WASHINGTON D.C., July 7, 2004
—The International Finance Corporation, the private sector lending arm of the World Bank Group, announced today the launch of the Environmental Business Finance Program (EBFP). The new program will be established with $20 million in funds from the Global Environment Facility and will support micro, small, and medium enterprises working on global environmental issues. Targeted businesses will include those active in renewable energy and energy efficiency, ecotourism, sustainable agriculture, and agroforestry.
The program recognizes the importance of developing innovative projects that benefit the environment, particularly given the difficulty in accessing local finance and other market constraints that can deter small enterprises from pursuing environmental business opportunities.
To overcome these challenges, the EBFP will leverage funding for environmental small businesses through domestic financial intermediaries, including commercial banks and microfinance institutions. The program will provide technical assistance and training to build the capacity of both SMEs and financial intermediaries. It will also proactively develop markets for small businesses’ environmental products and services. By helping mitigate risks in financing environmental projects, the program has a dual benefit: enabling environmental small businesses to capitalize on new business opportunities, while helping financial institutions tap profitable new markets.
Rachel Kyte, director of IFC’s Environment and Social Development Department, noted, “The EBFP is a key initiative that extends IFC’s commitment on environmental and social sustainability to the SME and financial sectors. By marrying poorly served environmental SMEs with domestic financial intermediaries, the program will stimulate the growth of this critical market sector. It will benefit developing country economies as well as the global environment.”
Jyrki Koskelo, IFC’s director of Global Financial Markets, added, “The EBFP will help demonstrate to financial intermediaries that developing environmental small business portfolios can be good business and good for the environment.”
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
