Energy efficiency: $29 million
$0.1B
$0.2B
 Priorities for Bangladesh to attract

 Industrial Energy Efficiency more climate-smart investment
There is good opportunity for investment in Bangladesh’s P R O M O T E C L I M AT E S M A RT A G R I C U LT U R E
industrial sector, primarily in high growth sectors such as its
Advance agribusiness through supporting seed resilience and climate
Textiles and Ready Made Garments industries. By 2020, IFC insurance initiatives.
estimates the climate-smart investment potential for energy
efficiency to be $600 million.13 This figure is a conservative EXPAND RESOURCE EFFICIENCY
estimate of the energy efficiency options for Bangladesh’s Establish energy use benchmarks and compliance mechanisms in energy-
industrial sector and does not capture the full technical potential intensive sectors to stimulate industrial energy efficiency investments.
available.
TRANSITION TO A CLEANER POWER GRID
Introduce robust commercial framework with transparent policies

on PPAs, convertibility etc., to facilitate private sector participation in
utility scale projects. Regulations on metering and grid interconnection
are needed to capitalize on the large market opportunity in industrial
and commercial rooftop solar.
GLOBAL THEME
Green buildings
The global momentum to build green buildings is triggered mainly by a sense of duty – the top trigger percent of the commercially viable potential expected to
growing, as global green building activity continues to today is client demand, closely followed by regulations be captured.
double every three years.14 The International Energy – which, given the NDCs, is likely to intensify. Meeting
The good news is that home buyers are increasingly
Agency estimates15 that the building sector alone needs the increasing demand for building-related energy
demanding green19 and that energy-efficient houses
an additional investment of up to $296 billion each consumption will have significant implications for
are important for consumers. Furthermore, developers
year if average global temperatures are to be capped at planning, management, and investments in the energy
in the United States and Europe can command higher
2°C. This is in addition to the $358 billion that already sector. Brazil expects sixfold growth in green buildings
sales prices for green-certified homes, ranging from 4
goes into the sector each year. The Intergovernmental (from 6 percent to 36 percent); fivefold growth is
to 9 percent higher; green homes sell as much as four
Panel on Climate Change finds that the building expected in China (from 5 percent to 28 percent); and
times faster; occupants save 15 to 20 percent on lower
sector accounts for 32 percent of total energy use and fourfold growth is expected in Saudi Arabia (from 8
utility bills for green homes; re-sale value is 4 to 10
19 percent of GHG emissions.16 Population growth, percent to 32 percent). This is expected to grow further,
percent higher; and banks enjoy a default rate of up to
combined with urbanization and rising incomes, will as over half of the NDCs (74 developing countries)
33 percent lower from buyers of green homes. These
substantially increase the number of buildings we reference buildings as a key climate investment
numbers are certainly large enough to motivate banks to
currently have, and it is expected that this in turn will opportunity.
invest in green buildings.
double global GHG emissions from the buildings sector
The building sector is one of the main consumers of
to 40 percent. However, in order for lenders to recognize the value
energy and resources, using about 35 percent of global
of a property’s green measures, large-scale adoption of
The biggest growth in green buildings is expected energy (and 60 percent of electricity), 25 percent of
a universal green performance standard with a focus
in developing countries, and the percentage of firms global water, and 40 percent of materials extracted
on areas of cost savings in homes is needed. This is an
expecting to have more than 60 percent of their projects globally. In addition, it emits about one-third of
important driver, especially in the developing world,
certified green worldwide is anticipated to more than greenhouse-gas emissions.18 However, according to the
where utility costs can consume up to 20 percent of
double from 18 percent in 2016 to 37 percent by 2018.17 International Energy Agency, the building sector is the
a moderate-income family’s disposable income. The
It is notable that green building decisions are no longer least exploited source of energy efficiency, with only 20

standard needs to be defined by a certification system of preset green technologies. The product became hotel clients such as SAMHI. It also stimulated capital
that is inexpensive, quick, and simple, thus making it extremely popular, especially for low-income housing markets products and the creation of the Sustainable
accessible to the majority of the market. The standard finance. By 2011, 75 percent of all home mortgages Housing Leadership Consortium. State governments
needs to be supported by a well-understood calculator were green. In 2014, Infonavit decided to issue only (such as Tamil Nadu) are beginning to offer incentives
that can benchmark and measure energy and water green mortgages. The bank’s market share also to the private sector to go green. The EDGE program
savings. The IFC EDGE certification standard and increased significantly (over 12 percent) during the aims to achieve 20 percent market penetration of green
software tool allow developers and investors to choose period. To date, Infonavit has granted over 1 million buildings in seven years20.
the lowest cost options that will help them reach the green mortgages, benefiting over 3 million people.
Indonesia leads with green building codes to cut
green standard. Policy enabling environments, including
• India: Metrics-driven, scalable voluntary standards greenhouse gases. The government of Jakarta issued
building codes, are also critical.
bring together market players and prove the green building regulations to all large new and existing
The following examples demonstrate green building business case for building green. The Green Business buildings on April 23, 2013. To date, 200 large projects
projects in developing countries that are making good Certification Inc. launched EDGE India in August in Jakarta have met the green building regulations
progress: 2015. In just one year, about 20,000 housing units and requirements. On completion, these buildings will
10 million square feet of commercial space met EDGE reduce carbon dioxide equivalent emissions by more
• Mexico’s public bank, Infonavit, changes the low-
standards (energy, water, and materials consumption than 250,000 tons per year and save over $30 million
income housing market to green. In 2007, Infonavit
reduced by 20 percent each). EDGE India attracted in electricity costs. National government has also
piloted green mortgages. This involved providing an
financing for green construction through developers introduced a green building code21.
extra credit (about $1,250) to homeowners for a set
such as VBHC, XANDER, TATA, Shapoorji, and

INDIA
India’s estimated climate- In addition to rapid growth in electricity demand, India
experiences high power grid losses. According to the
smart investment potential for Institute for Energy Economics and Financial Analysis,
the country has the world's highest aggregate grid-loss
selected sectors is $2.1 trillion rate in the world, estimated at 26 percent. In May 2015,
India approved a “National Smart Grid Mission” to
from 2016 – 2030. improve power supply efficiency and reduce grid losses
India’s NDC includes a pledge to reduce the country’s and outages.24
greenhouse-gas intensity by between 33 percent and India has set an ambitious target of developing 175 GW
35 percent by 2030, based on 2005 levels. The nation’s of renewable energy by 2022. At the end of 2015, the
economy is expected to triple in size between now and country had over 80 GW of renewable energy installed
2040, and its population is projected to surpass China’s (including large hydro), representing almost 30 percent
around the year 2030, making India the world’s most of its total power generation capacity and accounting for
populated country. India’s infrastructure financing
22
about 18 percent of total power generation.25 Aside from
needs will range between $1.5 trillion and $2 trillion large hydro, the largest contribution of renewable energy
over the next seven years, offering the private sector by 2020 – 100 GW – is expected from solar power,
excellent opportunities for climate-smart investment.23 followed by 60 GW from wind, 10 GW from biomass,
and 5 GW from small hydropower.
I N D I A I N D I C AT O R S
Population: 1.311 billion

India’s economic growth over the next 15 years will play a An additional 250 million people will be living in Indian cities by 2030. GDP growth: 7.6%
pivotal role in the global fight against climate change. The A reliable and affordable transport system is needed to accommodate Inflation: 5.9%
opportunities for climate-smart investments in the power sector this new growth.27 This trend is reflected in IFC’s investment estimate Ease of Doing Business rank: 134
are substantial and IFC estimates that India will attract $1,411 of $75 billion for modern, climate-friendly transportation by 2030.
S&P credit rating: BBB-
billion for renewable energy alone by 2020. The government has National low carbon transport plans include constructing two
FDI, net inflows: $44.2 billion (2015)
provided a clear trajectory for specific technologies in its NDC, dedicated freight corridors Mumbai-Delhi and Ludhiana-Dankuni,
with solar PV leading the way ($98 billion); of which $13.5 600 km of metro lines, and solar powered toll plazas. National GHG emissions rank: 3 (2012)
billion will be in rooftop solar26. Wind energy is also set to make plans also promote the growth of coastal shipping and inland Renewable energy capacity: 81.8 GW
significant gains ($38 billion). Biomass power will require a water transport, accelerating use of hybrid and electric vehicles, and
smaller, but substantive, figure of $5 billion. developing policies on biofuels and green highways.28 The commercial L O W C A R B O N TA R G E T S
market for investment in green buildings is an estimated $89 billion by
Solar 2020. Waste management presents an opportunity of $3 billion. • 175 GW of renewable energy by 2022:
$98B India's climate-smart 100 GW (solar), 60 GW (wind), 10 GW
investment potential Buildings (biomass), and 5 GW (small hydro).
in renewables by $89B India's climate-
2020 smart investment • Aspirational target of 20% blending of
potential in urban biofuels, both for biodiesel and bio-
$141B Wind infrastructure by 2020
ethanol, by 2017.
$38B
$167B Transport
Biomass
$5B (FY2010 – 2016)
Waste
$3B
Total climate finance: $1.7 billion

 Priorities for India to attract more • Energy efficiency: $744 million
 Industrial Energy Efficiency climate-smart investment
India has made progress in improving energy efficiency and IMPROVE EFFICIENCY OF THE ELECTRICITY SYSTEM Climate finance, selected NDC sector:
boasts a number of initiatives to tackle the issue, yet still requires Agribusiness & forestry: $24 million;
Implement the Ujwal DISCOM Assurance Yojana program to improve
massive investments in industry given growth forecasts for the operational efficiency of electricity distribution companies and
transport: $69 million
manufacturing. One innovative example is the country’s 2012 introduce a robust payment security mechanism to ensure off-takers
market-based program Perform, Achieve and Trade (PAT). pay renewable energy project developers in a timely way.
Now in its second cycle, PAT attempts to improve energy
STRENGTHEN THE TRANSMISSION GRID
efficiency across over 900 companies—representing over half of
industry’s GHG emissions—by implementing an energy savings This will minimize curtailment risks for renewable energy power
generators and enable increased equity investments in the sector.
certification and trading scheme for industry. The investment
potential for industrial energy efficiency in India by 2020 is $28
UNLOCK MORE FINANCING
billion.29
Support greater use of credit enhancements to enable increased
refinancing of underlying assets thereby freeing up balance sheets
and attracting investor capital.
BOX
Endnotes
1 World Bank Group (2016), Leveraging Urbanization in South Asia: Managing Spatial Transformation for Prosperity
EDGE – Excellence
and Livability, access at http://www.worldbank.org/en/region/sar/publication/leveraging-urbanization-south-asia-
managing-spacial-transformation-prosperity-livability.
2 IEA (2015), India Energy Outlook - World Energy Outlook Special Report.
3 BNEF, Clean Energy Investment data download tool, retrieved 9/30/2016.
4 BNEF (2016), Global Trends in Renewable Energy Investment 2016.
in Design for Greater

5 BNEF (2016), “Clean Energy and Carbon Brief,” access at https://www.bloombergbriefs.com/clean-energy-carbon/.
6 BNEF (2016), “Bangladesh Plans Seven-Fold Jump in Renewables by 2021.”
7 United States Department of State (2016), Bangladesh Investment Climate Statement 2016, access at http://www.
Efficiencies
8 BNEF (2016), Bangladesh Country Profile, Commentary Section
9 World Bank (2012), Assessing the Investment Climate for Climate Investments: A Comparative Framework for
Clean Energy Investments in South Asia in a Global Context, access at http://documents.worldbank.org/curated/
en/918921468306559041/pdf/wps6211.pdf.
10 World Bank Group (2013), Bangladesh: The Path to Middle-Income Status from an Urban Perspective, access at
https://openknowledge.worldbank.org/handle/10986/13113.
11 Ibid.
12 Government of Bangladesh Planning Commission, (2010) “Outline Perspective Plan of Bangladesh 2010-2021: Making
EDGE Green Building Certification is an IFC innovation that provides Vision 2021 a Reality”, access at http://planipolis.iiep.unesco.org/upload/Bangladesh/Bangladesh_Final_Draft_OPP_
June_2010.pdf. Also, Government of Bangladesh Ministry of Power, Energy and Mineral Resources (2015) “Energy
builders, bankers, and buyers with a simple, quick, and affordable Efficiency and Conservation Master Plan up to 2030”, access at http://sreda.gov.bd/files/EEC_Master_Plan_SREDA.pdf
quantification of a building’s energy and water efficiency in developing 13 IFC (2012), Industry Specific Study on Sustainable Energy Finance Market Potential for Financial Institutions
in Bangladesh, access at http://www.ifc.org/wps/wcm/connect/064ec0804129f3328d67bddf0d0e71af/
countries. The EDGE certification system presents designers with SEF+Market+potential+study+Bangladesh.pdf?MOD=AJPERES
14 DODGE Data & Analytics (2016), World Green Building Trends, access at http://images.marketing.construction.
green options relevant to local climates, construction customs, and com/Web/McGrawHillConstruction/%7B9cae5ab2-4ea8-429d-915d-49bc72212ebc%7D_World_Green_Building_
Trends_2016_SmartMarket_Report_FINAL.PDF.
building usage patterns, allowing them to experiment with different 15 IEA (2012), Energy Technology Perspectives, access at www.iea.org.
options to improve capital costs, aesthetics, and efficiency. The EDGE 16 Intergovernmental Panel on Climate Change (IPCC) (2014), Fifth Assessment Report, acces s at http://unfccc.int/
science/workstreams/cooperation_with_the_ipcc/items/8732.php.
software application instantly quantifies a design’s expected energy, 17 DODGE Data & Analytics (2016), World Green Building Trends, access at http://images.marketing.construction.
com/Web/McGrawHillConstruction/%7B9cae5ab2-4ea8-429d-915d-49bc72212ebc%7D_World_Green_Building_
water, and carbon dioxide footprint, as well as its incremental cost Trends_2016_SmartMarket_Report_FINAL.PDF.
18 For more information, see http://www.unep.org/sbci/AboutSBCI/Background.asp.
and payback period. In minutes, this allows a designer to see whether 19 See http://realtormag.realtor.org/daily-news/2014/04/07/buyers-want-green-more-they-think.
a design meets the EDGE standard of 20 percent efficiency in energy 20 For more information see www.edgebuildings.com/certify/india.
21 For more information, see www.greenbuilding.jakarta.go.id/index-en.html.
and water consumption and embedded energy in materials, and how 22 United Nations (2015), 2015 Revision of World Population Prospects, access at https://esa.un.org/unpd/wpp/
much additional investment a green design requires. The certification 23 United States Department of State (2016), India Investment Climate Statement 2016, access at http://www.state.
process takes between one and two weeks and the cost is about a tenth 24 Climate Action Tracker (2015), India, accessed at http://climateactiontracker.org/countries/india.html
25 BNEF (2016), India Country Profile, Commentary Section
of other options. Users generally report capital cost increases of about 26 The estimate for rooftop solar is based on 15GW being installed by 2022 as estimated by Bridge to India, see www.
bridgetoindia.com.
2 percent and paybacks of between two and three years. This has led to
27 World Bank (2013), Urbanization beyond Municipal Boundaries: Nurturing Metropolitan Economies and
strong market uptake, with almost a million square meters certified and Connecting Peri-Urban Areas in India, access at http://documents.worldbank.org/curated/en/373731468268485378/
Urbanization-beyond-municipal-boundaries-nurturing-metropolitan-economies-and-connecting-peri-urban-
the adoption of EDGE as a green asset definition for green bonds and areas-in-India.
28 Government of India (2014) “India Transport Report: Moving India to 2032”, access at http://planningcommission.nic.
financial intermediaries in India, South Africa, Turkey, and Costa Rica. in/reports/genrep/NTDPC_Vol_01.pdf
29 IEA (2015), India Energy Outlook, World Energy Outlook Special REport, access at http://www.worldenergyoutlook.
org/media/weowebsite/2015/IndiaEnergyOutlook_WEO2015.pdf
www.ifc.org/EDGE

Sub-Saharan Africa
Potential
59
O V E RV I E W Africa’s projected growth represents a huge economic and development
opportunity, as well as a key focal area for global action to adapt to
and address climate change. Energy demand is rising rapidly in the
region, as is the population and the rate of urbanization. These trends
exacerbate the region’s acute need for improved infrastructure. The
Sub-Saharan Africa region has fueled growth through investments in technology, media and
telecommunications, retail and consumer products, financial services and
Climate-Smart
natural resources.1 Due to the recent depreciation of several currencies
and rising inflation, investing in some parts of Africa has become more
challenging. Africa’s extreme vulnerability to climate change impacts
Investment Potential threatens to undermine major developmental gains, exacerbate existing

weaknesses, and stifle growth prospects. Accelerating investment in
resilient infrastructure and energy access is an immediate priority.
Africa's top priority to address projected growth and climate vulner-
ability is to invest in resilient infrastructure and clean energy access
2016 - 2030 ($ billion)
$900
The estimated total investment potential for the climate-smart needs of
$81 $10 $783
Côte d’Ivoire, Kenya, Nigeria, and South Africa is $783 billion by 2030.
$750
$104 Sixteen percent of this potential is for renewable energy generation ($123
billion), while well over half ($499 billion) is for the transportation sector.
$600 $588 By 2030, the commercial investment potential in the construction of
low-carbon buildings is estimated at nearly $153 billion. Opportunities
for investment in climate-smart agriculture projects across Sub-Saharan
$450
Africa are important in all of the four countries profiled, but currently no
valid estimate exists for the size of this potential.
$300
Adaptation and resilient infrastructure

$150
Warming in the range of three to four degrees Celsius would have
disastrous consequences for Sub-Saharan Africa, including heat
$- extremes affecting the vast majority of the continent’s land area,
SOUTH NIGERIA KENYA CÔTE TOTAL
heightened risks of extreme drought (particularly in southern Africa),
AFRICA D’IVOIRE
crop failures and reduced yield, and flooding.2 Furthermore, by 2050,
Buildings Renewables Transport Waste almost 60 percent of people (800 million) in the region will live in cities,

increasing demand for transport, building, and energy infrastructure.3 Climate Investment
It is thus imperative to invest in resilient infrastructure, including water
Spotlights
management (irrigation, hydropower, water supply, or flood control),
roads, bridges, and other transport infrastructure. According to the
World Bank Africa Climate Plan, these investments amount to $5 billion
to $10 billion per year. 4
Clean energy access

An estimated 600 million people in the region have no access to basic
electricity services, and this number will increase with a projected
2.3 percent annual population growth.5 Only seven Sub-Saharan
countries presently have electricity-access rates exceeding 50 percent;6 S O U T H A F R I C A – CO N C E N T R AT E D S O L A R P O W E R
the rest have an average grid access rate of just 20 percent. The annual In 2012, IFC financed the first concentrated solar power
plants in the region. The 50MW Khi Solar One project
investment in the Sub-Saharan African power system is currently
and 100MW KaXu Solar One projects help diversify South
estimated at around $8 billion per year, or 0.5 percent of GDP.7 As a Africa's electricity away from coal-fired power. IFC invested
result, energy access is a priority. At the same time, electricity demand $143 million in direct financing and blended $41.5 million
in concessional loans through the multi-donor Clean
in Africa is projected to triple by 2030, representing huge potential for Technology Fund. Combined, Kaxu’s 100 MW parabolic trough
investment in renewable energy. CSP plant and Khi’s 50 MW steam receiver power tower
reduce annual GHG emissions by more than 260,000 tons,
Africa’s power sector requires investments of $70 billion per year, on while providing reliable and affordable energy.
average, between now and 2030.8 This can be split into about $45 billion
per year for generation capacity and $25 billion for transmission and
distribution. Renewables could account for two-thirds of the total
investments in generation capacity, or up to $32 billion per year.9 Realizing
this opportunity will create significant business opportunities in Africa.
In the power sector, the share of renewables could grow to 50 percent by
2030. In the same time period, hydropower and wind capacity could reach
100 GW each, followed by a solar capacity of over 90 GW.10
In order to unlock the region’s immense energy access potential,

governments and businesses need to address governance, institutional,
CÔ T E D ’ I V O I R E – E N E R G Y S U P P LY E F F I C I E N C Y
policy, and implementation challenges; different levels of financial market
In 2012, IFC helped finance an efficiency upgrade and
maturity; political instability; and an underdeveloped private sector. The
expansion of the Azito Thermal Power Plant, allowing it to
power sector’s financial viability will be enhanced if prices begin to reflect generate 50 percent more electricity for 2.3 million additional
the true cost of electricity. A range of financing tools is needed to attract customers without using any additional gas. This reduces
annual GHG emissions by over 270,000 tons. The plant's
private finance for new electrical capacity. Governments in the region can upgrade to combined-cycle technology makes it one of the
help by providing clear regulatory frameworks and using domestic or largest independent power producers in Sub-Saharan Africa.
IFC arranged a $350 million financing package with a group of
international public finance to guarantee risks.
other investors, including $125 million from its own account.
Sub-Saharan Africa Climate-Smart Investment Potential 61

CÔTE D’IVOIRE
Côte d’Ivoire’s estimated for West Africa by attracting private investors through a
$49 billion 2016–2020 National Development Program.
climate-smart investment The main drivers of this sustained growth are expected
to be public and private investments in infrastructure,
potential for select sectors is including an extension of Abidjan’s port, construction,
and natural resource extraction.11
$10 billion from 2016-2030.
The government and private industry have also
In its NDC, the Ivorian Government pledges to reduce made investments in agriculture and agricultural
greenhouse-gas emissions by 28 percent from business- product value-added processing.12 Côte d’Ivoire is a
as-usual levels by 2030. Côte d’Ivoire’s NDC outlines major producer of some of the world’s most desired
mitigation actions in the power, transport, waste and agricultural products – cocoa, coffee, and sugar. The
agriculture sectors. The country currently has very little potential for private sector investments in climate-
renewable energy capacity beyond large hydro, but has smart agriculture projects – particularly as they relate
set targets to incorporate 20 percent of renewables into to corporate supply chains – is huge. This will require a
its total energy mix by 2030. government focus on land and water management and
Following an election in October 2015, the country is production capacity improvements. The country’s NDC
focusing intently on economic growth. The government estimates that the cost of adaptation (which includes
is keen to consolidate its place as an economic engine agriculture and forestry) will be about $1.75 billion.
C ÔT E D ’ I VO I R E
N E A R - T E R M C L I M AT E - S M A R T I N V E S T M E N T P O T E N T I A L B Y 2 0 2 0 I N D I C AT O R S ( 2 0 1 5 )
Côte d’Ivoire indicators (2015)

 Renewable energy Urban infrastructure Population: 22.7 million
Power generation in Côte d'Ivoire is currently based on natural High population growth, strong momentum in income growth, and GDP: $31.7 billion
gas (70 percent) and large hydropower (30 percent). The demand for higher living standards in Côte d’Ivoire present major GDP growth: 8.4%
country has good solar potential in the North, but costs remain investment opportunities for building upgrades, transport, and waste Inflation: 1.2%
difficult to overcome compared to current grid alternatives. management. The investment potential up to 2030 for constructing
Ease of Doing Business rank: 142
Where solar installations do exist, they’re either dispersed in new green buildings in Côte d’Ivoire amounts to $6 billion.
S&P credit rating: n/a
isolated villages or being used by industrial or wealthy energy
Côte d’Ivoire’s NDC also highlights policy priorities for transport, FDI, net inflows: $0.43 billion
consumers.13 Despite renewables’ lack of penetration in the
including upgrading and expanding public transportation
country to date, the government’s priority to provide universal GHG emissions rank: 108 (2012)
infrastructure, improving the efficiency of freight transportation
access to electricity means the sector is well-placed for growth. Renewable energy capacity: 604 MW
(railways, construction of specialized terminals and freight corridors,
Furthermore, given the country’s position as a major producer Renewable energy capacity: 185.9 MW,
and information systems), and using more biofuels in the production
of agricultural products, strong opportunities exist for biomass 2.2% of installed capacity of 1.7 GW
of gasoline.14 To reach these low-carbon transport goals, it will be
energy projects that can take advantage of sector feedstocks. IFC Total clean energy investments 2009–
necessary to support the country as it plans to design and implement
estimates the investment potential for renewable energy in 2014: $69.9 million
transport policies, specifically in urban areas. IFC estimates the
Côte d'Ivoire is $1 billion through 2020.
current investment potential in transport at $300 million.
Buildings
$600M Côte d’Ivoire’s
• 28% emissions reduction compared to
smart investment
potential in urban business as usual by 2030.
infrastructure by
• 42% of electricity mix from renewable
2020
energies by 2030.
$1B Transport
$300M • 32% of electricity mix from natural gas
combined-cycle plants by 2030.
 Priorities for Côte d’Ivoire to attract Waste
• 15% of renewable energy in the supply
$100M
more climate-smart investment mix by 2020 and 20% by 2030.
• 42% of electricity mix from renewable

MODERNIZE THE ELECTRICITY L E V E L T H E P L AY I N G F I E L D F O R C R E AT E T H E F I N A N C I A L energy by 2030.
GRID TO MAXIMIZE RENEWABLE CLEAN ENERGY INFRASTRUCTURE
POTENTIAL
The government is considering putting Strengthen domestic financial markets, the I F C C L I M AT E B U S I N E S S
The ongoing expansion in power a price on carbon emissions to generate banking system and attract more foreign (FY2010 – 2016)
generation capacity should be matched revenues; this is a good step as it will investment.
with investment in transmission and help to make renewables and energy
distribution infrastructure to unlock Total climate finance: $280 million
efficiency more attractive when
much greater investment in renewables. compared to traditional alternatives. • Energy efficiency: $280 million
Implement the new electricity law and
open competitive markets, and explore
incentives to catalyze more renewable
energy development. Also work to reduce
electricity losses in the distribution system.
GLOBAL THEME Climate Adaptation
IFC Project Examples
Adaptation and the

private sector R O YA R E N O VAT I O N, N I C A R A G U A :
CO F F E E P L A N TAT I O N S T H AT A R E
C L I M AT E-R E S I L I E N T
Coffee plantations in Nicaragua are increasingly
being affected by coffee rust (a fungus that kills
coffee plants), which is proliferating with increasing
temperatures and changing precipitation patterns. To
Climate change impacts on natural resources, Investors have made significant investments in sectors address this, IFC is providing $12 million for replanting
with rust-resilient coffee varieties. Most Central
infrastructure, and society are already creating demand and resources that will be significantly affected by
American coffee plantations are, or will increasingly
for climate-smart products and services. Although climate change, such as agribusiness. The water sector be, affected by coffee rust. A similar model can be
companies are responding, more work needs to be done is a particular focus of the private sector, specifically used for other crops, such as cocoa and tea.
to make the private sector an active partner in helping developing technologies that provide or recycle water,
countries to build resilience and adapt to climate change. or use water more efficiently. The private sector also
To date, discussions on adaptation have had little delivers a growing number of adaptation services,
engagement with the business community, and instead such as weather observation technology and early
have focused on what governments need to do. warning systems. Companies are pursuing innovations
such as placing low-cost weather observation systems
Globally, it is estimated that tens of billions of dollars
on cellphone towers, at a fraction of the cost of
need to be invested in adaptation. The UNFCCC
radar systems, with better performance. Companies M O D E R N K A RT O N, T U R K E Y : C L E A N E R
estimates that between $28 billion and $67 billion
that offer farmers highly targeted weather and soil P R O D U C T I O N L E N D I N G F O R PA P E R
in additional investment for adaptation is needed for PRODUCTS
information, meanwhile, can help improve yields and
developing countries alone.15 Engaging the private sector Groundwater levels are diminishing in Turkey
reduce vulnerability to climate change. For example, due to decreasing precipitation – a trend that is
is essential for several reasons. It can mobilize financial
the Climate Corporation, a subsidiary of Monsanto, is projected to continue. Modern Karton, a producer
resources and technical capabilities, leverage the efforts of cardboard, relies mainly on groundwater for
developing a network of in-field sensors to expand the
of governments, engage civil society and community its paper production. To make the company’s
scope of farming data available on its digital agriculture facility more resilient, IFC is providing $8 million
efforts, and develop innovative climate services and
platform. It will also expand its software infrastructure for reverse osmosis water recycling equipment,
adaptation technologies. In addition, private businesses which decreases the company’s dependence on
to allow third-party developers to build farm data tools groundwater. There is large potential for replication,
dominate many investments that are vulnerable
for its platform. as many water-intense industries are located in
to climate change impacts, such as infrastructure areas with diminishing water resources, particularly
investments. those with limited groundwater supplies.

There is, however, little information about current winter putting financial strain on the Lebanese tourism of companies, for example, by offering a financial
demand for adaptation investments by the private sector sector, which traditionally generates 10 percent of the premium to companies that pro-actively address climate
at regional or sectoral levels, especially short-term country’s GDP; droughts in southeast Brazil signaling adaptation.
investments addressing adaptation needs that produce a drop in coffee and soybean production, which will
Governments play a key role in making businesses
rates of return above a certain threshold. One of the reach 10 percent and 20 percent respectively by 2020;
more aware of climate risks and boosting private
few studies that provides this information is the IFC/ and coffee rust disease, which is hurting coffee yields
sector engagement through stronger public-private
European Bank for Reconstruction and Development in Central America. Fortunately, the private sector is
partnerships. It is particularly important for the public
Adaptation Market Study in Turkey, which identified beginning to respond (see case study on left).
sector to create an enabling environment for private
$20 billion is private adaptation investments in key
To ensure that businesses integrate adaptation into their sector adaptation through policy and regulation.17
sectors.16
strategies and investments, incentives from government
Recent and projected impacts and risks for businesses and other sectors are needed. The financial sector can
indicate the diversity of impacts and need for adaptation help by recognizing the relevance of climate risk as a
initiatives and investments. These include a snow-free factor when it evaluates the expected future performance

KENYA
Kenya’s estimated climate-smart years; however, significant investment in infrastructure
is needed. In 2013, Kenya passed the Private Public
investment potential in selected Partnership Act to help address this, in part by enabling
public-private partnerships.18
sectors is $81 billion from Kenya plans to make clean energy a significant part
2016–2030. of its ambitious Least Cost Power Development Plan
2013–2033, which aims to have 50 percent of a total of
Kenya’s NDC pledges to reduce greenhouse-gas 22.7 GW of capacity coming from renewables by 2033.19
emissions by 30 percent from business-as-usual levels Progress on similar renewable energy targets has been
by 2030. It details mitigation and adaptation activities, slow and difficult to achieve, yet the country continues
including priorities for increased use of renewables, to persevere. In late 2015, Kenya established a 20-year
options for clean transportation, and achieving 10 fixed tariff for most renewable project types, alongside
percent tree cover. a standardized power-purchase agreement to help spur
In 2016, Kenya was the third most improved country momentum in the sector.20 The tariff, together with the
in the World Bank’s Doing Business rankings, moving country’s aggressive renewable energy targets, its stable
21 places to 108 out of the 189 economies reviewed. policy framework, and a suite of tax incentives for
Kenya’s GDP is projected to increase in the coming investors, can help realize Kenya’s climate ambitions.
K E N YA I N D I C AT O R S

Kenya’s electrification rate rose from 26 percent in 2012 to 47 Kenya’s national development program, Vision 2030, establishes a goal GDP growth: 5.6%
percent in mid-2015, and clean energy (excluding large hydro) for the country to reach upper middle-income status by 2030. Kenya Inflation: 6.6%
accounted for 46 percent of total generation in 2015 – with is, however, still a rural country, with the majority of poor people Ease of Doing Business rank: 108
geothermal accounting for 27 percent of installed capacity.21 living in remote areas. The benefits of urbanization have not yet been
S&P credit rating: B+
Geothermal will continue to serve as a major source of energy fully captured in Kenya to help it meet its 2030 target.22 Given Kenya’s
for Kenya. By 2020, geothermal will be a $7 billion opportunity. ambition to urbanize, IFC estimates that the climate-smart investment
Wind energy over the next five years is a $2 billion opportunity potential for new green buildings in Kenya will be $1 billion by 2020. GHG emissions rank: 90 (2012)
and small hydro $1 billion. Kenya has excellent solar PV potential IFC estimates that the investment potential for airports, seaports, Installed power capacity: 2.2 GW
– off-grid solar PV currently serves 30 percent of Kenyans with no railways, rapid light rail, roads and overall transport efficiency by Renewable share: 32.8%
grid access – but uptake for the grid-tied solar has proven difficult, 2020 will be about $11 billion,23 while the waste sector will require Total clean energy generation: 2.8 TWh
and the government has prioritized other resources. Plummeting $40 million in investments.
Renewable energy capacity: 1.7 GW
global prices for solar may, however, help Kenya’s solar market
Buildings
take off.
$1B Kenya's climate-
smart investment
Small potential in urban
hydro infrastructure by 2020
Kenya's climate- • 30% greenhouse-gas reduction
$1B
smart investment $12B Transport compared to business as usual by 2030.
potential in
renewables by 2020 $11B • 10% of land area covered by trees by
2030.
$10B Wind
Waste
$2B • Reach 20 GW of power capacity by
$40M
2030, comprising 51% renewable
energy.
Geothermal
$7B • Reach 100% electrification by 2020.
 Priorities for Kenya to attract more • 5 GW new generation capacity built
climate-smart investment by end of 2016 (1.6 GW geothermal,
630 MW onshore wind, and 18 MW
IMPROVE THE AVAIL ABILITY OF LOCAL FINANCING
cogeneration).
Agriculture Raise awareness among local commercial banks and financial intermediaries
about renewable energy opportunities in grid-connected and off-grid markets.
Kenya’s agricultural sector is a major contributor to its economy. I F C C L I M AT E B U S I N E S S
Innovative climate-smart solutions are needed, such as the (FY2010 – 2016)
ENHANCE ENERGY ACCESS VIA RENEWABLE ENERGY
recently launched Kenya National Agricultural Insurance
Encourage competition, and innovative business and financing models by
Program. The program is a partnership between government and unbundling the power market, investing in transmission and distribution and
the private sector that compensates farmers and livestock owners updating renewable energy incentives and policies. Introduce net metering • Renewable energy: $19 million
when climate-related shocks, such as droughts and floods, impact to allow for more distributed generation and energy access with off-grid
production.24 Other private sector opportunities to enhance renewable power.
resilience include agricultural and livestock waste for energy

generation, improved crop productivity, water resource and more L O W C A R B O N T R A N S P O RT
use of sustainable fertilizers. Accelerate investments in roads, rapid light rail, improvements in airport
infrastructure efficiency, port development, and traffic management systems.
BOX
Scaling Solar: unlocking private

investment in large scale solar
Solar power has enormous potential as a quick-to-build • High perceived risk: Poor credit utility off-takers and • Fully developed templates of bankable project
electricity source in emerging markets, where needs are political risks increase the cost of capital, driving up documents that can eliminate negotiation and speed up
great. It is also increasingly affordable—the cost of solar tariffs. financing.
photovoltaic (PV) technology has fallen more than
Scaling Solar25 brings together a suite of World Bank • Competitive financing and insurance attached to
80 percent in the past six years—solar PV can now
Group services under a single umbrella aimed at creating the tender and available to all bidders, delivering
deliver power less expensively and with more long-term
viable low cost markets for solar power in each client competitive bidding and ensuring rapid financial close.
price certainty, than other sources of power including
country through competitive tendering. This “one
coal-fired, hydro etc. Still, many countries have struggled • Risk management and credit enhancement to lower
stop shop” program can make privately funded grid-
to develop utility-scale solar plants due to challenges financing costs and deliver power at lower tariffs.
connected solar projects operational at competitive
that include: By providing a comprehensive suite of documentation
tariffs within two years. When implemented across
• Institutional capacity: Many governments have limited multiple countries, the program will create a new and services, which can be tailored to the needs of
capacity to manage, structure and negotiate private regional market for solar investment. individual countries, the World Bank Group is enabling
power concessions. the standardization necessary to speed up the investment
The program offers a package of support to government,
process. In contrast to the feed-in tariff schemes
• Lack of scale: Navigating small and distinct power utilities, project developers, and investors to realize the
currently being used in some countries, Scaling Solar is
markets can deter investors and small grids can only investments at the desired scale in a short time frame,
a competitive process intended to create markets and
absorb small projects. including:
drive down costs. Bidders will be offered a partial risk
• Lack of competition: Many power projects are not • Advice to assess the right size and location for solar guarantee as standard from the World Bank, and in
competitively tendered. PV power plants in a country’s grid. some cases political risk insurance from MIGA. IFC
will underwrite the financing of all qualifying bids,
• High transaction costs: Individually negotiated • Simple and rapid tendering to ensure strong
with bidders free to replace this lending with cheaper
contracts have high transaction costs. participation and competition from committed
alternatives if available.
industry players.

Zambia was the first country to sign onto the program. power to date in sub-Saharan Africa, and one of the capacity by 4 percent, but will make up for nearly 18
With IFC support, Zambia’s Industrial Development lowest solar tariffs globally (because the Zambia prices percent of the current power deficit resulting from
Corporation ran a tender in 2016 to quickly develop and are fixed for 25 years and will not rise with inflation, the droughts26, and will help to restore water levels in
install 100 megawatts of solar power through public- they are on par with recent record-breaking solar the country’s dams. The projects are slated to reach
private partnerships (PPPs) to diversify Zambia’s power auction tariffs in Mexico and Peru). This is expected to financial close in three months, with construction
generation which suffered from dependence on drought- be the first of several procurement rounds to deliver up completed a year later. This timeline will achieve Scaling
affected hydroelectric plants. This initially attracted to 600 MW over a short period of time, with the second Solar’s ambition to enable generation of cheap solar
48 developers from around the world, including EDF, round being currently underway. power within two years of engagement. Senegal and
Marubeni, Scatec, SolarReserve, Abengoa, Solar Capital, Madagascar have also signed up for the program, with
Scaling Solar has also delivered on its promise of
Shanghai Electric Power and Sun Edison. The winning other countries expected to join in the coming months.
speed: Zambia’s results come just 9 months after
bids were by Neoen S.A.S. and First Solar Inc. for 6.02
the government engaged the IFC to advise on the
cents per kilowatt hour and by Enel S.A. for 7.84 cents www.scalingsolar.org
transaction. Zambia’s two 50-megawatt solar power
per kilowatt hour – this represents the cheapest solar
plants will increase the country’s available generating

NIGERIA
Nigeria’s estimated climate- impediments to new flows of investment persist, such as
high energy costs, an inconsistent regulatory and legal
smart investment potential is environment, and corruption.27
over $104 billion from 2016– Power cuts are a common occurrence for the 58 percent
of the Nigerian population that has access to grid
2030 in selected sectors. electricity. Among the rural population, this drops to less
than 20 percent. The country's electrification target is 75
Nigeria’s NDC pledges to reduce greenhouse-gas percent by 2020 and 100 percent by 2030. Renewables
emissions by 20 percent from business-as-usual levels have not really begun to address these challenges – after
by 2030. The country’s priorities include improving the major power sector reform (including a feed-in tariff for
power system, increased use of renewables, enforcement renewable energy) and elections in 2015, Nigeria has yet
of energy efficiency and gas flaring controls, developing to deploy grid-scale renewable energy projects.28
power plants at gas flare sites, implementing climate-
Nigeria’s NDC outlines the investment needs for basic
smart agriculture, adopting green industrial technologies
infrastructure services across all economic sectors. Vast
and implementing transportation reforms.
sums of private finance are needed to help Nigeria meet
While Nigeria has the largest population and economy its development goals and transition to a low-carbon,
($568 billion) on the African continent, 46 percent of its climate-resilient country.29 Significant resources will need
citizens live below the poverty line. Nigeria’s economy to be used to implement adaptation programs, including
is highly dependent on fossil fuels as it is endowed with disaster management planning, water and power system
abundant oil and gas resources. Consistently strong GDP planning, river basin management, sustainable urban
growth over the past decade has developed a growing planning, and capacity building.
consumer class and attracted investor interest, but
N I G E R I A I N D I C AT O R S

Nigeria has embarked on ambitious electricity sector reforms to Nigeria has been rapidly urbanizing. Nigeria’s NDC highlights GDP growth: 2.7%
improve efficiency, attract private participation, and strengthen some policy priorities for cities, including upgrading and Inflation: 9%
power sector performance. Nigeria currently has a target for 40 expanding public transportation infrastructure, improving the Ease of Doing Business rank: 169
GW of installed power capacity by 2020, of which 10 percent efficiency of freight transportation (railways, construction of
S&P credit rating: B+
must come from renewable energy. New draft regulations specialized terminals and freight corridors, and information
(published in July 2015) introduce another renewable energy systems), and using more biofuels in the production of gasoline.
target of 2 GW by 2020.30 In addition, the country has It is expected that the Federal Ministry of Power, Works, and GHG emissions rank: 35 (2012)
committed to installing 13 GW of PV (scalable power plants of Housing will work with other line ministries to develop a plan to Renewable energy capacity: 1.9 GW
20 MW to 50 MW each), switching from liquid fuels to natural tap into climate-smart opportunities for cities. Total clean energy investments,
gas, and improving power generation efficiency by using gas- 2009–2014: $358.7 million
The investment potential up to 2020 for the upgrade of roads,
powered combined-cycle turbines. Installed power capacity: 10.7 GW
waste management and building infrastructure in Nigeria amounts
The development of renewable energy would help diversify the to $7 billion. Renewable share: 0.6%
country’s energy mix away from thermal sources, reduce the Buildings Total clean energy generation: 68.0 GWh
carbon footprint of power generation, and boost the reliability of $5B Nigeria’s climate-
smart investment
supply. However, renewable energy has not gained traction and potential in urban
there are currently no grid-connected plants other than the three infrastructure by 2020
large hydropower plants. A Renewable Energy Master Plan, $7B Transport
which was released in 2006 (and updated in 2011), identified $1B • 45% emissions reduction compared
considerable potential for renewable energy.31 to business as usual by 2030, 20% of
Waste which is unconditional.
$1B • 2% energy efficiency improvement per
Nigeria's climate- year by 2030.
smart investment
potential in • 40 GW (5%) of renewable and
renewables by 2020
 Priorities for Nigeria to attract more conventional power by 2020, which
$13B Off-grid includes 13 GW of PV, a mandate to
solar PV climate-smart investment blend 10% ethanol with gasoline and
$13B 20% biodiesel with diesel by 2020, and
TA P I N T O G A S A S A B R I D G E T O C L E A N E R E N E R G Y
end gas flaring by 2030.
Implement the Gas Master Plan to develop networks and markets and put in
place pricing strategies to incentivize cost-effective exploitation. • Achieve 75% national electrification
rate by 2020.
Agriculture BUILD CAPACITY FOR NEW POWER SYSTEMS
Ensure support services and skills are in place to implement and maintain
Nigeria still imports most of its food. The country’s NDC aims
new power systems, including assembly plants for equipment e.g. smart (FY2010 – 2016)
to use climate-smart agriculture to improve productivity while
meters and provision of equipment testing, calibration and logistics services.
reducing carbon dioxide equivalent emissions by 74 million tons
per year in 2030. This will be done by using agro-livestock waste
I N V E S T I N C L I M A T E - S M A R T A G R I C U LT U R E
for energy generation, increasing crop productivity, improving
Increase access to drought resistant crops and livestock feeds, adopt better soil
water resource and energy efficiency, extending rotation, and • Energy efficiency: $18 million
management practices, and improve weather forecast information. Develop
using more cover crops and sustainable fertilizers. better irrigation infrastructure and help increase efficient allocation of water. • Other mitigation: $1 million
SOUTH AFRICA
IFC estimates South Africa’s 2010, South Africa released its Integrated Resource Plan,
which outlines the country’s energy build-out strategy
climate-smart investment to 2030. Under the plan, the country seeks to increase
its power capacity from 43 GW to 89.5 GW, with
potential in selected sectors to renewables making up as much as 20 percent of the mix.
Wind (9.2 GW) and solar PV (8.4 GW) make up the
be more than $588 billion from largest portions of the renewables mix.
2016–2030. South Africa is developing a tradable carbon tax as a
policy mechanism, which when combined with electricity
South Africa’s NDC includes a “Peak, Plateau, and
price adjustments, is expected to help bring renewable
Decline trajectory” that caps emissions between 2025
technologies in line with the cost of existing generation
and 2030. Opportunities for climate-smart investment
sources. These policies, coupled with a government push
abound in South Africa as its economy relies heavily
to reach a 97 percent electrification rate by 2025, means
on mining and heavy industry. Furthermore, energy
that renewable technologies will play an increasing
consumption in the industrial and buildings sectors
role in the energy mix of the country.33 A demand-side
relies largely on electricity generated from fossil fuels
management scheme obliges the state power utility
(90 percent of South Africa’s electricity is from coal).32
Eskom to implement efficiency measures either directly
Additional emissions come from industrial-process
or through third parties.
emissions, especially steel and cement production. In
SOUTH AFRICA

 Renewable energy Urban infrastructure GDP: $313 billion
South Africa’s Renewable Energy IPP Procurement Program has A growing middle class has led to increasing urbanization and a GDP growth: 1.3%
approved 79 renewable energy independent power producer rise in demand for housing, infrastructure, and water resources. Inflation: 4.6%
projects, increasing investments in renewables to 5.2 GW, with There are major investment opportunities for smart mini-grid Ease of Doing Business rank: 73
private investment at about $16 billion (another 6.3 GW will systems, large-scale cogeneration and renewable energy projects, S&P credit rating: BBB-
follow).34 After more than four bid rounds, the cost of wind and new transport infrastructure (such as rail and electric vehicles), FDI, net inflows: $1.58 billion
solar technology has declined more than 70 percent and is now green buildings and waste management. The NDC estimates $1 GHG emissions rank: 22 (2012)
cost-competitive with new-build coal and gas. The REIPPPP trillion in investment potential in the electric and hybrid vehicle Renewable energy capacity: 1.3 GW
has procured 6.3 GW of renewables, with the majority under market by 2050 with close to 40% of this invested by 2030. Total clean energy investments: $16
construction or yet to be financed. South Africa is on track to Within the NDC plans, the country aims to integrate electric billion
reach its 2030 target under the Integrated Resource Plan. The vehicles into the government fleet, increase the number of efficient Installed power capacity: 44.9G W
NDC refers to $3 billion per year needed to implement the vehicles on the roads to 20 percent by 2030, and promote urban Renewable share: 4.5%
REIPPPP. mobility through a non-motorized transport network.35
Solar PV Total clean energy generation: 3.3 TWh
$2B
Solar thermal/ Buildings
concentrated
$3B $7B South Africa’s
solar power South Africa’s climate-smart
climate-smart investment • 17.8 GW new built renewable energy
investment potential potential in urban
capacity, 8.4 GW of which will be wind
in the power sector infrastructure by 2020
by 2020 $145B Transport power, by 2030.
$13.3B Wind $137B • Greenhouse-gas reductions of 34%
$8B below business-as-usual scenario by
Waste 2020, 42% by 2025.
Biomass $1B
• Decarbonization of electricity sector
$0.3B
by 2050.
• 20% hybrid electric vehicles by 2030.
• Carbon pricing and carbon budgeting

 Priorities for South Africa to attract for industry to limit emissions.
• Proposed mandate to blend up to 10%
ethanol with gasoline and 5% biodiesel
B E CO M E WAT E R-S M A RT L E V E L T H E P L AY I N G F I E L D F O R GO TO THE NEXT LEVEL ON with diesel from 2015.
CLEAN ENERGY RENEWABLES
The country’s water transmission
infrastructure is fragmented and is losing Move forward with the proposed Continue the successful REIPPPP, while removing
carbon tax, which will begin to level the barriers for selling distributed power back into the I F C C L I M AT E B U S I N E S S
significant amounts of water. This will
require improved management of the playing field between renewable energy grid – some cities are running pilot projects; these (FY2010 – 2016)
water sector, including better planning, resources and coal while also driving could be accelerated. Also address transmission
investment and incentives to recapture new energy efficiency opportunities – losses by improving the national power grid. There Total climate finance: $315 million
wastewater for reuse. particularly in heavy industry. has been a lack of investment that has contributed
to renewable energy project delays.

Transport: $22 million
Endnotes
1 Ernst & Young (2014), EY's attractiveness survey: Africa 2014, access at http://www.ey.com/Publication/vwLUAssets/ 18 United States Department of State (2016), “Kenya Investment Climate Statement 2016”, access at http://www.state.
EY-attractiveness-africa-2014/$FILE/EY-attractiveness-africa-2014.pdf gov/e/eb/rls/othr/ics/.
2 Niang, I. and O. C. Ruppel (2014), Africa, in: IPCC (2014) Climate Change 2014: Impacts, Adaptation, and Vulnerability, 19 BNEF (2016), Kenya Country Profile, Commentary Section
Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate 20 Ibid.
Change; access at https://ipcc-wg2.gov/AR5/images/uploads/IPCC_WG2AR5_SPM_Approved.pdf.
21 Ibid.
3 United Nations Conference on Trade and Development (UNCTAD) (2014), Economic Development in Africa:
22 World Bank (2016), Republic of Kenya: Kenya Urbanization Review, access at http://documents.worldbank.org/
Catalyzing Investment in Transformative Growth in Africa, access at http://unctad.org/en/PublicationsLibrary/
curated/en/639231468043512906/pdf/AUS8099-WP-P148360-PUBLIC-KE-Urbanization-ACS.pdf
aldcafrica2014_en.pdf.
23 Pricewaterhouse Coopers (2013), “Africa gearing up: future prospects in Africa for the transportation and logistics
4 See http://www.worldbank.org/en/region/afr/publication/africa-climate-business-plan-key-messages (May 10,
industry”, access at http://www.pwc.com/gx/en/transportation-logistics/publications/africa-infrastructure-
2016). Note that this is the investment needed to adapt to a 2°C warming; the figure could be as high as $20-50
investment/assets/africa-gearing-up.pdf Also see Kenya Ministry of State for Planning (2008) “A summary of
billion around mid-century in a higher warming scenario.
key investment opportunities in Kenya” accessed at http://www.kenyarep-jp.com/business/business_images/
5 United Nations, Department of Economic and Social Affairs, Population Division, 2015. World Population Prospects: SUMMARY%20OF%20KEY%20INVESTMENT%20OPPORTUNITIES%20IN%20KENYA.pdf
The 2015 Revision, Key Findings and Advance Tables. Working Paper No. ESA/P/WP.241.
24 World Bank (2015), “Climate-Smart Agriculture in Kenya”, access at http://sdwebx.worldbank.org/climateportal/doc/
6 Cameroon (54 percent), Cote d’Ivoire (59 percent), Gabon (60 percent), Ghana (72 percent), Namibia (60 percent), agricultureProfiles/CSA%20KENYA%20NOV%2018%202015.pdf
Senegal (57 percent), and South Africa (85 percent).
25 See http://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/industries/
7 World Energy Outlook 2014, pp. 165, www.worldenergyoutlook.org infrastructure/power/scaling+solar for more information.
8 International Renewable Energy Agency (IRENA) 2015, Africa Power Sector: Planning and Prospects for Renewable 26 Zambia has a power capacity of 2,500MW, mostly hydropower. But at present, severe drought means the
Energy, access at http://www.irena.org/documentdownloads/Publications/IRENA_Africa_Power_Sector_ hydropower is operating at a third of normal capacity, and there is a national power generation deficit of about
synethesis_2015.pdf. 560MW resulting in rolling 8-hour blackouts.
9 Ibid. 27 United States Department of State (2016), “Nigeria Investment Climate Statement 2016”, access at http://www.state.
10 Ibid. gov/e/eb/rls/othr/ics/.
11 United States Department of State (2016), “Cote d’Ivoire Investment Climate Statement 2016”, access at http://www. 28 BNEF (2016), Nigeria Country Profile, Commentary Section
state.gov/e/eb/rls/othr/ics/. 29 Federal Republic of Nigeria (2015), Nigeria’s Intended Nationally Determined Contribution, access at http://www4.
12 Ibid. unfccc.int/submissions/INDC/Published%20Documents/Nigeria/1/Approved%20Nigeria's%20INDC_271115.pdf
13 BNEF (2016), Cote d'Ivoire Country Profile, Commentary Section 30 BNEF (2015), Climatescope 2015, Nigeria, access at http://global-climatescope.org/en/country/nigeria/#/details
14 Netherlands-African Business Council (2014) “Factsheet Country Analysis Cote d’Ivoire”, access at https://www.nabc. 31 World Bank (2016), Independent Power Projects in Sub-Saharan Africa: Lessons from Five Key Countries, access at
nl/uploads/content/files/Factsheet%20C%C3%B4te%20d'Ivoire%20-%202014.pdf http://elibrary.worldbank.org/doi/pdf/10.1596/978-1-4648-0800-5
15 https://unfccc.int/press/fact_sheets/items/4982.php 32 BNEF (2016), South Africa Country Profile, Commentary Section
16 Download publication at http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/ 33 United States Department of Commerce (2016), 2016 Top Markets Report: Renewable Energy, access at http://trade.
cb_home/publications/publication_adaptationmarketstudy_turkey. gov/topmarkets/pdf/Renewable_Energy_Top_Markets_Report.pdf
17 IFC publication prepared for the G20 on the enabling environment for private sector adaptation, download at: 34 Republic of South Africa (2016), Department of Energy, Renewable Energy Independent Power Producer
http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/cb_home/publications/ Procurement Programme, access at http://www.ipprenewables.co.za/.
publication_enablingenvironmentadaptation_landing 35 South Africa Department of Transport (2016), National Transport Master Plan 2050, access at http://www.transport.
gov.za/IntegratedPlanning/NATMAP2050.aspx

Europe and Central Asia
Potential
75
O V E RV I E W Although countries in Europe and Central Asia contain abundant
human and natural resources, they are adjusting to the new reality
of subdued growth, capital outflows, declining energy prices, and
increasing geopolitical tensions. Development challenges still exist,
including inadequate access to finance, large infrastructure gaps,
Europe and Central lack of competitiveness, and weak investment climates. The region is
responsible for 10 percent of global greenhouse-gas emissions, but emits
Asia Climate-Smart
more greenhouse gas per unit of GDP than any other region. Outdated
industrial technologies cause energy wastage and unnecessary fossil
fuel use, leading to higher greenhouse-gas emissions. Climate change
Investment Potential impacts are already being felt in the agricultural sector, with production
decreasing in some areas; scarce water resources are also at risk.1 Russia
and Ukraine – both major greenhouse-gas emitters – have significant
untapped opportunity to improve energy efficiency. The private sector
Investment Spotlights can profit hugely from climate-smart investments in the region and
governments are eager to see investments flowing again.
Climate-Smart Investment Potential Improving energy and resource efficiency offers the best opportu-
2016 - 2030 ($ billion) nity for climate-smart investment
$700
$9 $665
$73
$600
$270
Despite the region’s challenges, climate-smart business is likely to
$500
grow in the region. Based on our analysis of the climate pledges
made by the four countries in Europe and Central Asia studied for
$400
this report – Russia, Serbia, Turkey, and Ukraine – our estimate for
the total investment potential for their climate-smart needs is $665
$313 billion by 2030. Well over half of this potential is for commercial
$300
investments in the construction of green buildings ($410 billion).
$200
Transport infrastructure needs measure approximately 12 percent of
total investment opportunity ($78 billion). In general, renewable energy
$100
investments in the region don’t track global trends of high growth—
with the exception of Turkey—but still amount to over $110 billion in
$-
investment opportunities through 2030.
RUSSIA TURKEY UKRAINE SERBIA TOTAL
Buildings Industrial EE Renewables Transport Waste

Climate Investment
Spotlights
Energy efficiency
Much of the region’s infrastructure – buildings, industry, power
TURKEY – GREENER CEMENT
generation, and transmission equipment – is old and inefficient.
In January 2014, IFC provided a $58 million financing
Investments in upgrades and resource efficiency thus have the potential
package to Cimko—one of Turkey’s major cement firms—
to be highly lucrative. Yet economic incentives that would encourage and a joint venture between Sanko Group in Turkey and
efficiency, such as cost-recovering energy and water prices, are largely Italy’s Cementerie Aldo Barbetti SPA. The project invests
in ready-mix concrete and energy efficiency, including
absent. Russia has by far the largest industrial energy efficiency waste-heat recovery. The project increases employment in
investment potential, estimated at $41 billion by 2030.2 the Southeast Anatolia region, gives Cimko sizeable energy
savings, and reduces greenhouse-gas emissions by over
63,000 tons per year.
Renewable energy
There is also significant investment potential in renewables (particularly,
solar and wind energy) and green buildings, particularly in countries
tackling unsustainably subsidized energy prices. Although there is
variability between countries, in general, rising energy demand, policy
support, and in some cases a good investment environment have resulted
in significant growth of the renewable energy and green building sectors,
which is expected to continue for the foreseeable future.3 For example,
$1.9 billion was invested in renewables in Turkey in 2015, a 46 percent
increase on the previous year. This included $941 million invested in
wind energy, as well as 2015’s largest asset financing for geothermal
C R O AT I A – W I N D P O W E R
power (the 170 MW-capacity Efeler geothermal plant).4 The country IFC joined forces with independent power producer RP
is on track to meet its target of 37 percent renewable energy share in Global and UniCredit Bank Australia to invest over €42 million
to build a 34.2 MW wind farm near Dubrovnik to expand
electricity generation by 2023, from a base of 27 percent in 2012.5 The
Croatia’s renewable energy production. The project will
Russian Federation, whose power mix remains predominantly coal supply clean power to thousands of homes and businesses,
and gas based, added 144 MW of new renewable energy capacity in reducing nearly 26,000 tons of greenhouse-gas emissions
each year.
2015. This includes a 25 MW solar PV plant that was connected to the
national grid in late December.6
Europe and Central Asia Climate-Smart Investment Potential 77

R U S S I A N F E D E R AT I O N
The Russian Federation’s annual primary energy consumption of France. This
wasted energy is the equivalent of $84 billion to $112
estimated climate-smart billion in lost export revenues and $3 billion to
$5 billion in federal and municipal spending on energy
investment potential in selected subsidies.7 If its energy efficiency potential were fully
realized, Russia’s carbon dioxide emissions in 2030
sectors is almost $313 billion would be about 20 percent below 1990 levels.8
from 2016–2030. To boost Russia’s weak economy, authorities are
pledging much-needed reforms to attract investors. In
Russia’s NDC pledges to reduce its emissions of net
addition, the ruble’s weakening by almost 50 percent
greenhouse-gas emissions by 25 percent to 30 percent
against the dollar is invigorating the market for
below the 1990 level by 2030. At more than 2.5 times
renewables as local content requirements – once seen as
the world average, Russia's high level of energy intensity
a barrier – are now helping to stimulate manufacturing
means the country loses more than 40 percent of the
growth and create jobs.9
energy it generates yearly, which is equivalent to the
R U S S I A N F E D E R AT I O N

Established in 2013, Russia’s renewable energy goals aim to have The Russian government’s macroeconomic crisis is partly due to the GDP growth: -3.7%
4.5 percent of electricity production from renewables and 5.9 GW economy’s dependency on revenue from oil and gas. Fortunately, Inflation: 15.5%
of installed capacity of renewables commissioned by 2020.10 Based investment in infrastructure projects can help create jobs and boost Ease of Doing Business rank: 51
on these goals — which are mirrored in the country's NDC — IFC the economy. For example, investment opportunities in green
estimates that Russia will attract nearly $9.3 billion for renewables by buildings in Russia is an estimated $17 billion over the next five
2020. Government targets for renewables will help drive commercial years. In transport, Russia has seen car ownership double since
investments in solar PV ($3 billion), small hydro ($2 billion), and 2000 and problems such as traffic congestion and air pollution GHG emissions rank: 5 (2012)
wind ($3 billion) by 2020. Although the potential for using biomass are common in the country’s larger metro areas.11 Although not Renewable energy capacity: 48 GW
to create power is much higher than either solar or wind, it will likely mentioned in its NDC, the Russian government has plans to
attract investment of only about $1 billion by 2020. address its transportation infrastructure, which is a conservative L O W C A R B O N TA R G E T S
investment opportunity estimate of $6 billion by 2020.12 Within the
Solar PV Small
Hydro national plan, the country emphasizes the formation of a unified • 6 GW of renewable capacity by 2020
$3B $2B
Russia's climate-
transport system, with national and regional connectivity of rail • 40% energy intensity reduction by
smart investment systems, and focusing on transport energy efficiency, improving 2020
potential in
renewables by 2020
transport logistics, and increasing the availability of urban transport • Limit emissions between 70% and 75%
systems generally.13 of 1990 levels by 2030
Geothermal $9.3B Wind
$0.3B $3B
Waste
Biomass $2B
(FY2010 – 2016)
$1B
New green Buildings
build $17B Russia’s climate- Total climate finance: $329 million
smart investment
 Industrial Energy efficiency potential in urban
infrastructure by
2020
Russia has the largest industrial energy-efficiency investment
$47B Transport
potential in the ECA region, valued at $14 billion for selected $6B
sectors by 2020. Across all sectors, the annual energy cost
savings for investors and end users could be worth $80 billion.14 EE retrofits Buildings
$22B
 Priorities for Russia to attract more

EXPAND COMPETITION FOR PRIORITIZE RENEWABLE ENGAGE CUSTOMERS TO
C L I M AT E-S M A RT S O L U T I O N S ENERGY DEVELOPMENT A CC E L E R AT E E N E R G Y E F F I C I E N C Y
Eliminate cross subsidies in energy and Simplify procedures and provide subsidies Introduce public environmental awareness
utilities sectors; increase transparency and for solar panel installation by network programs and measures that stimulate
competition in energy, gas and heat supply connected individual energy consumers individual behavioral change, including
markets. to increase use. property tax benefits for higher energy
efficiency buildings and other mechanisms.
SERBIA
Serbia’s estimated climate- implementation plan in 2017, Serbia’s NDC does outline
mitigation opportunities for priority sectors such as
smart investment potential increased energy efficiency and use of renewables.
for selected sectors is almost Serbia’s government approved new legislation in June
2016 that supports the renewables sector. Serbia has
$9 billion from 2016–2030, good wind potential and the government plans to add
onshore wind capacity – the country’s first wind farm
the bulk of which is from new was built in 2015 – but has a 500 MW capacity cap in
place up to 2019.15
construction of green buildings
The Serbian government’s top priority is economic
($6 billion) and renewable growth and the country has made progress on improving
the environment for investors and businesses. Looking
energy ($3 billion). westward, the government is aligning its domestic
legislation and standards with those of the EU as it is
Serbia has committed to reduce its 1990 greenhouse-
a candidate country for membership, while eastward
gas emissions levels by 9.8 percent by 2030. Although
the government has strong economic ties with Russia,
it plans to finalize its climate change strategy and NDC
Turkey, and others.16
S E R B I A I N D I C AT O R S

IFC estimates that Serbia will attract $1.3 billion for renewables An estimated $1 billion will be invested in the construction of GDP growth: 0.7%
as government targets help to drive commercial investments in new green buildings in Serbia by 2020. Investment calculations Inflation: 1.4%
wind energy ($1 billion) and small hydropower ($300 million) for the industrial energy efficiency and transport sectors were not Ease of Doing Business rank: 59
by 2020. completed for this report. National transport plans emphasize port
development through the modernization of the national fleet, and a
growth rate of volume of transport on inland waterways including
1,364 passenger ships in Belgrade by 2025. The waste sector GHG emissions rank: 77 (2012)
Small
hydro presents an investment opportunity of $22 million to 2020. Renewable energy capacity: 3.3 GW
Serbia’s climate-
$0.3B
smart investment
potential in the
power sector by
Waste L O W C A R B O N TA R G E T S
$22M Serbia's climate-
2020 smart investment
$1.3B Wind
potential in urban • 27% renewable energy in final energy
$1B infrastructure by consumption by 2020.
2020
$1B Buildings • 36.6% renewable energy in electricity
$1B sector, 30% in heating/cooling sector,
10% in transport sector by 2020.
• 20% improvement in energy efficiency

by 2020.
 Priorities for Serbia to attract more

climate-smart investment I F C C L I M AT E B U S I N E S S
(FY2010 – 2016)
INVEST IN GOVERNMENT PRIORITIZE KEY PROMISING ADVANCE LOW-CARBON
CAPACITY SECTORS POLICIES Total climate finance: $5 million
Introduce cost recovery tariffs, strengthen Enable financing of investments in water Establish market-friendly policy • Renewable energy: $3.5 million
regulators’ capacity, commercialize and and waste management, district heating frameworks and regulations to promote
• Other mitigation: $1.5 million
restructure public utilities, to increase and urban transport in medium-size energy efficiency and low-carbon
private sector participation in modernizing cities, mindful of national and municipal investments in compliance with EU Climate finance, selected NDC sector:
electricity generation capacity. level fiscal constraints. environmental standards. Agribusiness & forestry: $2 million
TURKEY
Turkey’s estimated climate- Based on its NDC, however, Turkey’s climate ambitions
appear to decrease after 2023. Perhaps due to concerns
smart investment potential for of oversupply, the country’s wind target from the
National Renewable Energy Action Plan has been
selected sectors is $270 billion reduced in its NDC from 20 GW in 2023 to 16 GW
in 2030, while the solar energy target only doubles to
from 2016–2030. reach 10 GW in 2030. Neither of these targets reflect the
Turkey’s NDC establishes a target of up to 21 percent country’s technical potential for renewables.18
below business-as usual-levels by 2030. If Turkey’s NDC Turkey’s population has expanded by 30 percent
targets are met, the country’s energy mix will be 30 since 1990 and the rate of energy demand is expected
percent renewable. This will require huge investments to continue increasing at about 5.7 percent yearly.19
in the clean energy sector, including wind, solar, Supported by relatively high power prices and national
hydropower, biomass, and geothermal energy.17 policy frameworks, energy efficiency is a priority for the
Although the country has recently faced significant Turkish government, which established a target in 2012
political and social hurdles – including terrorist attacks to reduce energy intensity by 20 percent by 2023.20
and caution from investors – Turkey’s GDP growth in

2015 (4 percent) outpaced most G20 countries. This
indicates continued investor interest in Turkey.
T U R K E Y I N D I C AT O R S

Turkey is a net importer of fossil fuels and its target to Turkey has rapidly industrialized and urbanized over the past 30 years. About GDP growth: 4%
meet 30 percent of its energy supply from renewables 72 percent of Turkey’s population lives in urban areas and by 2030 this Inflation: 7.7%
is essential for improving its energy security. Turkey number is expected to surpass 80 percent.21 Based on this expected growth, Ease of Doing Business rank: 73
has a robust market for clean energy and IFC estimates IFC estimates that $19 billion in commercial investments will be made in new
the country will attract an additional $27 billion for green buildings by 2020. Buildings FDI, net inflows: $16.8 billion
renewables by 2020. The country’s clean energy targets $19B Turkey’s climate-
Large investments in public smart investment GHG emissions rank: 23 (2012)
will help drive commercial investments in wind ($16
transport are also taking place potential in urban
billion), solar PV ($7 billion), and geothermal ($3 billion) infrastructure by Renewable energy capacity: 29.3 GW
in the country’s larger, traffic- 2020
energy by 2020. Turkey also has good conditions for
congested cities. For example, $27B Transport
small hydropower, but only $1 billion of investment $7B L O W C A R B O N TA R G E T S
Istanbul has an approved
potential is expected by 2020.
investment program for metro
Waste • 37.57% share of renewable energy in
expansion of more than $2
$1B power generation by 2023.
Solar PV
billion. Although there are
$7B • Add 20 GW of wind power by 2023.
many opportunities for low-carbon transportation investment in Turkey
Small (for example, seaports, airports, and light rail), comprehensive estimates are • Add 5 GW of solar installations by 2023.
hydro
Turkey’s climate- difficult to make. As such, IFC’s estimate of $7 billion by 2020 covers only • Add geothermal capacity of 600 MW
$1B
smart investment a small portion of the expected overall total. Existing low-carbon transport by 2023.
potential in the
power sector by plans emphasize developing implementation plans for sustainable transport
2020 systems in urban areas, promoting the use of alternative fuels and electric I F C C L I M AT E B U S I N E S S
$27B Wind
$16B vehicles and completing existing high-speed railways projects. The waste (FY2010 – 2016)
sector also presents an investment opportunity of $1 billion by 2020.
Geothermal Total climate finance: $1.6 billion
$3B
 Priorities for Turkey to attract more
REALIZE STRONG GREEN BUILDINGS POTENTIAL
 Industrial Energy Efficiency • Adaptation: $8 million
Stronger building regulations and incentives are needed to drive more Climate finance, selected NDC sector:
Turkey has a number of energy efficiency laws and energy efficiency investment in new and existing buildings.
• Agribusiness & forestry: $58 million
incentives to help drive private sector investment in
industrial energy efficiency improvements. Under U S E M O R E P U B L I C- P R I V A T E P A R T N E R S H I P S • Waste: $37 million
the national Energy Efficiency Law in Turkey if Support development of more efficient and sustainable urban infrastructure
manufacturers commit over a three-year period to reduce through promotion of municipal PPPs, and greater resources devoted to urban
their energy intensity by an average of 10 percent, the planning and project development.
government will subsidize 20 percent of their energy
TA K E A N I N T E G R AT E D P O L I C Y A P P RO A C H TO C L I M AT E C H A N G E
costs during the first year. The climate-smart investment
potential for industrial energy efficiency measures in Prioritize short-term actions in updated National Climate Change Action Plan
to 2030, including air pollution and adaptation measures, and integrate with
Turkey is $3 billion by 2020.
long-term goals to ensure cost-effective mitigation policies.
UKRAINE
Ukraine’s estimated climate- typically less than two years, and internal rates of return
can be over 50 percent for such projects.23
smart investment potential for Ukraine has an abundance of natural resources due to its
selected sectors is $73 billion size, and the investment potential for power generation
from renewables like biomass, solar PV, and wind energy
from 2016–2030. is considerable. Unfortunately, the country faces a
complex geopolitical situation (for example, much of the
Ukraine’s NDC includes a greenhouse-gas target to Ukraine’s wind potential is in the Crimea), which hinders
reduce emissions by 60 percent by 2030 from 1990 the expansion of its renewables sector.24
levels. Ukraine’s economy is the world’s fifth most
Although Ukraine faces several economic and
energy-intensive in the world,22 and energy efficiency
bureaucratic problems, in 2016 the country climbed 13
is a major opportunity for low-carbon investments
spots in the World Bank’s Doing Business rankings to
across multiple sectors. Over two-thirds of the country’s
83 out of 189 countries. There are also many investment
infrastructure is outdated due to a lack of modernization
opportunities to help the country meet its new climate
since the Soviet era, and energy efficiency measures are
commitments, including renewable energy, energy
financially attractive. For example, the payback time
efficiency and climate-smart agriculture.
of changing an inefficient boiler to an efficient one is
T U R K E Y I N D I C AT O R S

Ukraine adopted a National Renewable Energy Action Plan IFC estimates that $3 billion will be invested in green buildings by GDP growth: -9.9%
in October 2014, which sets a target to increase the share of 2020. Data availability to assess the opportunities for low-carbon Inflation: 48.7%
renewables in its final energy consumption to 11 percent by transportation investments in Ukraine are scarce but IFC estimates Ease of Doing Business rank: 83
2020.25 Renewable energy development in Ukraine is expected to a $10 billion investment opportunity for this sector. Existing
continue, albeit at a slower pace. Renewable energy capacity is national priorities in transport emphasize improving the investment
likely to reach 1.8 GW for onshore wind and 1.3 GW for solar climate in this sector by increasing standards and regulations,
GHG emissions rank: 26 (2012)
PV by 2020. IFC estimates that Ukraine will attract $4.2 billion enhancing public governance efficiency, refurbishing railways
for renewables by 2020. infrastructure facilities, and renewing the transport fleet. Renewable energy capacity: 6.2 GW
Buildings L O W C A R B O N TA R G E T S
$3B Ukraine's climate-
smart investment
• 11% of energy consumption to come
potential in urban
Solar PV infrastructure by from renewable sources by 2020
$1B 2020
$13B Transport
Small $10B
hydro
Ukraine’s climate-
$0.2B
smart investment (FY2010 – 2016)
potential in the
power sector by
2020 Total climate finance: $28 million
$4.2B Wind
$2B  Priorities for Ukraine to attract more
climate-smart investment • Energy efficiency: $19 million
Biomass
$1B
TA P I N T O S I G N I F I C A N T E N E R G Y E F F I C I E N C Y Climate finance, selected NDC sector:
POTENTIAL
• Agribusiness & forestry: $14 million
Promote investments in supply-side energy efficiency through
electricity tariff reforms, increasing transparency, and further
expanding consumer-level metering.
 Energy Efficiency INVEST IN GOVERNMENT CAPACITY

Ukraine has a strong industrial sector. The steep increase in Improve governance, transparency, implementation of price
natural gas prices in Ukraine has put pressure on energy-intensive regulations and accountability and controls to in the energy sector to
sectors, such as cement and steel production, which are quite attract foreign and domestic investment.
sensitive to price fluctuations. Due to the high level of energy

intensity and the presence of outdated technologies, Ukraine’s E S TA B L I S H A N E N E R G Y E F F I C I E N T E CO N O M Y V I S I O N
potential for industrial energy efficiency measures is significant; it Intensify measures for maximizing economy-wide energy
is estimated to be $2 billion by 2020. efficiency gains potential, focusing on demand-side management –
encouraging reduction of energy use in the residential housing and
transport sectors.
GLOBAL THEME
Public-private partnerships for

climate investment
Well-structured public-private partnerships can help Many of the major cities in India have old and Similarly in solar power, IFC has helped develop a
governments tap into the expertise and efficiency of inefficient street lighting, which is costly and poses market for off-grid, small-scale rooftop solar projects in
the private sector, raise capital, access innovative new serious safety and security risks. In Jaipur, the numerous states in India27, as well as a grid-connected,
technologies, and spur development. They also help municipality operates and maintains over 100,000 utility-scale solar project in Africa through the Scaling
allocate risk across the public and private sectors to public street lights. The old technology was costly Solar program. Zambia was the first country to sign up
where it can best be managed and facilitate climate- to maintain. To address this, IFC helped structure for the program. Within nine months, the government
related investment. a public-private partnership to retrofit the public held the first auctions and received financial bids from
street lights26 with energy-efficient LED lights and seven leading renewable energy developers. The results
Transitioning to a low-carbon energy sector could
to operate and maintain the network. Thanks to set a new benchmark for solar power tariffs in Africa28
benefit the nearly one in five people worldwide without
the partnership, the network is run through a fully and are among the lowest prices seen to date globally.
access to modern energy services. Greater reliance on
computerized centralized control and monitoring When implemented across multiple countries, the
hydro, wind, solar, biomass, and geothermal sources, as
system. The partnership mobilized $12 million in program could help develop a new regional market for
well as more efficient energy use, could help create jobs
private investment. The new street lights will reduce solar investment.
and foster sustainable growth. The private sector is key
greenhouse-gas emissions by 36,750 metric tons per
to making this happen.
year; provide fiscal savings of $1 million per year to the
Areas where IFC has seen a sharp rise in government city; and improve street lighting for over 1.6 million
interest in public-private partnerships include waste- people. IFC has supported other street lighting projects
to-energy; grid-connected and off-grid solar power; in India and is helping other municipalities in Latin
and high-performance, energy-efficient municipal America and the Caribbean.
street lighting.

Europe and Central Asia Climate-Smart Investment Potential 87
Endnotes
1 Human Development Report Office, 2008, Central Asia: Background Paper on Climate Change, access at http://hdr.
undp.org/sites/default/files/perelet_renat.pdf.
2 IFC (2013), Climate-Smart Business: Investment Potential in EMENA, access at http://www.ifc.org/wps/wcm/
connect/topics_ext_content/ifc_external_corporate_site/cb_home/publications/feature_emena_jan2013.
3 Ibid.
4 BNEF (2016), Global Trends in Renewable Energy Investment, access at http://fs-unep-centre.org/sites/default/files/
publications/globaltrendsinrenewableenergyinvestment2016lowres_0.pdf.
5 BNEF (2016), Turkey Country Profile, Commentary Section. The 37 percent target includes large hydropower.
6 BNEF (2016), Russia Country Profile, Commentary Section.
7 IFC (2014), Energy Efficiency in Russia: Untapped Reserves, access at http://www.ifc.org/wps/wcm/connect/
de1e58804aababd79797d79e0dc67fc6/IFC+EE+in+Russia+Untapped+Potential.pdf?MOD=AJPERES.
8 Ibid.
9 Bloomberg News (2016), Russian Ruble’s Slide Seen Giving Space for Renewable Energy.
10 REN21 (2015), UNECE Renewable Energy Status Report, access at http://www.ren21.net/status-of-renewables/
regional-status-reports/
11 OECD (2015), Improving Transport Infrastructure in Russia, access at http://www.oecd.org/officialdocuments/
publicdisplaydocumentpdf/?cote=ECO/WKP(2015)11&docLanguage=En
12 Ernst & Young (2014), The Road to 2030: A survey of infrastructure development in Russia, access at http://www.
ey.com/Publication/vwLUAssets/EY-russia-infrastructure-survey-2014-eng/$FILE/EY-russia-infrastructure-survey-
2014-eng.pdf
13 Government of Russia (2014), Approval of the new edition of the Transport Strategy of Russia until 2030, access at
http://xn--90aombffhjlk.xn--p1ai/11-07-2014/?lang=en
14 Lychuk T, Evans M, Halverson M, & Roshchanka V (2012), Analysis of the Russian Market for Building Energy
Efficiency, Pacific Northwest National Laboratory for the U.S. Department of Energy
15 BNEF (2016), Serbia Country Profile, Commentary Section
16 United States Department of State (2016), “Serbia Investment Climate Statement 2016”, access at http://www.state.
18 Climate Action Tracker (2015), Turkey, access at http://climateactiontracker.org/countries/turkey.html
19 Republic of Turkey (2015), Intended Nationally Determined Contribution, access at http://www4.unfccc.int/
submissions/INDC/Published%20Documents/Turkey/1/The_INDC_of_TURKEY_v.15.19.30.pdf
20 EDAM Centre for Economics and Foreign Policy Studies (2015), Opportunities for Improving Energy Efficiency in
Turkey, access at http://www.edam.org.tr/en/File?id=3176
21 World Bank (2015), Turkey Partnership: Country Program Snapshot, access at http://www.worldbank.org/content/
dam/Worldbank/document/eca/Turkey-Snapshot.pdf
22 The Shift Project Data Portal (2016), Most Energy Intensive Countries, access at: http://www.tsp-data-portal.org/
TOP-20-Energy-Intensity#tspQvChart
24 REN21 (2015), UNECE Renewable Energy Status Report, access at http://www.ren21.net/status-of-renewables/
regional-status-reports/
25 Ibid
26 http://www.ifc.org/wps/wcm/connect/33466ede-3d41-458d-ad8e-1145fbf4367b/PPPStories_India_
RajasthanStreetLighting.pdf?MOD=AJPERES
27 https://library.pppknowledgelab.org/documents/2408
28 http://ifcextapps.ifc.org/ifcext/pressroom/ifcpressroom.nsf/0/
E5F6A9E9D7C08B5A85257FD100651286?OpenDocument

Middle East and North
Africa Climate-Smart
89
O V E RV I E W Countries in the Middle East and North Africa (MENA) are highly
vulnerable to the impacts of climate change, which will only be
exacerbated by surging population growth and rapid urbanization.
These countries have high per capita emissions, but are interested in
expanding and diversifying their energy mix. Across the region, MENA
Middle East and North governments are adding flexibility to power markets, investing in
renewable energy, and boosting energy efficiency to meet demand and
Africa Climate-Smart
alleviate fiscal pressures stemming from heavily subsidized energy prices.
Several countries aim to become renewable energy development hubs,
leading to growing private sector interest – and investment – in the
Investment Potential region. Policies, including the redistribution of fossil fuel subsidies and
increased taxes on oil resources, can generate revenues to help MENA
countries expand their efforts to respond to climate change.
MENA countries are rapidly becoming renewable energy and
resource-efficient growth centers.
Climate-Smart Investment Potential Investment potential

2016 - 2030 ($ billion)
Based on our analysis of the climate pledges made by the three MENA
$300
countries studied for this report – Egypt, Jordan, and Morocco – our
estimate for the total climate-smart investment potential is $265
$23 $265 billion by 2030. One-third of this potential is for renewable energy
$250
$68 generation ($97 billion), while 64 percent ($169 billion) is for climate
smart buildings, transportation, industrial energy efficiency, electric
$200
transmission and distribution, and waste solutions. By 2030, the
$174 commercial investment potential in climate-smart urban transportation
$150 solutions is estimated at $50 billion, for new construction of green
buildings $92 billion, and for the waste sector $4 billion. Given the
$100 policy signals that are being sent by countries, opportunities for
investment in climate-smart agriculture projects across the MENA
region are strong, but investment estimates are not yet available.
$50
$-
Renewable energy
EGYPT MOROCCO JORDAN TOTAL While challenges to private investment do exist, the MENA renewables
Buildings Industrial EE Renewables Electric T&D Transport Waste

market is commercially attractive and investments are on the increase.
The region has vast opportunities for climate-smart investment in
the renewable sector that are beginning to be realized—investments Climate Investment
exceeded $45 billion in 2015.1 MENA’s renewables consist mainly
Spotlights
of solar ($29 billion) and wind ($12 billion) projects, but small
hydropower is also an area for growth. Indeed, new solar and wind
capacities are coming online all the time. Egypt, Jordan, and Morocco
have all expanded their installed wind capacity to 550 MW, 291 MW,
and 154 MW, respectively. Ever more independent power producers
feed renewable electricity into the grid at fixed tariffs, under quotas,
or through power purchase agreements. Energy markets, however, are
not truly open as transmission and distribution are controlled by the
public sector. In fact, Egypt, Jordan, and Morocco are the only countries
in the region that have privately owned distribution companies.2
Countries can help to unlock bank finance by creating a better enabling M O R O CCO – CO N C E N T R AT E D S O L A R P O W E R
environment for climate credit lines and other forms of sustainable One of the world’s largest solar plants, the Noor-Ouarzazate
energy finance. I project consists of a 160 MW concentrated solar parabolic
trough power plant with three-hour storage. The plant
provides clean electricity to the fossil fuel-dependent country.
An ongoing additional investment of more than $3 billion will
Resource efficiency increase the total capacity of the Noor-Ouarzazate complex
to 510 MW, bringing electricity to more than one million
The NDCs of many MENA countries highlighted low-energy and
Moroccan households by 2018. When complete, the complex
resource-efficient buildings. These buildings are now receiving will reduce dependence on oil by around 2.5 million tons,
considerable attention from regulators and project developers due to lowering greenhouse emissions by 760,000 tons.
attractive economic and commercial benefits. There is also increasing

interest in building renovation, as no-cost to low-cost upgrades can
reduce building energy consumption in the region by as much as
20 percent. Public-private partnerships show promise to provide an
improved water supply – but countries will need to establish regulatory
and institutional frameworks.

climate investment
Climate-smart business is growing in the MENA region. There is JORDAN – WIND POWER
significant investment potential in renewables, particularly solar and wind In 2013, IFC provided $221 million to the 117 MW Tafila wind
power, as well as in energy efficiency improvements and green buildings, farm, the first privately-financed wind farm in Jordan. This sets
the stage for a pipeline of additional wind and solar parks over
particularly in countries tackling subsidized energy prices. Although there
the next few years in order to help address the country's twin
is variability between countries, in general, rising energy demand, policy challenges of dependence on imported energy and high fossil
support, and in some cases a good investment environment have resulted fuel prices. The project provides power to the grid at 25 percent
below current wholesale electricity prices and reduces GHG
in significant growth of the renewable energy and green building sectors, emissions annually by over 177,000 tons.
which is expected to continue in the coming years.
Middle East and North Africa Climate-Smart Investment Potential 91
EGYPT
Egypt’s estimated climate-smart electric and industrial sectors. Egyptian energy subsidies
reached about $16 billion in 2012, representing more
investment potential is nearly than 20 percent of its national budget expenditure.3
$174 billion from 2016–2030. Egypt is expected to overtake South Africa in the next
decade to become the largest electricity market in Africa.
Although Egypt’s NDC does not include a formal The country has pledged to produce 20 percent of its
greenhouse-gas reduction target by 2030, it does outline electricity consumption from low-carbon sources by
a suite of greenhouse-gas mitigation and adaptation 2022, with 12 percent coming from wind.4
goals and policy measures. Despite being Africa’s largest Attracting investment – both foreign and domestic – is
non-OPEC oil producer (and the continent’s largest a priority for Egypt’s government. Despite pro-business
oil and gas consumer), renewable energy is attracting reforms, the investment climate remains challenging.
considerable interest. The government sees clean energy However, companies that have been able to navigate
as a way to secure and diversify its energy base while Egypt’s challenges and complexities have been rewarded
using its substantial natural resources. with significant returns on investment.5
Egypt has also taken some strides towards energy
subsidy reform, but significant subsidies still exist for the
E G Y P T I N D I C AT O R S ( 2 0 1 5 )
N E A R - T E R M C L I M AT E - S M A R T I N V E S T M E N T P O T E N T I A L B Y 2 0 2 0
GDP: $330.7 billion

 Renewable energy Urban infrastructure
GDP growth: 4.2%
Egypt’s renewable energy targets for 2020, along with the country’s Egypt’s NDC outlines several greenhouse-gas mitigation and Inflation: 10.4%
efforts to liberalize its power market and reduce some of the world’s adaptation activities that cover almost every sector of the urban
Ease of Doing Business rank: 126
largest price subsidies, will likely lead to considerable investments economy, including energy (power generation and efficient lighting);
in wind and solar in the near future. Egypt’s estimated investment transport (metro, railway, and inland waterways); and waste (solid
potential for wind power is $11 billion by 2020 and $5 billion waste and wastewater). IFC estimates that $7 billion will be FDI, net inflows: $6.9 billion
for solar projects. Egypt also has small hydro potential, but this invested in new low-carbon buildings by 2020. To reduce emissions GHG emissions rank: 36 (2012)
sector was not evaluated for this study. and improve urban transport and waste services, Egypt will need Renewable energy capacity: 3.6 GW
Solar thermal/
$11 billion for an array of transportation projects and $1 billion in
concentrated waste management by 2020. Low-carbon transport priorities for
solar power
$5B L O W C A R B O N TA R G E T S
Egypt’s climate-smart
the country include a shift in urban transport from single occupancy
in renewables by vehicles to public transport modes including railway, buses, • 20% of power generation from
2020
microbuses and river passes as well as improving road transport renewables by 2022
$16B Wind efficiency through a switch from road to rail and river transport.6 • 7.2 GW of wind power by 2022
$11B
• 2.8 GW of solar CSP by 2027
• 700 MW of PV by 2027
Buildings
$7B Egypt's climate-
 Industrial Energy efficiency smart investment
potential in urban
infrastructure by 2020 (FY2010 – 2016)
Industrial energy efficiency is a $500 million investment
opportunity in Egypt by 2020. Egypt’s energy-intensive sectors, $19B Transport
such as cement, iron and steel, chemicals, and fertilizer production,
are sensitive to price fluctuations of natural gas and electricity.
Waste
Due to outdated technologies, the investment potential for energy • Energy efficiency: $69 million
$1B
efficiency in the manufacturing industry is significant, especially • Other mitigation: $26 million
through the replacement and optimization of equipment.7 Climate finance, selected NDC sector:
Agribusiness & forestry: $26 million
 Priorities for South Africa to attract

A D D R E S S W AT E R S C A R C I T Y STRONGER PUSH FOR CLEAN GET THE PRICES RIGHT

ENERGY
Address water shortages by increasing Continue to phase out inefficient fossil fuel
water storage capacity, network upgrades While Egypt has made some progress, subsidies, which represent 20 percent of the
and developing new water resources, such more can be done to decarbonize the national budget—and consider introducing a
as waste water recycling and desalination, energy sector by improving energy carbon price to level the playing field between
improving water-use efficiency and efficiency and increasing the share of traditional fossil energy resources and
initiating water demand management. renewables in the electricity sector. renewables.
This will benefit resource efficiency and
more resilient agriculture.
GLOBAL THEME
Climate-smart agriculture
Agriculture, forestry, and land use are major drivers activities in the agribusiness value chain. At the Paris climate change impacts; and reduced greenhouse-gas
of climate change, accounting for about a quarter Conference of the Parties, 94 percent of all country emissions. IFC is supporting climate-smart agriculture,
of all global greenhouse-gas emissions. Most of NDCs included greenhouse-gas reduction targets and/ together with its clients and partners, by providing
these emissions come from livestock farming and or adaptation objectives for the agriculture, forestry, and investments and advice that contribute to one or
the expansion of agriculture into forested areas land use sectors . Increasingly, businesses are making
9
more of the three pillars of climate-smart agriculture.
(deforestation). This is not only an environmental issue commitments to ensure deforestation-free supply chains, Historically, IFC has mainly supported investments
but a development concern: emerging markets will be signing on to use 100 percent renewable energy, or in energy efficiency and clean energy solutions in the
the main source of projected growth in global food setting other objectives to reduce their greenhouse-gas agricultural sector; however, it has now expanded its
demand and trade at a time when farmers across the emissions and water footprint. A growing number of IFC focus areas to include the following:
globe are experiencing more droughts, floods, and heat clients are concerned that the impacts of climate change
• Helping animal protein producers to increase their
waves, which are increasing production variability and will disrupt their supply chains and their ability to grow
productivity (reduce greenhouse-gas emissions per
pushing already vulnerable populations into poverty. It in a sustainable and profitable manner. IFC is helping to
kilogram of meat or milk or hectare) through various
is also a business issue given that climate change under support its clients’ climate-related commitments. Clients
measures, including manure management.
a business-as-usual scenario is expected to reduce global are, for example, adopting technologies and practices
yields by as much as half by 20308. Global trends will that increase their productivity and resilience while • Leveraging agriculture input suppliers (for example,
exacerbate this scenario, including population growth, reducing their carbon footprint. soil testing, water solutions, appropriate use of
urbanization, the need to raise food production by fertilizers, and pest control) as a platform to promote
In September 2016, IFC revised its climate definitions
some 70 percent by 2050 from 2007 levels, as well as a precision farming technologies and financing to
to incorporate activities and investments that contribute
growing middle class that is demanding better quality increase the productivity and resilience of farmers.
to climate-smart agriculture. Climate-smart agriculture
food and more protein in their diets. • Helping producers and traders reduce post-harvest
is an approach to managing landscapes – cropland,
IFC has identified the following priorities: to contribute livestock, forests, and fisheries – that aims to achieve losses in the food value chain by, for example,
to global food security, to make environmental and three “wins”: increased productivity to improve food optimizing food transport logistics and developing
social sustainability a business driver, and to improve security and boost farmers’ incomes; improved resilience cold chain and storage infrastructure.
livelihoods through its investment and advisory to drought, pests, disease, and other shocks linked to

Middle East and North Africa Climate-Smart Investment Potential 95
JORDAN
Jordan’s estimated climate- As a major importer of fossil fuels, Jordan has also
focused on its transportation sector by pairing its push
smart investment potential is for more renewables with an effort to accelerate the
market for electric vehicles. The government signed
nearly $23 billion from 2016– letters of commitment in 2015 to build 3,000 solar-
powered electric charging stations over the next decade.
2030. Combined with Jordan’s tax and fee exemption for
Jordan’s NDC establishes a 1.5 percent greenhouse-gas electric vehicles, 5 to 10 percent of the country’s 1
reduction from 2006 levels compared to business as million-plus cars could be electrified within five to seven
usual by 2030. Jordan imports roughly 96 percent of its years.10
energy supply from a politically unstable region. Unlike Over the past 15 years, the government has engaged in
its neighbors, Jordan does not have a natural endowment wide-scale privatization, including in the energy and
of fossil fuels – this strengthens the case for efficient, transportation sectors, pointing to further opportunities
climate-smart energy and infrastructure projects. in Jordan for climate-smart infrastructure projects via
Jordan’s NDC also included a conditional target of an public-private partnerships.
additional 12.5 percent reduction in greenhouse-gas

emissions if approximately 70 sector-specific mitigation
projects worth $5.2 billion are implemented.
J O R D A N I N D I C AT O R S

Jordan aims to have renewables comprise 10 percent of its IFC estimates $500 million will be invested in new low-carbon GDP growth: 2.4%
energy mix by 2020.11 The number of renewable energy projects buildings by 2020, while about $2 billion will be invested Inflation: -0.9%
is expected to rapidly increase in the next few years, with a in the transportation sector (primarily railways) by 2020. Ease of Doing Business rank: 107
pipeline of at least 200 MW of solar projects to come online in National transport plans indicate the following priorities for
2016 and another 1 GW by 2020. In addition, Jordan brought transport: increasing the total number of commuters using public
its first utility-scale wind farm online in 2015 and is looking to transport to 25 percent by 2025, developing and implementing
add up to 600 MW of additional wind power in line with its a comprehensive transport strategy including a national bus GHG emissions rank: 115 (2012)
2020 target.12 Jordan’s estimated investment potential for wind is transit system, and increasing the transport of goods via a Renewable energy capacity: n/a
about $1 billion by 2020 and for solar projects $1.3 billion. multimodal transport network.13 Another $100 million for waste
management will also be open for new climate-smart investment. L O W C A R B O N TA R G E T S
Solar thermal/
• Renewable energy target of 10% of
concentrated total energy mix by 2020
$1B Buildings
solar power
$0.5B Jordan’s climate- • Unconditional reduction of 1.5% of
smart investment greenhouse gases below a business-
Solar PV potential in urban
as-usual scenario
$0.3B Jordan's climate- infrastructure by 2020
smart investment
potential in the $2.6B Transport
power sector by I F C C L I M AT E B U S I N E S S
$2B
2020 (FY2010 – 2016)
$2.3B Wind
$1B Waste
 Priorities for Jordan to attract more

CONTINUE TO OPEN THE U N TA P P E D E N E R G Y E F F I C I E N C Y WAT E R R E S O U R C E E F F I C I E N C Y

MARKET FOR RENEWABLES
Jordan has strong potential to improve Strengthen water loss reduction and conservation
Jordan can build its support to small- energy efficiency, particularly in the and improve energy efficiency of water sector
to-medium scale renewable energy commercial and household sectors. More operations to jump-start more climate-smart
installations by providing additional policy performance standards and incentives agriculture.
incentives and support; while also opening could help.
the grid-scale renewables market by
strengthening the electricity grid.
MOROCCO
Morocco’s estimated climate- Morocco has also established new national agencies to
encourage energy efficiency and renewable energy and
smart investment potential aims to improve its energy efficiency by 12 percent by
2020 and 15 percent by 2030.14 According to Morocco’s
is nearly $68 billion in select NDC, implementation will require total investment of
$45 billion from now until 2030, $35 billion of which
sectors from 2016–2030. must come from new sources of climate finance.15
Morocco’s NDC pledges to reduce greenhouse-gas Despite the slowdown of capital flows following the
emissions by 13 percent compared to business-as-usual Arab Spring, Morocco is an attractive destination
levels by 2030. Morocco’s NDC includes a detailed for climate-smart investment. The country’s master
list of 54 measures necessary to achieve its climate development plan for its economy is based on leveraging
commitment. Most of these measures are already found “its unique status as a multilingual nation with a tri-
in national legislation. For example, Morocco has an regional focus (toward Sub-Saharan Africa, Middle East,
ambitious goal to increase the share of renewables in and Europe) to transform the country into a regional
its power mix to 42 percent by 2020 and 52 percent hub for shipping, logistics, finance, manufacturing,
by 2030. With very few fossil fuel resources, Morocco assembly, and sales.”16
imports about 90 percent of its energy needs.
M O R O C C O I N D I C AT O R S

The country’s targets to install 2 GW of solar, 2 GW of wind, Morocco’s rapid urbanization since independence in 1956 has GDP growth: 4.4%
and 2 GW of hydro by 2020 are rapidly driving new investments. been driven by its population growth. Morocco’s total population Inflation: 1.6%
Morocco’s flagship solar project – the Noor Concentrated Solar has more than tripled since 1960, reaching 34.4 million in 2015. Ease of Doing Business rank: 80 (2016)
Thermal Plant – has been referenced as a model for the region’s Moroccan citizens living in urban areas also rose from 29.2
S&P credit rating: BBB-
ability to capture its enormous solar capacity, perhaps even percent in 1960 to 61.8 percent in 2015.18 For the green buildings
changing its status as an energy importer. Indeed, the Moroccan sector, IFC estimates $2 billion of investments will be made in
government is planning to export electricity to Spain, Portugal and new low-carbon buildings by 2020. Morocco’s plans for the GHG emissions rank: 71 (2012)
Mauritania via a network of high-voltage cables.17 Over the 2020 transport sector and waste management sectors represent a Renewable energy capacity: 2.4 GW
time frame, IFC estimates commercial investment opportunity in $3.4 billion investment opportunity by 2020. National priorities
Morocco is $7 billion for solar projects, with $2 billion and in low-carbon transport include a focus on its port strategy to L O W C A R B O N TA R G E T S
$5 billion for solar PV and solar thermal technologies, respectively. improve performance, create incentives for innovation, maximize
Wind represents a $3 billion opportunity, followed by $400 connectivity, and integrate environmental standards into port • 42% of power-generating capacity
million for small hydro projects by 2020. management. from renewables by 2020 and 52% by
2030
Solar thermal/
• Add 2 GW of solar, 2 GW of wind and 2
$5B concentrated
Buildings GW of hydro by 2020
solar power
$2B Morocco’s climate-
smart investment • Improve energy efficiency by 12% by
Solar potential in urban 2020 and 15% by 2030
$2B Morocco’s climate- infrastructure by 2020
smart investment
potential in the $5.4B Transport
power sector by $3B I F C C L I M AT E B U S I N E S S
2020
(FY2010 – 2016)
$10.4B Wind
Waste
$3B
Small
hydro • Renewable energy: $11 million
$0.4B
 Priorities for Morocco to attract more

P U B L I C- P R I V A T E S O L U T I O N S A CC E L E R AT E T H E G R O W T H O F BUILD UP GREEN BANKING

RENEWABLE POWER
Ramp up the use of public-private Work to diversify sources of financing for
partnerships to generate a pipeline of Streamline process and standardize renewable energy by building capacity to increase
street lighting, transport, buildings and documentation and improve grid the share of commercial bank lending.
other climate-friendly projects. integration to accelerate large-scale and
smaller renewable projects.
Endnotes
1 REN21 (2016), Renewables 2016, Global Status Report, access at http://www.ren21.net/status-of-renewables/global-
status-report/
2 IRENA (2014), Pan-Arab Renewable Energy Strategy 2030, access at http://www.irena.org/DocumentDownloads/
Publications/IRENA_Pan-Arab_Strategy_June%202014.pdf
3 Ibid.
4 BNEF (2016), Egypt Country Profile, Commentary Section
5 United States Department of State (2016), “Egypt Investment Climate Statement 2016”, access at http://www.state.
6 Egypt’s Ministry of Transport, Maritime Transport Sector (2016), Transport Minister: ministry prepares list of
investment projects worth of $13.5 billion till 2030, access at http://www.mts.gov.eg/en/content/738-Transport-
Minister%3A-ministry-prepares-list-of-investment-projects-worth
8 International Center for Tropical Agriculture (CIAT) (2015), Pre-proposal for the Integrative CRP on Climate Change,
Agriculture and Food Security (CCAFS). Access at: https://ccafs.cgiar.org/publications/pre-proposal-integrative-crp-
climate-change-agriculture-and-food-security-ccafs-%EF%BF%BC#.WA4nSEIrK70
9 FAO (2016), The Agriculture Sectors in the Intended Nationally Determined Contributions: Analysis. Access at: http://
www.fao.org/3/a-i5687e.pdf
10 REN21 (2016), Renewables 2016, Global Status Report, access at http://www.ren21.net/status-of-renewables/global-
status-report/
11 Hashemite Kingdom of Jordan (2015), Intended Nationally Determined Contribution, access at http://www4.unfccc.
int/submissions/INDC/Published%20Documents/Jordan/1/Jordan%20INDCs%20Final.pdf
12 BNEF (2016), Jordan Country Profile, Commentary Section
13 Jordan Ministry of Environment (2016), National Strategy and Action Plan for Sustainable Consumption and
Production, access at https://www.switchmed.eu/en/documents/scp-action-plan-jordan.pdf
14 BNEF (2016), Morocco Country Profile, Commentary Section
15 Morocco (2015), Intended Nationally Determined Contribution Under the UNFCCC, access at http://www4.
unfccc.int/Submissions/INDC/Published%20Documents/Morocco/1/Morocco%20INDC%20submitted%20to%20
UNFCCC%20-%205%20june%202015.pdf
16 United States Department of State (2016), “Morocco Investment Climate Statement 2016”, access at http://www.
17 BNEF (2016), Morocco Country Profile, Commentary Section
18 World Bank Data (2014)

Unlocking Climate
Investment Opportunities
101
O V E RV I E W The outlook for private sector investment in climate solutions is
strong. With steadily declining costs for renewable energy technologies,
successful green building business models, and the emergence of
promising developments in climate-smart agriculture, companies and
investors have up to $23 trillion in opportunities between 2016 and
Unlocking 2030. The NDCs can unlock these opportunities if the right enabling
conditions are created that allow the private sector to thrive. There are
Climate Investment
three key priorities for countries seeking to attract private investment to
meet their climate goals:
• Achieve NDC goals. Act quickly to integrate NDC commitments into
Opportunities national development strategies and budget processes. Put in place

clear and consistent policies – such as carbon pricing, performance
standards, and market-based support. Also ensure that climate
considerations are integrated into other sector policies (energy and
agriculture, for example).
• Strengthen the private sector investment climate. Improve the overall

enabling conditions for the private sector to operate and invest in
the targeted sectors, including enhancing domestic financial markets,
related regulation and capacity
• Strategically use limited public finance. Government budgets will not

be enough to address climate change. Public funds should be used
strategically to mobilize much larger sums of private capital, e.g., by
reducing risk and providing project preparation support.
This section discusses each of these priorities in more detail.
Achieve NDC goals

Set a long-term framework. An important first step for any climate plan
to attract private investment is to have a long-term target or goal. Many
NDCs have targets related to emissions, energy, and capacity. The next
step is to integrate these goals into national development strategies and
budget processes by introducing the policies and measures needed to
fully implement these targets.
It is critical that countries integrate climate planning – taking into

account specific NDC targets and sector priorities – into their

basic development strategy and capital budgeting process, to align
development and climate priorities. This helps governments to:
• Create a platform for decision makers to engage in substantive

discussions on how to strengthen climate responses, in alignment with
national priorities and international commitments.
• Strengthen the alignment of programs and initiatives across sectors

and between national and local levels to ensure effective and efficient
delivery of climate results.
• Increase the transparency of spending against climate objectives.
• Move towards the accounting of outcomes and impacts to better track

spending and monitor physical achievements.
Countries can build on existing public finance management systems to

better define what constitutes climate-related spending and identify the
available public sources of climate finance to support these investments.
Several countries have already begun to identify climate expenditure to Photo: © IFC
achieve their climate policy objectives. Countries may choose to focus
on monitoring climate-related spending on those programs considered
most strategic or those with the largest budget allocations.
longer-term transition through such measures as increased funding for
Governments also need to adjust their infrastructure needs assessments research and development, technology demonstration, and infrastructure
to prioritize low-carbon, climate-resilient infrastructure. It is important planning.1
to recognize that climate change is not the main driver for most
Get the prices right. To attract private investment, fiscal policy must
developing countries. However, climate change is linked closely to other
be aligned with climate goals. This means removing subsidies that
development goals – such as alleviating air pollution, providing energy
incentivize producing and using emissions-intensive fossil fuels,
access, limiting health impacts, increasing livable urban areas, sustaining
reforming other energy pricing, and putting a price on carbon emissions.
agriculture, and reducing vulnerability. For example, governments are
This levels the playing field between low- and high-carbon alternatives.
increasingly designing policies to proactively support greater integration
Fortunately, more than half of the NDCs reference carbon pricing
of renewable energy into the electricity sector. This is driven by several
or markets as key elements of their country climate strategies – and
goals, including concern about rising air pollution, as well as goals for
momentum is growing.
energy security, reduced imports, and diversifying the energy mix.
Provide flexible, market-based support for targeted sectors.
Policies across the sectors covered by the NDCs should be aligned
Governments can provide targeted subsidies or financial support to
to ensure that they achieve the maximum possible impact, minimize
help new climate-smart investments achieve a level playing field with
unintended consequences, and provide a clear and consistent framework
traditional high-emitting options. Given the increased competitiveness of
for the private sector. There needs to be a greater push to slow the
solar PV and onshore wind, support may not be needed, unless there are
growth of coal in key regions – it is critical to act now to avoid lock-in
other market barriers that need to be addressed. In the case of renewable
of emissions-intensive assets, while laying the path for a low-carbon,
Unlocking Climate Investment Opportunities 103

GLOBAL THEME
Carbon pricing is
gaining momentum
An increasing number of governments consider carbon pricing is happening in regions like China, the Republic
pricing to be good fiscal and environmental policy. of Korea, and the EU, which have pricing in place.
Today, 40 countries and over 20 cities, states, and These progressive companies are climate-proofing their
provinces are already putting a price on carbon. They business models to be the first movers in clean energy
include seven out of the 10 largest global economies. All markets.
these instruments cover 13 percent of global emissions
While this momentum is encouraging, current price
and have a collective value of $50 billion, allowing
levels and coverage will not put us on a 2°C pathway.
governments to raise about $26 billion in revenues in
The majority of emissions (85 percent) are priced at less
2015.2 This is a threefold increase over the past decade.
than $10 per ton of carbon dioxide, which is lower than
Governments are pricing carbon because it provides
the price that economic models say is needed to meet
a “triple dividend”: it is good for the environment; it
global climate stabilization goals. To advance well-
raises revenue efficiently, making it possible to reduce
designed carbon pricing systems in countries around
other taxes; and it drives innovation and critically
the world, the Carbon Pricing Leadership Coalition was
needed investments in clean technologies.
launched at the 21st Conference of the Parties, bringing
From the business side, over 1,200 global businesses together governments, businesses, and nongovernmental
use an internal carbon price or plan to do so in the organizations to help accelerate the pace of carbon
next two years – this is a substantial increase from just pricing implementation around the world.
150 companies that reported using a carbon price in
2014.3 The most rapid growth in corporate carbon www.carbonpricingleadership.org

energy, support has traditionally been given in the form of tax credits
or rebates, as well as feed-in tariffs, which provide a subsidy to targeted
technologies per kilowatt-hour sold to the electricity grid. More recently,
there has been increased use of flexible support mechanisms like reverse
auctions, competitive procurements, and other processes that let market
participants bid for the subsidy that they need to make their project
viable.4
Use performance standards and mandates to drive greater adoption

and demand for low-carbon options. In addition to carbon pricing,
governments can use other incentives to ensure strong uptake of
energy-efficient, low-carbon products and services. These include labels,
performance standards, fiscal incentives, and financial instruments, which
have a proven track record in countries at all income levels and can
ensure that the best technologies are used to reduce energy demand and
carbon emissions.5 These policies can help trigger consumer adoption, enabling environment for private investment, one that does not impose
while also reducing the level of any carbon that might be needed. unnecessary costs and reduces risks faced by firms and financial
Develop a transition plan for the most affected sectors. Implementing institutions, strengthens competition and promotes investment and
NDCs will inevitably result in changes in a country’s industrial base. capital flows. Effective and transparent business taxation, regulation,
When losses are concentrated in a few sectors, gaining full industry legal enforcement of property rights, frameworks for public-private
and stakeholder support to implement the low-carbon transition will partnerships, and proactive investment policies all help to build investor
be critical. Governments can address this by designing policies to avoid confidence. Efforts to develop financial markets to finance green
concentrating losses and by compensating highly affected groups. One operations need to be synchronized with work to support green banking,
solution is to use regulations and incentives that apply only to new foster greater penetration by insurance providers to build resilience, and
capital. This approach improves energy efficiency, creates low-carbon incentivize the pensions sector to invest in long-term capacity. The World
substitution options without hurting the owners of existing assets, and Bank Group’s annual Doing Business Survey is a useful tool to assess the
reduces vulnerability to the subsequent introduction of carbon prices. overall state of the investment climate in countries.7
Another solution is to adopt compensation plans, using either resources Taking into account the relative newness of the green investment
from carbon pricing or the existing tax and social protection system. sector in many countries, additional institutional capacity, regulatory
Overall, countries with strong social protection may be better able to frameworks, and – possibly – financial incentives are needed to address
support the transition of workers from declining polluting sectors to the associated political, policy, technology, operational, currency and
growing greener sectors.6 capacity risks for firms and all segments of the financial sector. This
should help rebalance the risk-reward profile in favor of resilient and
Strengthen the private sector investment less carbon-intensive investments. These efforts need to be supplemented
climate by a pipeline of marketable projects and green financial instruments.
In addition to putting in place a strong package of climate policies, Reducing transaction costs associated with public-private partnerships
crowding in private sector funding will require a robust domestic and providing certainty through simplified permitting procedures and

"A critical gap in…successful green economy planning is financial literacy. If
policy makers and project managers don’t understand finance, the different
risk tolerances of different types of capital, and how to raise capital they
cannot be expected to put together attractive, bankable deals."
9
—South Africa’s National Business Initiative
Governments also need to align financial regulations with their climate

investment goals. Often it is not project-related issues but regulatory,
structural, and behavioral barriers that prevent the financial sector
from being able to invest in climate action. For example, most countries
put ceilings on pension funds’ exposure to alternative assets – most
green investment falls into this category. Central bank rules around
minimum rates and short tenors for lending can significantly increase
the cost of capital for developers. In Indonesia, foreigners are limited
to a 49 percent stake in power plants – this has discouraged investment
in smaller plants and large plants are seen to have greater risks due to
unpredictable licensing procedures. As a result, Indonesia’s regulator is
developing a Roadmap for Sustainable Finance in Indonesia 2015–19
– a systematic plan that will be applicable to the entire financial sector,
standardized documents like power purchase agreements, for example,
including pension funds.10 Financial regulators and ministries of finance
are strong drivers of investments. They make projects bankable and
and planning need to be aligned on NDC implementation. In particular,
attract funding. There is significant potential for scaling up investments they need to be aware of major players in the finance sector and their
when this is combined with sector-specific policies that provide degree of adaptability when considering possible actions to scale up
opportunities and shift incentives for private investment, such as green investment.
introducing fiscal incentives, well-defined feed-in tariffs, or renewable
portfolio standards for clean energy.
Strategically use public finance
For example, Jordan’s renewable energy law was complemented by
Well-designed enabling policies have a critical role to play in unlocking
feed-in tariffs; 20-year power purchase agreements with standardized
private climate investment. Public finance plays a complementary – and
contracts, including tariff adjustment mechanisms for inflation and
equally important – role. The main challenges of mobilizing institutional
exchange rate variation; and a 10-year income tax holiday with a
investments in developing countries relate to investors’ fiduciary duties,
lower tax rate. The government also provided a sovereign guarantee to
and include:
back-stop the buyer’s payment obligations under the power purchase
agreement. This mix of policies, processes, and incentives resulted in the • Risk-returns: Lack of investment opportunities that meet institutional
largest private sector-led solar initiative in the Middle East and North investors’ required risk-adjusted returns and needs for sufficiently
Africa – the 117 MW $290 million Tafila Wind Farm, which is being large investment size, risk diversification, and liquidity.
followed by 12 solar projects with power purchase agreements totaling • Lack of strategic policy signals and uncertain public climate finance
190 MW. This is transforming power generation in Jordan.8 flows: While the Paris Agreement and the NDCs have sent a strong

BOX
Green finance
“Green finance” refers to the financing of investments Momentum around the role of the financial sector in
that provide environmental benefits in the broader supporting sustainable development and addressing
context of environmentally sustainable development. climate change has been generated by the G20, and
Greening the financial system goes beyond lending and further strengthened by the Financial Stability Board
investment standards by considering both the impact of and the Paris Agreement and the associated NDCs.
environmental and social risks on the financial system, However, there is currently no systematic approach
and the impact of the financial system on environmental to assessing progress on these challenges within the
and social risks. financial system. As countries begin to implement
their NDCs, being able to compare the current supply
While some progress has been made in green finance,
of green finance provided by the private sector with
only a small fraction of bank lending is explicitly
the investment needs globally and per country would
classified as green according to national definitions. Less
allow for the development of clear action points to
than 1 percent of global bonds are labeled green and less
close any gaps.
than 1 percent of the holdings by global institutional
investors are green infrastructure assets.11 There is To effectively measure and track green finance,
significant potential for scaling up green finance, but there needs to be a strong global push to harmonize
there are also many challenges, including difficulties in definitions on what counts as green and develop relevant
internalizing environmental externalities, information indicators by which progress on sustainability and
asymmetry (for example, between investors and greening investments can be measured and aggregated.
recipients), inadequate analytical capacity, lack of clarity Such efforts will improve our understanding of the
in green definitions, and maturity mismatch – often effectiveness of policies and incentives being developed
associated with long-term projects. to drive green finance.
Photo: © IFC
signal, predictable and transparent policies (such as carbon pricing)
and credible implementation plans are essential to build market
confidence.
• Lack of climate risk management skills: There is uncertainty among

investors on how to measure and track climate risk, including a lack
of data at project and portfolio levels, uncertainty about climate
policy, and unfamiliarity with new technologies.
• Below investment grade and emerging-market risks: For example,

weak operating environments or governance, exposure to volatile
currencies, and the recent slowdown in economic growth.
The NDCs can help identify investment opportunities and generate a

project pipeline. The path from development plan, to project idea, to
investment plan, to financial close is a long, challenging one – this phase
of the project lifecycle has the highest risk, and the high development
and transaction costs make it difficult for the private sector. Using public
finance to scale up support for project preparation and development can
play a critical role in encouraging investment.
Furthermore, to attract private capital, investments must have adequate

risk-adjusted returns and be of suitable size. This is particularly
important in newer climate business areas where perceived risk is high,
such as energy storage, or where aggregation models are unfamiliar in
a developing-country context. Governments can increase their efforts to
reduce risk (for example, by blending public and private finance), while
also helping to aggregate smaller, de-risked assets, diversified across
sectors and geographies, to attract institutional investors.
To allocate capital and provide efficient debt financing, governments

should ensure that capital markets are operating well and have the
necessary capacity. The financial system also needs to adjust for climate
risk: banks and other financial institutions should begin to develop plans
to deal with forthcoming climate impacts, new policies, and changes in
technologies and markets.12
Finally, governments can catalyze private sector investments through

targeted financing mechanisms and institutional arrangements that
blend public and private interests, expertise, and resources to reduce risk
and address bottlenecks preventing private investment.
Photo: © IFC
BOX
Financial innovation for tackling

climate change
Mobilizing private capital through financial innovation that enable resource efficiency and develop low-carbon The World Bank Group’s Pilot Auction Facility
is a strategic priority for IFC. products and services in emerging markets. for Methane and Climate Change Mitigation is an
innovative climate finance mechanism designed to
Green bonds are a good example of an aggregation IFC is also actively engaged with several financial
stimulate private investment in projects that reduce
and securitization vehicle that offers investors a green innovation platforms established to develop new
greenhouse-gas emissions. The facility consists of
investment opportunity without sacrificing returns. Since approaches to climate finance. The Global Innovation
two key elements. The first, a tradable put option
2008, the World Bank Group has issued more than $14 Lab for Climate Finance13 designs financial mechanisms
for emission reductions, provides option holders
billion in green bonds. Proceeds from these bonds are and structures that have the potential to attract
with the right, but not the obligation, to sell future
used to support low-carbon projects. The World Bank institutional investments.
emission reductions to the Pilot Auction Facility at a
Group’s triple-A ratings provide security for investors,
One product under development, with support from the predetermined price. The second element, an auction
and the development mandate and safeguards provide
India Climate Finance Lab, is the India Rooftop Solar platform, transparently allocates and determines
assurance for the use of proceeds and impact. IFC’s
Warehousing Facility, a $500 million revolving facility. the value of the options. The facility has hosted two
green bond program has won several industry awards,
It will help the Indian government reach its solar power successful auctions to date, allocating more than $40
including best local currency green bond and the
target and deliver on its NDC. The warehouse will million in climate funds to reduce 14.4 million tons of
market’s first-ever $1 billion green bond.
aggregate a pool of rooftop solar loans, which will be carbon dioxide equivalent.14
The $418 million IFC Catalyst Fund makes investments de-risked and securitized as an asset-backed green bond
in private equity funds, providing capital to companies when the warehouse reaches a suitable size.

B OX
Using blended climate finance to

mobilize private sector capital
In most of the countries in which IFC operates, • A $15 million investment in Ghana to boost output
investment opportunities for low-carbon projects face at a 220 MW power plant by 50 percent, without
both significant barriers and uncertain returns. Barriers incurring any additional fuel consumption. The project
can range from lack of market knowledge and capacity is expected to reduce power costs for Ghanaian
of project developers to macroeconomic challenges and consumers and businesses, as well as avoid 118,000
business environment risk. tons of carbon dioxide emissions per year.
To overcome some of these barriers, IFC blends • An advisory engagement with leading agribusiness
small amounts of public concessional funds with IFC companies in Nepal to promote improved agricultural
commercial financing to fund new projects that have a and water management practices for smallholder
high development impact and strong potential to create farmers. Early results have shown that more than
a demonstration effect, but have not yet established a 75 percent of targeted farmers are adopting climate-
commercial track record. resilient practices and crop yields in demonstration
farms are improving by 58 percent.
Since FY10, IFC has supported more than 100
investment and advisory projects across 40 countries • Investments totaling $20 million into three Turkish
using blended climate finance. Over that period, IFC has banks to catalyze lending for energy-efficient equipment
committed $341 million in donor finance, mobilizing to energy-intensive companies. These investments are
$1.2 billion in IFC financing and $3.9 billion in other expected to directly mitigate more than 200,000 tons of
private sector investments.15 Examples of blended carbon dioxide emissions per year.
climate finance projects include:
www.ifc.org/BlendedClimateFinance
Photo: © IFC
Another promising area for unlocking private investment is the use the promising new sectors, such as climate-smart agriculture, industrial
of concessional or “blended” climate finance. Blended climate finance energy efficiency, waste, and transport. Investors like IFC, companies,
consists of various products and structures, including risk-sharing governments, civil society groups and academic institutions should
products, lower interest rates, longer tenors, subordinated rank in loans, create sector-specific task teams to further map the NDCs and other
or lower returns for equity investments (see box to left). However, given policies, assess specific project types, estimate the investment potential
the limited availability of concessional funds, it is important to find an and identify policy or other barriers that need to be addressed to unlock
optimal risk allocation among the various players and leverage public this potential.
capital and concessional money. Currently, concessional finance is too
There is also the need to increase dialogue between investors,
fragmented. Creating risk pools and donor financing platforms will help
companies, civil society and governments in specific countries and
improve transparency and alignment.
sectors. These dialogues could test key elements of countries’ NDCs and
offer private finance and business models—as well as policy changes
Next steps and public finance tools—that are needed to unlock private investment.
This sort of focused, pragmatic approach will help to turn countries’
This report has been developed to help advance the discussions around
NDCs and climate goals into specific investment strategies. By involving
the implementation of the Paris Agreement, with an eye on the private
the private sector from the start in policy design, countries’ NDC
sector investment opportunity. This is just the first step. In order to
implementation will have a quicker path, resulting in faster investment
make real progress and unlock the full private sector investment
and realization of climate benefits.
potential, additional research, thought leadership, information exchange
and public-private dialogue are needed. While there is a good deal The International Finance Corporation stands ready to work with like-
of information and market analysis for renewable energy and green minded partners to turn the investment potential identified in this report
buildings investment potential, there is a large data gap for many of into reality.

Endnotes
1 World Bank Group (2015), Decarbonizing Development, access at http://www.worldbank.org/content/dam/
Worldbank/document/Climate/dd/decarbonizing-development-report.pdf.
2 World Bank Group (2016), State and Trends of Carbon Pricing, available at http://documents.worldbank.org/curated/
en/636161467995665933/State-and-trends-of-carbon-pricing-2015.
3 CDP (2016), Embedding a Carbon Price into Business Strategy, available at https://b8f65cb373b1b7b15feb-
c70d8ead6ced550b4d987d7c03fcdd1d.ssl.cf3.rackcdn.com/cms/reports/documents/000/001/132/original/CDP_
Carbon_Price_report_2016.pdf?1474899276.
4 IRENA (2013), Renewable Energy Auctions in Developing Countries, available at https://www.irena.org/
DocumentDownloads/Publications/IRENA_Renewable_energy_auctions_in_developing_countries.pdf.
5 World Bank Group (2015), Decarbonizing Development.
6 World Bank Group (2015), Decarbonizing Development.
7 See http://www.doingbusiness.org/.
8 For more information about this project, see For more information, see http://ifcext.ifc.org/IFCExt/pressroom/
IFCPressRoom.nsf/0/41F0C8F1C2A2D62885257C30002AD206.
9 National Business Initiative’s Green Economy Finance work, for more information see http://www.nbi.org.za/.
10 See http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/cb_home/publications/
towards+a+sustainable+financial+system+in+indonesia for more information.
11 G20 Green Finance Study Group (2016), G20 Green Finance Synthesis Report, access at http://g20.org/English/
Documents/Current/201608/P020160815359441639994.pdf.
12 See, e.g., Blackrock Investment Institute (2016), The Price of Climate Change: Global Warming’s Impact on
Portfolios, access at https://www.blackrock.com/corporate/en-mx/literature/whitepaper/bii-pricing-climate-risk-
international.pdf.
13 See http://climatefinancelab.org/ for more information.
14 For more information, see https://www.pilotauctionfacility.org/.
15 For more information about IFC’s Blended Finance program, visit http://www.ifc.org/wps/wcm/connect/topics_
ext_content/ifc_external_corporate_site/cb_home/mobilizing+climate+finance/blendedfinance.

Annex
ANNEX I
particular sectors are important for the future economic trajectory of

developing countries. More work thus needs to be done to help drive
Methodology for and track climate investment in these sectors.
It is also important to note that few countries’ NDCs mentioned

every sector that provides an opportunity to mitigate greenhouse-gas
estimating emissions. For example, if a country’s NDC did not include transport
or transportation, IFC still examined this sector as most governments
climate-smart
are addressing issues related to transportation given the inherent
energy security, infrastructure, social, and environmental ramifications
demonstrated by the sector. In these instances, IFC used the targets from
investment potential the country’s existing national legislation and plans to calculate their
associated climate-smart investment potential, as they will be essential
components to countries’ NDC implementation strategies.
The estimates in this report are based on the 21 NDCs submitted to the IFC’s analysis began by using the World Bank’s NDC database to
United Nations Framework Convention on Climate Change by IFC’s filter the sector priorities and targets for each country of focus.
countries of focus, as well as the national plans, policies, and targets that Using these data, IFC created a map of countries’ sector coverage
underpin them. In 2014, the United Nations Framework Convention and responses outlined in the NDCs. In addition, IFC experts were
on Climate Change provided countries with general guidance on what consulted to gain a better understanding of the policies and market
to consider when drafting their NDC submission; thus just like the conditions of each country.
countries themselves, no two NDCs are alike. The level of detail in each
IFC then examined the key categories of greenhouse-gas emissions for
NDC varies considerably and a wide range of sectors and targets are
each country to identify which sectors were likely government priorities
covered. Furthermore, some countries were better equipped than others
for attracting investment for mitigation activities. Unsurprisingly, for
to compile their NDCs in the timeframe given for submission in advance
most countries these sectors included power, transport, buildings,
of the 21st Conference of the Parties in Paris. Most expect the next
waste, agriculture, and industry. Data spreadsheets were then created
iteration of NDCs – due in 2020 – to be better articulated, with stronger
and distributed to the regions to help collect “bottom-up” data from
pledges that respond to climate change.
staff on the ground. This bottom-up information was then compared
With this in mind, IFC analyzed key selected sectors mentioned in the and combined with an array of existing studies, public and private
countries’ NDCs for which reliable, transparent data were publicly databases, market assessment reports, and research by various
available and measurable. For example, data quality and availability in associations and international organizations. Where data were not
the renewables sector for individual countries is more easily obtainable available, IFC consulted with industry experts to help verify estimates
and reliable than similar data for mitigation and adaptation measures and assumptions. Data interpolation and extrapolation techniques were
in the agriculture, forestry, and land use sectors. Unfortunately, these seldom used.

NDC analysis
Filter and review of NDCs
and country mitigation
and adaptation goals
$ Investment
established for key sectors potential
Data collection and
calculated for
collaboration with IFC priority sectors
regional staff and
industry experts
Country-specific data and

research incorporated
IFC determined the climate-smart investment potential for most Depending on the level of country information available, IFC’s estimates
opportunities by assessing how each specific country target would affect might indicate linear growth towards the 2030 target, or they might
the size of that market (for example, MW of new installed capacity of follow more policy-driven step changes over the 15-year timeframe. In
wind energy by 2030) and then applying country-specific investment other words, some countries will be quicker to ramp up growth than
costs for technology. For example, Country A’s NDC establishes a 30 others, while countries in the middle of a renewable energy boom could
percent absolute greenhouse-gas reduction target by 2030. As part of see a tailing off in new installations as they approach their 2030 target.
this commitment, the country included existing renewable energy targets
Overall, a conservative approach was used to quantify investment
for wind and solar PV energy. Each renewables target was to increase
potentials across technologies and regions, and only investments
the installed capacity by 20 percent by 2030 from a 2015 baseline.
expected to materialize as a result of a country’s own ambitions during
For both wind and solar energy in this example, IFC translated the 20
the 2030 NDC timeframe were considered. More specifically, IFC did
percent increases into total MW of newly installed capacity for both
not use the theoretical or technical potential of investment options,
2020 and 2030 using 2015 data as the baseline for each country.1
but rather the demand-based potential provided by the governments
Methodology for estimating climate-smart investment potential 115

2020 forecast
(MW per renewable
energy type)
2020 2016-2030 forecast

2030 forecast
forecast 2015 baseline data
(MW per renewable (Total MW of new capacity
(MW per renewable (MW per renewable per renewable energy type)
energy type)
energy type) energy type)
2016-2030 forecast
2030 forecast 2015 baseline data
(Total MW of new capacity
(MW per renewable (MW per renewable per renewable energy type)
energy type) energy type)
2016-2030 forecast
(Total MW of wind and solar)
$ Investment costs/
capital expenditure
$ Total investment
($/MW for each renewable potential
$ Investment $ Total investment

energy type)
2016-2030 forecast costs/
(Total MW of wind and solar) capital expenditure
($/MW for each renewable potential
energy type)
themselves, which are largely driven by the socioeconomics, 2016–2030 timeframe and did not attempt to adjust or model future
demographics, and climate ambitions of their countries. price adjustments. This was an editorial decision based on resource
availability and the desire to balance rigor with simplicity.
Investment or capital costs ($/MW) used to derive the final investment
potential figures vary between technologies and countries, and several The figures presented throughout this report are conservative estimates,
sources were used for the calculations made in this report (see Annex which have the potential to be substantially higher if critical government
X). For example, in certain countries where renewables are still in policy initiatives, as discussed in Chapter X, are implemented. In
their infancy, IFC used individual project-level data to project future particular, energy-efficiency potentials in this report often stem from an
investment potential. In other countries, however, IFC relied on analysis of the largest sectoral opportunities within industry, but given
recent, publicly available data from sources such as the International that opportunities exist across the entire economy (such as transport
Renewable Energy Agency, Bloomberg New Energy Finance, and, and buildings), the reader can assume actual totals for energy efficiency
in some instances, IFC’s staff on the ground. It is important to note to be considerably larger.
that IFC kept capital costs static in its calculations through the
1 2015 data for renewables, for example, were derived from sources such as the International
Renewable Energy Agency and Bloomberg New Energy Finance.
Biomass
Indonesia
ANNEX II
SOLID BIOMASS COMBUSTION
2020 potential biomass capacity (MW)
China’s 13th Five-Year Plan for 2020
2030 potential biomass capacity (MW) Renewable energy
China Renewable Energy 2030 Country Roadmap,
Data sources Reference Case, IRENA 2016

Investment costs ($ million/MW)
IRENA Renewable Power Generation Costs in 2014, IRENA
Small hydropower
2020 potential small hydropower capacity (MW)
2015 Indonesia Electricity Supply Business Plan 2016–2025
informing estimates of
(Indonesia RUPTL)
Energy efficiency Extrapolated using Indonesia Electricity Supply Business
Plan 2016–2025 (Indonesia RUPTL) and BNEF Projections
INDUSTRIAL ENERGY EFFICIENCY 2016
2020 country target for energy efficiency (%) Investment costs ($ million/MW)
China’s 13th Five-Year Plan for 2020 IRENA Renewable Power Generation Costs in 2014, IRENA
2015
2030 country target for energy efficiency (%)
China’s NDC
2020 and 2030 investment costs ($ million/MW) Biomass
IEA Energy Efficiency Market Report 2016 SOLID BIOMASS COMBUSTION
East Asia
2016
Investment costs ($ million/MW) 2020 potential biomass capacity (MW)
IRENA Renewable Power Generation Costs in 2014, IRENA Green buildings ASEAN Renewable Energy Policies 2016, ASEAN Centre for
Pacific
2015 Energy, August 2016
NEW GREEN BUILD
2016 2030 potential biomass capacity (MW)
2020 green build ($) Indonesia Renewable Energy 2030 Country Roadmap,
Investment Costs ($ million/MW) China’s NDC, China’s 13th Five-Year Plan for 2020, IFC
Region
IFC Regional Staff Reference Case, IRENA 2016
EDGE staff
2030 green build ($) IRENA Renewable Power Generation Costs in 2014, IRENA
Solar power IFC EDGE staff 2015
SOLAR PV
Transport Geothermal
China
2020 potential solar PV capacity (MW)
China’s 13th Five-Year Plan for 2020 2020 and 2030 potential transportation investment 2020 potential geothermal capacity (MW)
2030 potential solar PV capacity (MW) ($) ASEAN Renewable Energy Policies 2016, ASEAN Centre for
BNEF Projections 2016; China Renewable Energy 2030 China’s 13th Five-Year Plan for 2020, IFC staff Energy, August 2016; BNEF Projections 2016
Country Roadmap, Reference Case, IRENA 2016
2030 potential geothermal capacity (MW)
Renewable Energy Investment costs ($ million/MW) Waste Indonesia Renewable Energy 2030 Country Roadmap,
IRENA Renewable Power Generation Costs in 2014, IRENA Reference Case, IRENA 2016
2015 MUNICIPAL SOLID WASTE
Wind Power MANAGEMENT
S O L A R T H E R M A L / C O N C E N T R AT E D IRENA Renewable Power Generation Costs in 2014, IRENA
2020 potential wind capacity (MW) 2020 and 2030 potential solid waste management 2015
SOLAR POWER
China’s 13th Five-Year Plan for 2020 investment ($)
2020 potential concentrated solar power capacity IFC staff; What a Waste: A Global Review of Solid Waste
2030 potential wind capacity (MW) (MW) Management, World Bank 2012
China Renewable Energy 2030 Country Roadmap,
Reference Case, IRENA 2016
China’s 13th Five-Year Plan for 2020 Energy efficiency
2030 potential concentrated solar power capacity INDUSTRIAL ENERGY EFFICIENCY
Investment costs ($ million/MW) Electric transmission and
(MW)
IRENA Renewable Power Generation Costs in 2014, IRENA BNEF Projections 2016; China Renewable Energy 2030 2020 country target for energy efficiency (%)
2015 Country Roadmap, Reference Case, IRENA 2016 distribution Indonesian National Energy Conservation Master Plan 2011
(RIKEN)
Investment costs ($ million/MW) 2030 potential electric transmission and distribution
investment ($) 2030 country target for energy efficiency (%)
Small hydropower Project data
IFC regional staff Indonesian National Energy Conservation Master Plan 2011
2020 potential small hydropower capacity (MW) (RIKEN)
China’s 13th Five-Year Plan for 2020
2020 and 2030 investment costs ($ million/MW)
2030 potential small hydropower capacity (MW) Tharakan, P., Summary of Indonesia’s Energy Sector
China’s 13th Five-Year Plan for 2020, BNEF Projections Assessment, ADP Papers on Indonesia, No. 9, Asian
Data sources informing estimates of investment potential 117

Biomass
Vietnam
Development Bank 2015

Energy efficiency
Green buildings 2020 potential biomass capacity (MW) INDUSTRIAL ENERGY EFFICIENCY
NEW GREEN BUILD Philippines NDC, BNEF Projections 2016 2020 and 2030 country target for energy efficiency
2020 and 2030 green build ($) 2030 potential biomass capacity (MW)
Renewable energy (%)
Philippines NDC, extrapolated using BNEF Projections 2016 An Energy Efficiency Roadmap for the Philippines 2014–30,
IFC EDGE staff
the Switch-Asia Programme 2013
Investment costs ($ million/MW) Wind power
IRENA Renewable Power Generation Costs in 2014, IRENA 2020 and 2030 investment costs ($ million/MW)
Transport 2015
2020 potential wind capacity (MW) Philippines Energy Efficiency and Conservation Action Plan
Vietnam’s Power Development Plan VII for the Period of 2016–2020, the Switch-Asia Programme 2015
2020 and 2030 potential transportation investment 2016–2030, MAKE Forecast
($)
Master Plan for Acceleration and Expansion of Indonesia’s Geothermal 2030 potential wind capacity (MW)
Vietnam’s Power Development Plan VII for the Period of
Green buildings
Economic Development (2011–2025) 2020 potential geothermal capacity (MW)
2016–2030, MAKE Forecast NEW GREEN BUILD
Philippines National Renewable Energy Plan
Waste 2030 potential geothermal capacity (MW)
Actual project data
2020 and 2030 green build ($)
Philippines National Renewable Energy Plan IFC EDGE staff
MUNICIPAL SOLID WASTE
MANAGEMENT Investment costs ($ million/MW)
Scaling-Up Renewable Geothermal Energy in Indonesia, Small hydropower Transport
2020 and 2030 potential solid waste management ESMAP/World Bank, May 2014
investment ($) 2020 potential small hydropower capacity (MW) 2020 and 2030 potential transportation investment
IFC staff; What a Waste: A Global Review of Solid Waste Vietnam’s Power Development Plan VII for the Period of ($)
Management, World Bank 2012 2016–2030 Vietnam NDC, IFC staff
Energy efficiency 2030 potential small hydropower capacity (MW)
INDUSTRIAL ENERGY EFFICIENCY
2016–2030
Waste
2020 and 2030 country target for energy efficiency MUNICIPAL SOLID WASTE
The
(%) MANAGEMENT
An Energy Efficiency Roadmap for the Philippines 2014–30,
2015 2020 and 2030 potential solid waste management
the Switch-Asia Programme 2013
Philippines 2020 and 2030 investment costs ($ million/MW)

Philippines Energy Efficiency and Conservation Action Plan
2016–2020, the Switch-Asia Programme 2015
Solar power
investment ($)
IFC staff; What a Waste: A Global Review of Solid Waste
Management, World Bank 2012
SOLAR PV
Renewable energy Green buildings

2016–2030
NEW GREEN BUILD
Wind power 2030 potential solar PV capacity (MW)
2020 potential wind capacity (MW) Vietnam’s Power Development Plan VII for the Period of
IFC EDGE staff
Philippines NDC, MAKE Forecast, BNEF Projections 2016 2016–2030
2030 potential wind capacity (MW) Investment costs ($ million/MW)

Philippines NDC, MAKE Forecast, BNEF Projections 2016
Transport IRENA Renewable Power Generation Costs in 2014, IRENA
2020 and 2030 potential transportation investment ($) 2015
Extrapolated using the Philippines’ National Dream Plan
IFC regional staff
for Manila and Surrounding Areas
Biomass
Small hydropower SOLID BIOMASS COMBUSTION
Waste
2020 potential small hydropower capacity (MW) 2020 potential biomass capacity (MW)
Philippines NDC, BNEF Projections 2016 MUNICIPAL SOLID WASTE Vietnam’s Power Development Plan VII for the Period of
MANAGEMENT 2016–2030, ASEAN Renewable Energy Policies 2016
Philippines NDC, BNEF Projections 2016 2020 and 2030 potential solid waste management 2030 potential biomass capacity (MW)
investment ($) Vietnam’s Power Development Plan VII for the Period of
Investment costs ($ million/MW) IFC staff; What a Waste: A Global Review of Solid Waste 2016–2030, ASEAN Renewable Energy Policies 2016
IRENA Renewable Power Generation Costs in 2014, IRENA Management, World Bank 2012
2015 Investment costs ($ million/MW)
2015

Green buildings
Colombia
Latin America
Extrapolated using 2025 government target
NEW GREEN BUILD
2020 and 2030 green build ($) IRENA Renewable Power Generation Costs in 2014, IRENA
and the
IFC EDGE staff 2015
Renewable energy
Transport Biomass
Caribbean 2020 and 2030 potential transportation investment
($)
IFC staff; The Trillion Dollar Question II: Tracking
2020 and 2030 potential biomass capacity (MW)
Wind power
2020 and 2030 potential wind capacity (MW)
MAKE Forecast
Region Investment Needs in Transport, WRI 2016 Brazil Renewable Energy 2030 Country Roadmap,
Reference Case, IRENA 2016 Investment costs ($ million/MW)
Investment costs ($ million/MW) 2015
Waste Cost and Performance Characteristics of New Generating
MUNICIPAL SOLID WASTE Technologies, EIA Annual Energy Outlook 2016
MANAGEMENT Biomass
Argentina 2020 and 2030 potential solid waste management
investment ($) Energy efficiency
2020 and 2030 potential biomass capacity (MW)
IFC staff; What a Waste: A Global Review of Solid Waste Colombia Renewable Energy 2030 Country Roadmap,
Management, World Bank 2012 Reference Case, IRENA 2016
Renewable energy 2020 and 2030 country target for energy efficiency
(%)
Brazil NDC and National Energy Efficiency Plan Cost and Performance Characteristics of New Generating
Wind power Technologies, EIA Annual Energy Outlook 2016
Brazil
2020 and 2030 investment costs ($ million/MW)
2020 potential wind capacity (MW) Energy Efficiency Market Report 2015, IEA 2015
MAKE Forecast Solar power
2030 potential wind capacity (MW) Green buildings SOLAR PV
Argentina Renewable Energy 2030 Country Roadmap,
Reference Case, IRENA 2016 Renewable energy NEW GREEN BUILD 2020 and 2030 potential solar PV capacity (MW)
Colombia Renewable Energy 2030 Country Roadmap,
Investment costs ($ million/MW) 2020 and 2030 green build ($) Reference Case, IRENA 2016
IRENA Renewable Power Generation Costs in 2014, IRENA IFC EDGE staff
Wind power Investment costs ($ million/MW)
2015
2020 potential wind capacity (MW) IRENA Renewable Power Generation Costs in 2014, IRENA
2025 government target Transport 2015
Solar power 2030 potential wind capacity (MW) 2020 and 2030 potential transportation investment
SOLAR PV 2025 government target; Brazil Renewable Energy 2030 ($) Green buildings
Country Roadmap, Reference Case, IRENA 2016 IFC staff; The Trillion Dollar Question II: Tracking
2020 potential solar PV capacity (MW) Investment Needs in Transport, WRI 2016 NEW GREEN BUILD
BNEF Projections 2016 Investment costs ($ million/MW)
IRENA Renewable Power Generation Costs in 2014, IRENA 2020 and 2030 green build ($)
2030 potential solar PV capacity (MW) IFC EDGE staff
Argentina Renewable Energy 2030 Country Roadmap,
2015 Waste
Reference Case, IRENA 2016 MUNICIPAL SOLID WASTE
Investment costs ($ million/MW) Solar power MANAGEMENT Transport
IRENA Renewable Power Generation Costs in 2014, IRENA 2020 and 2030 potential transportation investment
SOLAR PV 2020 and 2030 potential solid waste management
2015 ($)
investment ($)
2020 potential solar PV capacity (MW) IFC staff; The Trillion Dollar Question II: Tracking
2025 government target Investment Needs in Transport, WRI 2016
Biomass 2030 potential solar PV capacity (MW)
SOLID BIOMASS COMBUSTION 2025 government target; Brazil Renewable Energy 2030
Country Roadmap, Reference Case, IRENA 2016 Waste
Argentina Renewable Energy 2030 Country Roadmap, Investment costs ($ million/MW) MUNICIPAL SOLID WASTE
Reference Case, IRENA 2016 IRENA Renewable Power Generation Costs in 2014, IRENA MANAGEMENT
2015 2020 and 2030 potential solid waste management
Argentina Renewable Energy 2030 Country Roadmap, investment ($)
Reference Case, IRENA 2016 Small hydropower Management, World Bank 2012
Investment costs ($ million/MW) 2020 potential small hydropower capacity (MW)
Cost and Performance Characteristics of New Generating 2025 government target
Technologies, EIA Annual Energy Outlook 2016

Mexico Energy efficiency
Solar power
SOLAR PV India
2020 and 2030 country target for energy efficiency Government of Bangladesh
Renewable energy (%)
Renewable energy
Government of Mexico
IFC staff, government of Bangladesh
Wind power 2020 and 2030 investment costs ($ million/MW) Wind power
Energy Efficiency Market Report 2015, IEA 2015
BNEF, Levelised Cost of Electricity, DFID Priority Countries,
2020 and 2030 potential wind capacity (MW) 2020 potential wind capacity (MW)
November 2015
MAKE Forecast India NDC, government of India
Green buildings 2030 potential wind capacity (MW)
IRENA Renewable Power Generation Costs in 2014, IRENA NEW GREEN BUILD Biomass India NDC, government of India
2015
2020 and 2030 green build ($) SOLID BIOMASS COMBUSTION Investment costs ($ million/MW)
IFC EDGE staff BNEF, Levelised Cost of Electricity, DFID Priority Countries,
Small hydropower November 2015
Government of Bangladesh
2020 and 2030 potential small hydropower capacity Transport 2030 potential biomass capacity (MW)
(MW) Government of Bangladesh Solar power
Renewable Energy Prospects for Mexico, 2015, IRENA 2015 2020 and 2030 potential transportation investment
($) Investment costs ($ million/MW) SOLAR PV
Investment costs ($ million/MW) IFC staff; The Trillion Dollar Question II: Tracking BNEF, Levelised Cost of Electricity, DFID Priority Countries,
IRENA Renewable Power Generation Costs in 2014, IRENA 2020 and 2030 potential solar PV capacity (MW)
Investment Needs in Transport, WRI 2016 November 2015
2015 India NDC, government of India
Waste
MUNICIPAL SOLID WASTE BNEF, Levelised Cost of Electricity, DFID Priority Countries,
Solar power MANAGEMENT Energy efficiency November 2015
SOLAR PV 2020 and 2030 potential solid waste management INDUSTRIAL ENERGY EFFICIENCY
investment ($)
2020 potential solar PV capacity (MW) IFC staff; What a Waste: A Global Review of Solid Waste 2020 and 2030 investment potential for industrial Biomass
Government of Mexico Management, World Bank 2012 energy efficiency ($)
Industry Specific Study on Sustainable Energy Finance
Market Potential for Financial Institutions in Bangladesh, 2020 and 2030 potential biomass capacity (MW)
Government of Mexico; Mexico Renewable Energy 2030
IFC 2012 India NDC, government of India
Country Roadmap, Reference Case, IRENA 2016
SOUTH ASIA
IRENA Renewable Power Generation Costs in 2014, IRENA Green buildings BNEF, Levelised Cost of Electricity, DFID Priority Countries,
2015 November 2015
NEW GREEN BUILD
Biomass
REGION 2020 and 2030 green build ($)
IFC EDGE staff Energy efficiency
2020 and 2030 potential biomass capacity (MW) Transport 2020 and 2030 investment potential for industrial
Mexico Renewable Energy 2030 Country Roadmap,
2020 and 2030 potential transportation investment energy efficiency ($)
Bangladesh
($) India Energy Outlook, WEO Special Report, IEA 2015
Investment costs ($ million/MW) IFC staff, Bangladesh Energy Efficiency and Conservation
Cost and Performance Characteristics of New Generating Master Plan up to 2030
Technologies, EIA Annual Energy Outlook 2016 Green buildings
Renewable energy Waste NEW GREEN BUILD
Geothermal 2020 and 2030 green build ($)
2020 potential geothermal capacity (MW) IFC EDGE staff
Wind power MANAGEMENT
Renewable Energy World; Mexico Renewable Energy 2030
Country Roadmap, Reference Case, IRENA 2016 2020 potential wind capacity (MW) 2020 and 2030 potential solid waste management
Government of Bangladesh investment ($) Transport
2030 potential geothermal capacity (MW) IFC staff; What a Waste: A Global Review of Solid Waste 2020 and 2030 potential transportation investment
Government of Mexico 2030 potential wind capacity (MW) Management, World Bank 2012 ($)
IFC staff, government of Bangladesh
Investment costs ($ million/MW) IFC staff; government of India; India Transport Report:
IFC Staff, Scaling-Up Renewable Geothermal Energy in Investment costs ($ million/MW) Moving India to 2032, 2014
Indonesia, ESMAP/World Bank, May 2014 BNEF, Levelised Cost of Electricity, DFID Priority Countries,
November 2015

Waste Investment costs ($ million/MW) Regional Status Report, REN21 2016 Transport
ECOWAS Renewable Energy Policy, Economic Community
MUNICIPAL SOLID WASTE Investment costs ($ million/MW) 2020 and 2030 potential transportation investment
of West African States 2015
BNEF, Levelised Cost of Electricity, DFID Priority Countries, ($)
MANAGEMENT
November 2015 IFC staff
2020 and 2030 potential solid waste management
Small hydropower
investment ($)
IFC staff; What a Waste: A Global Review of Solid Waste 2020 and 2030 potential small hydropower capacity Geothermal Waste
Management, World Bank 2012 (MW)
2020 and 2030 potential geothermal capacity (MW) MUNICIPAL SOLID WASTE
Market Briefings – Cote d’Ivoire, Africa-EU Renewable
IFC staff; Renewable Energy and Energy Efficiency EAC
Energy Cooperation Programme, 2016 MANAGEMENT
Regional Status Report, REN21 2016
Investment costs ($ million/MW) 2020 and 2030 potential solid waste management
ECOWAS Renewable Energy Policy, Economic Community investment ($)
SUB-
BNEF, Levelised Cost of Electricity, DFID Priority Countries,
of West African States 2015 IFC staff; What a Waste: A Global Review of Solid Waste
November 2015
Green buildings
SAHARAN
Green buildings
NEW GREEN BUILD NEW GREEN BUILD
AFRICA
IFC EDGE staff
IFC EDGE staff South Africa
Transport
REGION 2020 and 2030 potential transportation investment
($)
Transport
2020 and 2030 potential transportation investment
($)
Renewable energy
IFC staff; The Trillion Dollar Question II: Tracking
Investment Needs in Transport, WRI 2016
IFC staff Wind power
2020 potential wind capacity (MW)
Côte d’Ivoire Waste 2015 Annual Report, Global Wind Energy Council
Waste
MUNICIPAL SOLID WASTE 2030 potential wind capacity (MW)
MUNICIPAL SOLID WASTE South Africa’s Greenhouse-Gas Mitigation Potential
MANAGEMENT
MANAGEMENT Analysis, Appendix C, Department of Environmental Affairs
2020 and 2030 potential solid waste management 2014
Renewable energy 2020 and 2030 potential solid waste management
investment ($)
investment ($)
IFC staff; What a Waste: A Global Review of Solid Waste BNEF, Levelised Cost of Electricity, DFID Priority Countries,
Wind power Management, World Bank 2012 November 2015

Market Briefings – Cote d’Ivoire, Africa-EU Renewable Solar power
Energy Cooperation Programme, 2016
ECOWAS Renewable Energy Policy, Economic Community
of West African States 2015
Kenya Nigeria SOLAR PV
2020 and 2030 potential solar PV capacity (MW)
South Africa’s Greenhouse-Gas Mitigation Potential
Analysis, Appendix C, Department of Environmental Affairs
Solar power Renewable energy Renewable energy 2014

SOLAR PV BNEF, Levelised Cost of Electricity, DFID Priority Countries,
Solar power November 2015
2020 and 2030 potential solar PV capacity (MW) Wind power
Market Briefings – Cote d’Ivoire, Africa-EU Renewable SOLAR PV S O L A R T H E R M A L / C O N C E N T R AT E D
Energy Cooperation Programme, 2016 IFC staff; Renewable Energy and Energy Efficiency EAC 2020 and 2030 potential solar PV capacity (MW) SOLAR POWER
Investment costs ($ million/MW) Regional Status Report, REN21 2016 Nigeria NDC for Off-Grid Solar 2020 and 2030 potential solar PV capacity (MW)
ECOWAS Renewable Energy Policy, Economic Community Investment costs ($ million/MW) Investment costs ($ million/MW) South Africa Renewable Energy 2030 Country Roadmap,
of West African States 2015 BNEF, Levelised Cost of Electricity, DFID Priority Countries, BNEF, Levelised Cost of Electricity, DFID Priority Countries, Reference Case, IRENA 2016
November 2015 November 2015 Investment costs ($ million/MW)
Biomass BNEF, Levelised Cost of Electricity, DFID Priority Countries,
November 2015
SOLID BIOMASS COMBUSTION Small hydropower Green buildings
2020 and 2030 potential biomass capacity (MW) 2020 and 2030 potential small hydropower capacity NEW GREEN BUILD
Market Briefings – Cote d’Ivoire, Africa-EU Renewable (MW)
IFC staff; Renewable Energy and Energy Efficiency EAC 2020 and 2030 green build ($)
Energy Cooperation Programme, 2016 IFC EDGE staff

Biomass
Serbia Solar power
SOLID BIOMASS COMBUSTION 2015 SOLAR PV
2020 and 2030 potential biomass capacity (MW) 2020 and 2030 potential solar PV capacity (MW)
South Africa Renewable Energy 2030 Country Roadmap, Turkey NDC
Solar power Renewable energy Investment costs ($ million/MW)
Investment costs ($ million/MW) SOLAR PV Renewables 2016, Global Status Report, REN21 2016
BNEF, Levelised Cost of Electricity, DFID Priority 2020 and 2030 potential solar PV capacity (MW) Wind power Geothermal
Countries, November 2015 Energy Strategy of Russia to 2035, IFC staff
2030 potential wind capacity (MW) 2020 and 2030 potential geothermal capacity (MW)
Investment costs ($ million/MW) Serbian national wind target, IFC staff Turkey’s Energy Transition: Milestones and Challenges,
Green buildings Renewables 2016, Global Status Report, REN21 2016 ESMAP/World Bank 2014
Investment costs ($ million/MW) Turkey Renewable Energy 2030 Country Roadmap,
NEW GREEN BUILD IRENA Renewable Power Generation Costs in 2014, IRENA Reference Case, IRENA 2016
Biomass 2015
IFC EDGE staff SOLID BIOMASS COMBUSTION IRENA Renewable Power Generation Costs in 2014, IRENA
2020 and 2030 potential biomass capacity (MW) Small hydropower 2015
Transport Energy Strategy of Russia to 2035, IFC staff 2020 and 2030 potential small hydropower capacity
2020 and 2030 potential transportation investment Investment costs ($ million/MW) (MW) Energy efficiency
Cost and Performance Characteristics of New Generating BNEF Country Commentary 2016, IFC staff
($) INDUSTRIAL ENERGY EFFICIENCY
IFC staff, South African Department of Transportation Technologies, EIA Annual Energy Outlook 2016 Investment costs ($ million/MW)
IRENA Renewable Power Generation Costs in 2014, IRENA 2020 and 2030 investment potential for energy
2015 efficiency ($)
Waste Small hydropower IFC staff
MUNICIPAL SOLID WASTE 2020 and 2030 potential small hydropower capacity
(MW) Green buildings
MANAGEMENT Green buildings
Energy Strategy of Russia to 2035, IFC staff NEW GREEN BUILD
2020 and 2030 potential solid waste management NEW GREEN BUILD
Investment costs ($ million/MW) 2020 and 2030 green build ($)
investment ($)
IRENA Renewable Power Generation Costs in 2014, IRENA IFC EDGE staff 2020 and 2030 green build ($)
2015 IFC EDGE staff
Waste
Energy efficiency Transport
EASTERN INDUSTRIAL ENERGY EFFICIENCY 2020 and 2030 potential transportation investment
MANAGEMENT
($)
2020 and 2030 investment potential for energy 2020 and 2030 potential solid waste management IFC staff
efficiency ($)
EUROPE AND
investment ($)
IFC staff IFC staff; What a Waste: A Global Review of Solid Waste
Management, World Bank 2012 Waste
Green buildings
CENTRAL
MANAGEMENT
NEW GREEN BUILD
Turkey
ASIA REGION
investment ($)
IFC EDGE staff
Transport
2020 and 2030 potential transportation investment Renewable energy
($)
Russia IFC staff

Wind power
Ukraine
Waste
Turkey NDC; MAKE Forecast; Global Wind Report: Annual
Renewable energy MUNICIPAL SOLID WASTE
MANAGEMENT
Market Update, Global Wind Energy Council 2016
Renewable energy
2020 and 2030 potential solid waste management IRENA Renewable Power Generation Costs in 2014, IRENA
Wind power investment ($) 2015 Wind power
2020 and 2030 potential wind capacity (MW) IFC staff; What a Waste: A Global Review of Solid Waste
MAKE Forecast, Energy Strategy of Russia to 2035, IFC Management, World Bank 2012
Energy Strategy of Ukraine up to 2030, MAKE Forecast
staff

Investment costs ($ million/MW) Waste Energy efficiency S O L A R T H E R M A L / C O N C E N T R AT E D
IRENA Renewable Power Generation Costs in 2014, IRENA SOLAR POWER
2015 MUNICIPAL SOLID WASTE INDUSTRIAL ENERGY EFFICIENCY
MANAGEMENT 2020 and 2030 potential concentrated solar power
2020 and 2030 investment potential for energy capacity (MW)
2020 and 2030 potential solid waste management efficiency ($)
Small hydropower IFC staff
Jordan NDC; 2015 Middle East and North Africa Outlook,
investment ($) BNEF 2015
2020 and 2030 potential small hydropower capacity IFC staff; What a Waste: A Global Review of Solid Waste
(MW) Management, World Bank 2012 Investment costs ($ million/MW)
Energy Strategy of Ukraine up to 2030 Green buildings IFC project data
Investment costs ($ million/MW) NEW GREEN BUILD

2015
IFC EDGE staff
Energy efficiency
Solar power MIDDLE EAST Transport
2020 and 2030 investment potential for energy
efficiency ($)
AND NORTH
SOLAR PV 2020 and 2030 potential transportation investment IFC staff
2020 and 2030 potential solar PV capacity (MW) ($)
Energy Strategy of Ukraine up to 2030; UNECE Renewable Egypt Transportation Ministry, IFC staff
Green buildings
AFRICA
Energy Status Report, REN21 2015
Investment costs ($ million/MW) Waste NEW GREEN BUILD
Renewables 2016, Global Status Report, REN21 2016
REGION
MANAGEMENT IFC EDGE staff
Biomass
SOLID BIOMASS COMBUSTION investment ($) Transport
2020 potential biomass capacity (MW) 2020 and 2030 potential transportation investment
Ukraine’s National Renewable Energy Action Plan up to ($)
2020
Ukraine Renewable Energy 2030 Country Roadmap,
Egypt IFC staff
Waste
Cost and Performance Characteristics of New Generating
Renewable energy Jordan MUNICIPAL SOLID WASTE
MANAGEMENT
Technologies, EIA Annual Energy Outlook 2016 2020 and 2030 potential solid waste management
Wind power
Renewable energy investment ($)
Energy efficiency Egypt NDC, MAKE Forecast
Wind power
INDUSTRIAL ENERGY EFFICIENCY IFC staff; IRENA Renewable Power Generation Costs in 2020 potential wind capacity (MW)
2020 and 2030 investment potential for energy 2014, IRENA 2015 2015 Middle East and North Africa Outlook, BNEF 2015;
Morocco
efficiency ($) MAKE Forecast
IFC staff
Solar power 2030 potential wind capacity (MW)
MAKE Forecast, IFC Staff
SOLAR PV
Green buildings Investment costs ($ million/MW)
NEW GREEN BUILD
Egypt NDC
IFC staff Renewable energy
2020 and 2030 green build ($) Investment costs ($ million/MW)
IFC EDGE staff IFC staff Solar power Wind power
S O L A R T H E R M A L / C O N C E N T R AT E D SOLAR PV 2020 and 2030 potential wind capacity (MW)
Transport SOLAR POWER 2020 and 2030 potential solar PV capacity (MW) Morocco NDC; MAKE Forecast; Morocco Renewable
Jordan NDC; 2015 Middle East and North Africa Outlook, Energy 2030 Country Roadmap, Reference Case, IRENA
2020 and 2030 potential transportation investment 2020 and 2030 potential concentrated solar power
BNEF 2015 2016
($) capacity (MW)
IFC staff Egypt NDC Investment costs ($ million/MW) Investment costs ($ million/MW)
IFC staff IFC staff
IFC project data

Small hydropower
2020 and 2030 potential small hydropower capacity
(MW)
Morocco NDC; Morocco Renewable Energy 2030 Country
Roadmap, Reference Case, IRENA 2016
Africa 2030: Roadmap for a Renewable Energy Future,
IRENA 2015
Solar power
SOLAR PV
IFC staff
S O L A R T H E R M A L / C O N C E N T R AT E D
SOLAR POWER
2020 and 2030 potential concentrated solar power
capacity (MW)
IFC project data
Energy efficiency
2020 and 2030 investment potential for energy
efficiency ($)
IFC staff
Green buildings
NEW GREEN BUILD
IFC EDGE staff
Transport
2020 and 2030 potential transportation investment
($)
IFC staff
Waste
MANAGEMENT
investment ($)
Photo: © IFC

ANNEX III
Data sources for

country indicators
Indicator Source
1. Population (2015) World Bank Group Open Data Bank, http://data.worldbank.org; Accessed: September 21, 2016
2. GDP (2015) World Bank Group Open Data Bank, http://data.worldbank.org; Accessed: September 21, 2016
3. GDP growth (2015) World Bank Group Open Data Bank, http://data.worldbank.org; Accessed: September 21, 2016
4. Inflation (2015) World Bank Group Open Data Bank, http://data.worldbank.org; Accessed: September 21, 2016
5. FDI, net inflows (2015) World Bank Group Open Data Bank, http://data.worldbank.org; Accessed: September 21, 2016
6. Ease of Doing Business Rank (2015) World Bank Group Doing Business, http://www.doingbusiness.org/rankings; Accessed: September 21, 2016
7. S&P Credit Rating (2016) Moody’s Investors Service, Sovereign and Supranational Rating List, https://www.moodys.com/; June 10, 2016
8. Global GHG Emissions Rank Emissions Database for Global Atmospheric Research (EDGAR), http://edgar.jrc.ec.europa.eu/overview.
php?v=GHGts1990-2012&sort=des9; Accessed October 21, 2016
9. RE Capacity (2015) BNEF Country Profiles, https://www.bnef.com/core/country-profiles; Accessed September 21, 2016
10. Low Carbon Targets BNEF Country Profiles, https://www.bnef.com/core/country-profiles; Accessed September 21, 2016
11. IFC Climate Business (FY2010-16) IFC Commitment Report, Climate Finance, LTF Own Account Data Only (FY2010-16)
Data sources for country indicators 125

2016
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Climate Investment

International Finance Corporation is an international organization established by

101 Unlocking Climate

ii Climate Investment Opportunities in Emerging Markets | An IFC Analysis

24 Achieving green growth in

64 Adaptation and the private sector

86 Public-private partnerships for

94 Climate smart agriculture

104 Carbon pricing is gaining

3 What is a Nationally Determined

4 Growing climate risks

6 The World Bank NDC platform

7 IFC: ramping up climate

10 Estimating climate investment

110 Using blended climate finance to

The Paris Agreement accelerates

Latin America and

South Asia 111 211 16 0 0 338 0 85 1,543 255 13 2,234 >250<500

Middle East and

vi Climate Investment Opportunities in Emerging Markets | An IFC Analysis

$2,640 Unlocking private investment for climate

• Achieve NDC goals. Countries should act quickly to integrate their

Executive Summary vii

viii Climate Investment Opportunities in Emerging Markets | An IFC Analysis

Climate-Smart of climate-smart technologies – especially renewable energy – and

Renewable energy is increasingly the choice for rapidly growing

Climate-smart agriculture – measures that increase productivity, enhance

The Paris Agreement accelerates Determined

Climate-Smart Investment Opportunity after the Paris Agreement 3

Growing climate risks

If we keep the average temperature rise below 2°C, three-quarters

4 Climate Investment Opportunities in Emerging Markets | An IFC Analysis

The Paris Agreement is designed to gradually ratchet up ambition in

Climate-Smart Investment Opportunity after the Paris Agreement 5

How countries across the globe – especially growing middle-income

Private sector highlights from NDCs

The World Bank

NDC platform countries followed a transparent NDC development process to build

6 Climate Investment Opportunities in Emerging Markets | An IFC Analysis

Climate-Smart Investment Opportunity after the Paris Agreement 7

8 Climate Investment Opportunities in Emerging Markets | An IFC Analysis

Climate-Smart Investment Opportunity after the Paris Agreement 9

10 Climate Investment Opportunities in Emerging Markets | An IFC Analysis

Latin America and

South Asia 111 211 16 0 0 338 0 85 1,543 255 13 2,234 >250<500

Middle East and

private climate investment opportunity in detailed description of the methodology.

the 21 countries studied for this report.

Climate-Smart Investment Opportunity after the Paris Agreement 11

12 Climate Investment Opportunities in Emerging Markets | An IFC Analysis

Climate-Smart Investment Potential

14 Climate Investment Opportunities in Emerging Markets | An IFC Analysis

East Asia Pacific Climate-Smart Investment Potential 15

16 Climate Investment Opportunities in Emerging Markets | An IFC Analysis

China’s estimated climate-smart business investment potential is

Indonesia’s estimated climate-smart business investment potential is

The Philippines’s climate-smart business investment potential is nearly

Vietnam’s climate-smart business investment potential is an estimated

Venture capital for clean

18 Climate Investment Opportunities in Emerging Markets | An IFC Analysis