Kazakhstan’s AIFC aims to promote Green Investment Principle among financial institutions in Central Asia

Kazakhstan Materials 7 December 2021 08:00 (UTC +04:00)
Kazakhstan’s AIFC aims to promote Green Investment Principle among financial institutions in Central Asia

BAKU, Azerbaijan, Dec. 7


The Green Finance Center of AIFC (Astana International Financial Center) aims to promote the GIP (Green Investment Principle) among financial institutions in Central Asia, AIFC told Trend.

According to AIFC, given the importance of mobilizing financing from the private sector, the new Environmental Code of Kazakhstan, adopted on January 2, 2021, contains norms that encourage enterprises to use green financing instruments.

"As part of the adoption of the Environmental Code of Kazakhstan, the AIFC submitted draft accompanying norms to the Entrepreneurial Code of Kazakhstan, which clarify measures of economic stimulation of business using green loans and green bonds. This includes subsidizing credit and coupon rates for the implementation of green projects. Currently, as part of the implementation of these data measures of financial support, amendments and additions were made to the Business Support and Development Program "Business Road Map-2025", through which the above mechanism will be implemented," the AIFC said.

It is also noted that the AIFC Green Finance Center is currently working on the implementation of a national green taxonomy in Kazakhstan.

"Green taxonomy is a unified system of classification of economic activities, categories of projects and assets, aimed at improving the efficiency of using existing natural resources, reducing the negative impact on the environment and increasing energy efficiency. To fully implement this mechanism, the AIFC Green Finance Center together with the International center for green technologies and investment projects completed the development of a green taxonomy, which is at the final stage of approval by the government of Kazakhstan," the AIFC said.

In addition, the organization noted, the AIFC Green Finance Center, together with the United Nations Environment Program Finance Initiative (UNEP FI), is working on the development of ESG (Environmental, Social, and Corporate Governance) reporting guidelines for AIX-listed (Astana International Exchange) companies.

It is expected that voluntary ESG disclosure requirements will be introduced in the short term and mandatory ESG disclosure requirements in the medium term. An ESG structure can be targeted at mandatory disclosures by large and public companies on a comply-or-explain basis.

"In June this year, the AIFC Green Finance Center became the regional office of the Green Investment Principles for the Belt and Road Initiative (GIP) in Central Asia. The GIP was adopted with the aim of creating an international network to improve the environmental risk management of investments under the Belt and Road Program. In this regard, the Center will promote the GIP among financial institutions in Central Asia, conduct capacity-building activities through the GFLP (Global Green Finance Leadership Program) platform, help develop a database of green projects, and scale-up sustainable financing in the region," the AIFC concluded.