IFC to stop funding new coal-powered electricity projects

Tags: International News

IFC to stop funding new coal-powered electricity projects

The International Finance Corporation (IFC), the private sector arm of The World Bank, has said it will not support investments in new coal projects.

An overview of the news

  • The announcement has come as a big relief to those campaigning for a clean energy transition.

  • In the year 2020, IFC unveiled a policy that required its clients to reduce their exposure to coal projects by 2025 and to zero by 2030.

  • There was no talk of stopping new investments in that policy, but now the situation has changed with this new announcement.

  • A new update to IFC's Green Equity Approach (GEA) policy explicitly bars its financial intermediaries clients (such as commercial banks) from investing in coal.

  • IFC lends money to banks and other financial institutions which in turn lend to infrastructure and energy projects.

  • IFC has given loans of about $5 billion to about 88 financial institutions in India.

About International Finance Corporation (IFC)

  • It was established in 1956 as a member of the World Bank Group.

  • A member of the World Bank Group, the International Finance Corporation (IFC) provides financing for private enterprise investment in developing countries.

  • Its focus is the elimination of poverty through economic development, but critics claim it is more focused on profits than people.

  • In fiscal year 2021, IFC invests $31.5 billion in financial initiatives.

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