The World Bank’s International Finance Corp and UK government will back a private-equity fund with about $154 million to invest in companies that are developing technology to tackle climate change.
The IFC board approved as much as $75 million and the UK 50 million pounds ($79 million) for the fund, the IFC, based in Washington, said today in a statement.
The IFC Climate Catalyst Fund LP will invest in companies working on technology to curb emissions and increase resource efficiency, according to the statement. The fund aims to entice further private money into climate projects by reducing the risk of investing in emerging markets, the IFC said.
Governments are trying to spur private investment to help provide the $38 trillion that the International Energy Agency says is needed by 2035 to meet energy demand. Two-thirds is needed in countries outside the Organisation for Economic Co- operation and Development, according to the Paris-based IEA.
“For too long the power of the private sector has been forgotten in the fight against global challenges,” Andrew Mitchell, international development secretary, said in the statement. “Climate change affects us all but it will hit the poorest the hardest.”
The fund will hold a portfolio of private-equity funds overseen by emerging market managers, as well as directly co- investing in young companies, the IFC said.
