The International Finance Corporation (IFC) has issued a $1 billion (£644m) green bond to support clean energy projects in developing countries around the world.

The three-year bond, believed to be the largest green bond issued to date, will provide financing for renewable energy, energy efficiency and other climate-friendly projects. The IFC claims the size of the current bond will address the demand “from an increasing number of investors” interested in climate-related opportunities.

A Green bond is the capital used to tackle climate change and protect the natural world and is believed to be an effective way to give energy developers access to low-cost debt. IFC green bonds support projects to cut greenhouse gas emissions by rehabilitating power plants and transmission facilities, installing solar and wind power and providing funding for new technologies for emissions reductions.

Jingdong Hua, IFC VP and Treasurer said: “IFC is ramping up its climate-related investments because the private sector can play a leading role in addressing climate change. Through its Green Bond Program, IFC enables large-scale investors to support projects related to climate change in developing countries.”

The IFC, a member of the World Bank Group, invested $1.6 billion (£1.03) in climate-related investments last financial year and 70% of its investments in the power sector involved energy efficiency and renewable energy. The Corporation aims to double the investments to around $3 billion (£1.9bn) per year in the next two to three years.