The World Bank and IFC should create incentives and mobilize resources to support effective pilot, demonstration, and technology transfer projects that have a clear logic of demonstration and diffusion. This will include mobilizing Global Environment Fund and other concessional funds to mitigate World Bank borrower risk; reshaping incentives for staff and managers; providing adequate resources for the design and supervision of complex projects; and making available specialized expertise in technology transfer and procurement through a real or virtual technology unit.
Original Response: IFCs clean-tech investment practice will be housed in the newly-created Climate Business Group. CLEANTECHNET is a practice group that meets virtually and in person to share knowledge and issues in the technology space.
Climate Business Group's CleanTech Unit strategy for promoting clean technology in IFC investments in place
Notable increase in IFC's investments with clean tech over the next three years
Staff in Climate Business Group's CleanTech Unit to be recognized for demonstrated special efforts in technology transfer, diffusion, and procurement
The Early Stage Investment Program, approved but not yet fully in place, exemplifies one of IEG's suggested approaches to technology diffusion: venture-capital type investment in commercially viable but locally pioneering companies with good prospects for growth. Continued recruitment of specialized technology staff, including a 'smart systems specialist, is a step in the right direction. IEG's evaluation stressed know-how not just in technologies, but in how to encourage the widespread diffusion of those technologies. IFC's work in green buildings, and particularly in promotion of building standards, moves in this direction.
IFC's inclusion of climate-related commitments in the department scorecards has boosted attention to climate, but the focus on money rather than results can distort efforts, especially when the dollar amount is difficult to attribute.
To address innovation and technology diffusion on a sector level, the Cleantech Investment Unit commissioned extensive review of technologies and business models in energy storage, LED lighting, and building automation. These led to engagements with leading sector and created pipeline for investments and/or innovative financing facilities.
To further scale investments in innovation, in March 2013 the Corporate Operations Committee approved the Early Stage Investment Program (ESIP). Recommendations include a $250 million investment envelope, specialized approval process, and modifying booking method along with incentives. ESIP will streamline existing work by the Cleantech Investment Unit, which as of December 2012 invested $170 million in 17 companies. Presentation is available at https://ifcicollaborate.ifc.org/docs/DOC-54112
In addition, as of FY14 the Cleantech Investment Unit has been integrated into the new IFC department - Telecom Technology (CTT). This new structure expands the unit's resources and increases the unit's visibility within the organization, allowing it to expand its reach in clean technology and gain further commitment from its joint-venture partners (MAS, Infra, Financial Markets).
Moving forward, IFC's focus in demonstration will be around new renewable energy technologies such as solar PV, and in the telecom center, particularly green data centers and RE power for mobile towers. In cooperation with the World Bank, we are also piloting a variety of interventions aimed to reduce the exposure of farmers to weather vulnerability.
To make available specialized resources for climate work, a team of technical specialists was created, including a Smart Systems specialist for technology transfer projects, as well as specialists for energy efficiency, wind, solar, waste, water, and climate finance. The unit also manages knowledge management tools and events, such as monthly Climate Digest, Intranet, and Briefings. See more at https://ifcicollaborate.ifc.org/community/ifc/climate_business
In order to help with complex projects, resources for tracking and reporting were developed and disseminated internally and externally parties. See https://ifcicollaborate.ifc.org/community/ifc/climate_business/tracking…
In order to mobilize concessional finance more effectively, portions of the IFC Blended Finance Unit which deal specifically with climate change will report directly to the Director of the Climate Business Department.
To reshape incentives, climate targets are now a part of IFC department scorecards. HR is preparing Team Performance Awards for innovative or impactful climate-smart projects. Progress toward target is tracked on a monthly basis and shared with Operational Directors quarterly.
At the end of FY13, IFC surpassed its impact target for greenhouse gas reduction (IDG6) by 25% - out of targeted 4.9 million tonnes of CO2 equivalent, IFC investments reduced emissions by 6.12 million tonnes CO2 equivalent.
Implementation Status: Active (To be made Inactive)
IFC did not provided additional information on the status of this recommendation in 2014. IEG still still uphold its previous comments made in 2013. The Early Stage Investment Program, approved but not yet fully in place, exemplifies one of IEG's suggested approaches to technology diffusion: venture-capital type investment in commercially viable but locally pioneering companies with good prospects for growth. Continued recruitment of specialized technology staff, including a 'smart systems specialist, is a step in the right direction. IEG's evaluation stressed know-how not just in technologies, but in how to encourage the widespread diffusion of those technologies. IFC's work in green buildings, and particularly in promotion of building standards, moves in this direction. IFC's inclusion of climate-related commitments in the department scorecards has boosted attention to climate, but the focus on money rather than results can distort efforts, especially when the dollar amount is difficult to attribute.