Kazakhstan’s new environmental code to prioritize green financing
Green financing will become one of the priorities of the new Environmental Code. Kazakh authorities will give preference to projects, which help reduce environmental pollution and improve environmental situation in the country as a whole. Astana International Financial Centre explained what innovations await those who will promote the projects for the benefit of nature. Specialists initiated their offers to the new law. For example, it now involves such concepts as green financing, green bonds, green loans and others. Moreover, a mechanism for subsidizing the coupon interest rate on green bonds and percentage rate on green loans will start working now under the State Program “Business Roadmap-2025”. According to Chief Strategy Officer at AIFC Green Finance Centre Aigul Kussaliyeva, entrepreneurs will receive subsidized interest rates on loans and bonds up to 50 percent. She noted that starting this year, the country will support the so-called green projects more actively.
“Currently, the AIFC Management together with the state agencies conduct the work on developing by-laws, which determine these measures in greater detail. They include the rules for the Business Roadmap-2025 that, in turn, involve subsidies. The program implies the implementation within the Business Roadmap-2025 for the next five years. Initially, approximately 5 percent of Damu Fund’s total portfolio will be green, that is, 5 percent will be aimed at the green projects. We expect that this share will grow and reach 7-9 percent,” said Aigul Kussaliyeva, Chief Strategy Officer at the AIFC Green Finance Centre.
The AIFC Green Finance Centre developed the taxonomy, a kind of classifier of green projects to make the mechanism work as efficiently as possible. Simply put, this is a list of requirements to determine the degree of projects’ “greenness”. Those who meet all the criteria will receive subsidies for the implementation of business ideas. The loans will be issued by second-tier banks. The innovations will take effect from July 1.