What works to build green? Three lessons from our evaluation of the Market Accelerator for Green Construction (MAGC)

As the world gathered for the COP30 climate conference, a fundamental question remains: how do we unlock the trillions in finance needed to meet our climate goals? The building and construction sector, responsible for nearly 40% of global energy-related CO2 emissions, and for 21% of the global GHG emissions, is key for this challenge. With most new construction set to occur in emerging economies, accelerating the transition to green buildings is as urgent as ever.

At a COP30 side event hosted by the World Bank Independent Evaluation Group Evidence 4 Climate Action (E4CA), Ipsos had the opportunity to present key findings from our independent evaluation of the International Climate Finance (ICF) Market Accelerator for Green Construction (MAGC). A joint initiative by the UK’s Department for Energy Security and Net Zero (DESNZ) and the International Finance Corporation (IFC), MAGC aims to accelerate green building markets across 24 emerging economies. The programme is a multi-component intervention engaging mainly with financial institutions and the construction industry, providing support through concessional finance, advisory and capacity building, green building certification, and evidence generation.

As the independent evaluators for this multi-year programme, our role is to provide evidence-based insights into what's working, what's not, and why. Our interim evaluation, which involved a tiered analysis across 24 countries, 95 stakeholder interviews, and five in-depth country case studies (Colombia, India, Kenya, South Africa, Vietnam), gives us insights into the early outcomes of this programme. Here are three key takeaways.

1. MAGC is successfully accelerating a nascent sector by tackling both supply and demand.

Our first key lesson addresses the “how” of market acceleration. We found that a key factor of MAGC’s success is its holistic, “whole market” approach. Through its financial component, the programme is structured to support financial intermediaries to increase the offer of finance towards green construction, to benefit both supply (incentivising developers to build green) and demand (enabling banks to offer attractive green finance products, like mortgages, for buyers).

But our evaluation shows that the programme’s outcomes go beyond individual deals with banks and also relate to improving the enabling environment. Through its other components, the programme builds capacity in the private and public sector and supports green building certification, helping to develop a pool of skilled professionals for the green building sector, and contributing to a more favourable regulatory landscape. MAGC is making it easier for developers to enter the green building market, in terms of awareness, capacity and building the skills they need.

We have seen more and more technical competent people [on the EDGE certification] in the green building field that are accessible to us to hire if we need, so it's easier now to have in-house capabilities to perform our services, this was not possible a few years ago.

(Certification company)

The growth of green buildings in MAGC countries has been significant, with EDGE certification coverage reaching 65 million m² in nine MAGC countries in 2024, exceeding initial targets of reaching 51 million m² from a baseline of 18 million m² in 2021. 

However, our fieldwork also confirmed that key barriers remain. The high upfront cost of green materials and the limited awareness and demand for green buildings among residential buyers were consistently highlighted as persistent challenges across the countries considered.

A key learning is that to accelerate a nascent market like green buildings, a holistic approach is working well: financing projects while simultaneously building the ecosystem around it, addressing supply, demand, and the enabling environment.

2. The combination of advisory and concessional finance is key to mobilisation.

Our second lesson is about the success factors for mobilising finance. A headline result from the programme so far is its significant mobilisation of climate finance. With $56 million of UK public funding, MAGC has helped unlock $1.8 billion in finance for green construction. This finance includes IFC’s own account lending alongside other private capital.

The evaluation explored success factors that facilitated this leverage. Our evidence shows that across different countries, a critical factor was the combination of advisory services (mainly trainings for banks’ staff) and financial support to financial intermediaries, and particularly its sequencing. What worked best was when advisory came first, to tackle the awareness and knowledge barriers within banks, followed by blended finance to de-risk the transaction. As a senior manager at a partner bank told us,

I can say that wherever we are today in terms of green initiatives at our company, it is due to the advisory we have received from the IFC [through MAGC]. That encompasses everything, I believe. Without it, we wouldn’t have obtained even a single certificate, and our teams would not have been trained towards it, if not for this advisory.

(Financial intermediary)

Our evaluation shows that there are still knowledge and institutional capacity gaps in the wider market beyond MAGC supported institutions. They still perceive the risks as too high or lack internal capacity. But we are seeing early, encouraging signs of transformation. For example, banks starting to proactively reach out to the IFC for support and showing interest to enter the green building market.

A key lesson for the climate finance community is that programmes with the objective of finance mobilisation should consider advisory as a combined and foundational activity that can really help unlock investment and confidence among local partners.

3. MAGC demonstrates the potential - and the challenge - of balancing mitigation with social co-benefits.

Finally, our evaluation explored how a climate mitigation programme can deliver important social co-benefits. Green buildings are traditionally built for high-income households. Conscious of this, MAGC provides powerful examples of how climate finance can be intentionally steered to address affordable housing. While social inclusion considerations were not included in the programme’s original design, affordable housing has become an increasingly important objective for the programme, and our evaluation has been able to extract key learnings on co-benefits. We found that several deals were specifically structured to make green housing affordable, such as by reserving a dedicated amount for affordable housing in India or designing green mortgages that pass incentives on to end-beneficiaries in Peru.

A key challenge remains in communicating the benefits of green buildings (such as lower utility bills) to end-users, which is critical for making housing truly more affordable. Green buildings have the potential to improve living standards for marginalised groups, but the opportunity for a programme like MAGC to realise these benefits highly depends on context.

Overall, MAGC is pointing to a clear and powerful model for market acceleration:

• Tackling both supply and demand barriers for green buildings.
• Recognising that financial intervention is most powerful when it is preceded by advisory support.
• Pursuing social objectives alongside emissions reduction.

As the international community tries to close the climate finance gap, these lessons from MAGC offer a success story from the built environment, with potential learning also for other sectors where finance is needed to advance climate action.

To learn more about the programme, please visit the International Climate Finance and the MAGC programme websites. To learn more about Ipsos’ work in policy evaluation and climate finance, please visit our website on evaluation and energy and environment research.