The International Finance Corporation is looking to develop a guarantee facility for private investors to boost finance for greener construction in emerging markets, as growing populations, urbanization and industrialization are set to  spur pollution far beyond safe limits.

IFC, the world’s largest global development institution focused on the private sector in low-income countries, is working with its counterparts in the World Bank Group to “create a one-stop shop for guarantees offered to private investors,” Susan Lund, vice president for economics and private sector development, told Bloomberg in an interview. We have “really high aspirations to scale that up dramatically for climate finance and in particular for green buildings and decarbonizing the construction sector,” she said.

Lund’s comments follow a recent speech given by World Bank President Ajay Banga who said the bank is working to better unify guarantee insurance across the institutions.

The IFC typically provides commercial financing priced at market rates. The planned facility would see IFC “put up money for guarantees and then also raise donor funding for a blended concessional finance,” Lund said. 

In a report released Wednesday the IFC identifies a $1.5 trillion investment opportunity to cut emissions in the building sector in emerging markets. Global construction value chains account for about 40% of energy and industrial-related CO2 emissions globally, with that number set to increase by about 13% by 2035, the IFC study finds. Two thirds of these emissions come from emerging markets, which also depend on construction activity for economic development.  

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