Paving the Way for Green Finance Development in Central Asia
Report introduction
The region of Central Asia, whose economy greatly relies on fossil fuels-related economic activities, is going through deep and rapid sustainable transition. The financial sector in Central Asia will have to play a bigger role in order to accelerate green transition through providing sufficient financial support.
The report <Paving the way for green finance development in Central Asia>, prepared by BIFS, aims to take a closer look at the development and performance of green finance in Central Asia. This report develops a 4 pillar-framework, including sustainability policies and commitments, central bank regulations, institutional framework and green finance market mechanisms to examine the status of green finance progress and analyzes regional best practices from Kazakhstan, Mongolia and Pakistan.
Recognizing the current obstacles faced by Central Asian countries in developing an active green finance market, this report proposes the following recommendations to enhance green finance capabilities in the region:
Establish “Sustainability policy toolkits” to provide financial incentives for green investments.
Structure a top-down regulatory approach. Taking into account the recommendations of NGFS, the development of portfolio management guidance and green activities definition will provide detailed methodology instructions to financial institutions.
Set up institutional framework and network for coordination, mainly through exploring possibilities of establishing powerful coordinating institution as national champion and engaging stakeholders from international donor organizations through sustainable finance networks.
Enhance capacity-buildings by engaging multiple stakeholders and identifying key market players to reach out.
Develop inclusive finance by making taxonomy/guidance, involving NGOs and developing innovative finance products.
This report hopes to provide a basis for better understanding for policymakers, regulators and financial market players in Central Asia.
Full version of the report:
Paving the way for green finance in Central Asia.pdf