Environmental opportunities, sustainable markets.

• Position: Corporate Citizenship

The International Finance Corporation (IFC)--the private sector lending arm of the World Bank Group--has created three environmental funds to enhance the role of the private sector in addressing environmental and social issues in the emerging markets. The funds will be used for emerging market investments that employ or require hybrids of private and public financing, particularly in projects that are innovative or have high developmental impact, and also to promote and articulate the business case for enhanced environmental and social performance at all levels through demonstration of best practices and building local capacity. Project preparation assistance and seed capital will be available for innovative projects. Funding for the facilities is expected to total $55 million over the next five years.

Gavin Murray, Director of the IFC Environment and Social Development Department, said. "If you believe that issues of energy, water, biodiversity and climate change can benefit from market-based solutions, and you need a partner in the emerging markets, IFC is here. Among the development banks, we aim to be the market leader in sustainability."

The three new facilities will fund a range of investments, from traditional sectors and business models to "near to market" technologies and projects that require partial subsidies to be financially viable.

The Environmental Opportunities Facility will handle project development funding and provide flexible investment financing for innovative projects addressing local environmental issues. These projects would produce goods or services that reduce pollution or improve the use of scarce resources, such as water and energy. The Facility aims to overcome the barriers to these investments and move projects towards commercial viability. It will give IFC the ability to "push the market" towards adopting new business models and technologies that address the most immediate environmental problems of those living in developing countries, especially the poor.

The Sustainable Financial Markets Facility will address environmentally and socially responsible lending and investment through IFC financial intermediaries and in the emerging markets' financial sector at large, to increase the positive impact of IFC intermediated financing, enhance the competitiveness of the local financial service industry through better risk management and new products and services, and promote more environmentally and socially...