The World Bank Group (WBG) on Friday said it expects to issue at least 1 billion U.S. dollars a year in green bonds to support private sector investment in climate-friendly industries.

"Climate change is one of the most urgent development challenges of our time, and only markets can mobilize the investment necessary for mitigation and adaptation," said Cai Jinyong, CEO of the International Finance Corporation (IFC), the WBG's private investment arm.

"We are ramping up our Green Bond program to meet the growing demand for this asset class and enable investors to support climate-smart investment in developing countries," said Cai, adding that the project is aimed at renewable energy, energy efficiency and other green sectors.

Proceeds from the bonds are earmarked for projects that reduce greenhouse emissions, for example, by rehabilitating power plants and transmission facilities, the IFC said in a statement.

Green bonds, also known as climate bonds, are a relatively new asset class. The IFC has issued 2.2 billion dollars in green bonds since 2011.

According to the International Energy Agency, 5 trillion dollars of investment is needed worldwide by 2020 in renewable power, energy efficiency and cleaner transportation to contain rising global temperatures.

The United Nations estimates that 80 percent of the capital needed to address climate change will come from the private sector. Endi

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