In a new step to support Kazakhstan’s path towards a greener economy, the European Bank for Reconstruction and Development (EBRD) is launching a study that will assess the potential of developing a green financial system for the country. A system of this kind would boost financing for “green” projects in Kazakhstan and beyond and would be based within the forthcoming Astana International Financial Centre (AIFC).
The AIFC is currently being developed in Astana, the capital of Kazakhstan, with the aim of becoming a financial hub for the immediate region and beyond. The EBRD is acting as one of the advisers to the AIFC Authority, the entity in charge of the centre’s development, on issues including green finance.
The scoping study, which will be available at www.greenfinance.kz, will look at ways of addressing major environmental challenges in the country, using market-friendly tools. In line with the EBRD’s Green Economy Transition (GET) approach, the study will assess demand for green investment, including financial products such as loans and bonds. The research will also identify regulatory gaps and barriers.
The results of the study are due be presented at the 2017 Expo in Astana, which will focus on the theme of “Future Energy”.
Jan-Willem van de Ven, EBRD Head of Carbon Market Development, said: “A green financial system will help raise awareness and increase the involvement of the financial sector, in particular the private sector, in the delivery of green projects in Kazakhstan and more widely in Central Asia.”
Kazakhstan has set itself ambitious goals to cut greenhouse gas emissions under the Paris COP21 climate agreement, and to raise the share of renewable energy in its total production to 3 per cent and 10 per cent by 2020 and 2030, respectively. To help the country achieve these goals, the EBRD has earmarked €200 million for renewable energy projects in Kazakhstan, with signings of specific renewables projects expected in the near future.
Aida Sitdikova, EBRD Director for Energy and Natural Resources in Russia, the Caucasus and Central Asia, said: “The EBRD is already attracting climate financing from global climate funds and other financiers into Kazakhstan, including under the new framework. A green financial system could make renewable energy projects in the country even more attractive to independent private developers.”
The EBRD is already the largest renewable energy financier in Kazakhstan, as well as in its entire region of operations. The Bank has invested nearly €1.5 billion in green projects in Kazakhstan and cooperated extensively on regulatory reform and the country’s innovative carbon-trading scheme.
The Kazakh authorities have expressed strong commitment to the national strategy of a green economy, including a green financial system. President Nursultan Nazarbayev has remarked publicly on the need to develop green financing tools. Kairat Kelimbetov, the Governor of the Astana International Financial Centre, has stressed Astana’s interest in becoming a hub for green finance.