The International Finance Corporation (IFC) has announced a significant green and sustainability-linked loan of €500 million to Engie, aimed at enhancing the company's renewable energy portfolio in emerging markets and facilitating its decarbonization efforts. This financing is also intended to support Poland's decarbonization goals and improve energy security in South Africa by promoting clean and sustainable energy solutions.
The loan features ambitious climate targets alongside innovative occupational health and safety commitments, according to IFC. It is co-financed by two other development finance institutions: the Asian Infrastructure Investment Bank (AIIB) and Société de Promotion et de Participation pour la Coopération Économique (Proparco). Additionally, the IFC is mobilizing capital from seven private credit insurers, marking its largest-ever credit insurance mobilization for a single client.
The €340 million in commercial and development capital mobilized by the IFC for Engie allows the company to diversify and expand its funding sources. Valérie Levkov, global industry director at IFC, noted the long-standing partnership between Engie and IFC, which has spanned nearly three decades and has led to landmark projects across various sectors and continents. She emphasized the importance of mobilizing private capital in response to global energy transition challenges, stating, “As countries around the world face energy transition challenges, we are actively mobilizing private capital and deepening our strategic ENGIE-IFC partnership so the company can further invest in clean, affordable, and reliable energy that is accessible to all.”
The new loan is structured around specific sustainable performance objectives aligned with Engie's climate targets, which include phasing out coal by 2025 in continental Europe and by 2027 globally. Engie aims to achieve a portfolio of 50 GW in renewable projects by 2025 and 80 GW by 2030, contributing significantly to climate change mitigation. The loan is expected to facilitate the development of 1.7 GW of renewable energy capacity by 2027, helping to avoid approximately 3.9 million metric tonnes of carbon dioxide equivalent (MtCO2e) emissions annually.
Adrien Koenig, group head of structured finance at Engie, highlighted the necessity of collaborative efforts from various stakeholders to accelerate the energy transition. He expressed gratitude for the IFC's contributions through this financing and pointed to the loan's innovative structure, which includes climate-related targets for scope 3 emissions and health and safety performance indicators for Engie employees and subcontractors.
This loan builds upon the IFC's previous $400 million financing for Engie Energía Chile in 2023, which aims to enhance the supply of clean energy to Chile's national electric system by transitioning from fossil fuel-based power generation to renewable sources. The partnership underscores IFC's commitment to advancing green energy solutions and supporting sustainable infrastructure development, facilitating the adoption of renewable technologies and promoting low-carbon growth to accelerate the global energy transition.
