IFC says to stop funding new coal related infra projects

Subject : International Relations

Section: International Organizations

Concept :

The International Finance Corporation (IFC), which is the private sector division of the World Bank Group, has held that it will not support investments in new coal-related projects.
The International Finance Corporation (IFC) extends funds to banks and other financial institutions to promote infrastructure and energy projects.
The IFC has so far lent around $5 billion to about 88 financial institutions in India.
In 2023, the IFC is looking to undertake various steps which are in line with the Paris Agreement ambitions.
The IFC is looking to mandate a commitment from financial institution clients to not originate and finance any new coal projects.
In 2020, the IFC announced a policy that mandated clients to reduce their exposure to coal projects by half by 2025, and to zero by 2030, however, it did not halt any new investments, but the latest update disallows this too.

About the International Finance Corporation (IFC):

It is an international financial institution that offers investment, advisory, and asset management services to encourage private sector development in developing countries.
It is a member of the World Bank Group and is headquartered in Washington, D.C., United States.
It was established in 1956 as the private sector arm of the World Bank Group to advance economic development by investing in strictly for-profit and commercial projects that purport to reduce poverty and promote development.
The IFC is owned and governed by its member countries, but has its own executive leadership and staff that conduct its normal business operations.
It is a corporation whose shareholders are member governments that provide paid-in capital and which have the right to vote on its matters.

Roles and functions:

Since 2009, the IFC has focused on a set of development goals that its projects are expected to target. Its goals are to increase sustainable agriculture opportunities, improve healthcare and education, increase access to financing for microfinance and business clients, advance infrastructure, help small businesses grow revenues, and invest in climate health.
It offers an array of debt and equity financing services and helps companies face their risk exposures while refraining from participating in a management capacity.
It advises governments on building infrastructure and partnerships to further support private sector development.