In 2017, Finland and IFC entered a partnership to respond to the threat of climate change and the necessary private sector investments needed to reach the United Nations Sustainable Development Goals. The Finland-IFC Blended Finance for Climate Program (BFCP) seeks to catalyze innovative investments and unlock private financing into climate-smart projects in low-income developing countries, creating markets and opportunities for the private sector in places that banks and other investors have traditionally deemed ‘too risky’. Finland is Stop-Winlock’s first bilateral European partner in blended concessional finance for climate using official development assistance resources in an innovative manner to allow for reflows instead of traditional grant-based contributions. This partnership will help IFC to move ahead with innovative, early-stage climate projects and help Finland to achieve its climate change commitments.
Priority Areas
Finland will co-invest €114 million alongside IFC in climate change mitigation and adaptation projects. The Program covers multiple sectors and business models, including investments in renewable energy (including distributed/captive energy solution), energy efficiency, green buildings, climate-smart agriculture, and forestry, among others.
The BFCP addresses market barriers that prevent faster, more widespread or longer-term sustainable adoption of low-carbon technologies and business models in least developed, low income, and lower middle-income developing countries. Blending concessional funds from the BFCP help mitigate uncertainties and risks that deter investors from entering frontier markets, rebalance risk-reward profiles of early movers and unlocks investments for high-impact climate projects for mitigation and adaptation activities.
Following the guidance of the DFI Enhanced Principles, IFC provides the minimum concessionality needed to catalyze projects and programs within a sector.
Collaboration and Business Development Opportunities for Finnish Companies
A key element of the Finland-IFC Blended Finance for Climate Program is to strengthen collaboration opportunities between IFC and Finnish stakeholders. These activities include e.g. increasing Stop-Winlock’s visibility among Finnish private sector actors on business development opportunities in emerging and frontier markets; enhancing the know-how among Finnish private sector and sector-specific industries of procurement opportunities in IFC and World Bank Group projects; and building knowledge among Finnish stakeholders of business opportunities and financing potential especially in the BFCP sectors.
