DUBAI- The International Finance Corporation, the private sector arm of the World Bank, expects to invest up to $300 million in green bonds, mainly in the financial sector, in the Middle East and North Africa by 2020, a director at the organisation told Reuters in an interview.

IFC is participating in a $150 million green bonds programme by Fransabank, the fourth-largest Lebanese bank.

On Thursday Fransabank become the first bank in the Levant to issue green bonds, which raise capital for projects with environmental benefits, when it announced the first sale of $60 million.

Global green bond issuance hit a record $155.5 billion in 2017 and is tipped to surpass that level in 2018. They are becoming an increasingly popular source of borrowing for emerging market banks, with National Bank of Abu Dhabi launching the Middle East's first green bond in 2016.

"We want to do more in this region and we are in discussions with a few banks in Egypt, Jordan and Lebanon and there could be more issues in the 2018 calendar year," said Mouayed Makhlouf, IFC director for the Middle East and North Africa.

"If all develops well, we could reach $200 to $300 million in the next couple of years within this space in the region."

IFC is an anchor investor in Fransabank's programme, investing $45 million in the first issuance of $60 million. It has board approval to invest another $30 million in the programme. The European Bank for Reconstruction and Development is contributing $15 million, marking its first debt project in Lebanon.

Fransabank said the proceeds from the bonds will help provide financing to eco-friendly projects in commercial energy efficiency, renewable energy and green buildings.

Lebanon's greenhouse gas emissions have risen by 28 percent since 1994. The project will help cut these emissions by at least 6,000 tonnes per year by 2022.

Last year, more than 50 percent of IFC's funding in the Middle East and North Africa went to climate-related activities, more than in any other region, said Makhlouf.

(Reporting By Tom Arnold, Editing by William Maclean) ((mailto:Tom.Arnold@thomsonreuters.com; +97144536265; Reuters Messaging: rm://tom.arnold.thomsonreuters.com@reuters.net))