In light of the recent discussions at the World Economic Forum in Davos, Switzerland, where topics such as climate change, corporate social responsibility and corporate governance dominated, how can the AIFC comment on the opportunities provided by the Centre in the field of sustainable development including new for the country green finance?
The agenda of the World Economic Forum highlights the most pressing issues that are shared by governments, businesses and local communities. This year’s focus on topics that will affect future generations long after the forum has ended is a testament to the forward-looking vision of the stakeholders in the global economy. Kazakhstan, as a country and as a player in regional and international economic integration processes, understands the challenges faced by world leaders and is contributing its part in finding solutions to the problems. As such, the first president of the Republic of Kazakhstan, Nursultan Nazarbayev, initiated the creation Astana International Finance Centre, a separate jurisdiction for an ecosystem that effectively serves as the gateway to the local and regional capital market and thus fosters economic and social development.
AIFC created a specialised Green Finance Centre whose activities revolve around green finance. This means creating the necessary conditions for the mobilisation of private capital for green projects and sustainable business models. It is one of the main priorities of the Republic of Kazakhstan to diversify away from the dependence on fossil fuels and our mandate, as the Centre is to become the driver for the transition to a green economy. In fact, Kazakhstan aims to increase its share of alternative and renewable energy to 50% of all energy production by 2050, an ambitious goal to say the least.
Green financial instruments such as green bonds, green loans, carbon trading are the driving forces that will finance the next wave of renewable energy and energy efficiency, environmental improvement, reduction of industrial pollution, clean transportation initiatives, climate change mitigation, reforestation, carbon footprint reduction and zero-carbon strategies.
Green bonds are a component of the capital market that come as an extension of the range of financial instruments and, therefore, opportunities offered to investors, mostly international, given that the green agenda is well developed in Western Europe, North America, and is gaining momentum in Southeast Asia. AIFC keeps pace with the times and pays attention to the development of green finance on its platform.
The newly established AIFC Green Finance Centre has the aim of developing and promoting green finance in Kazakhstan and the Central Asian region. The Green Finance Centre provides initial assistance to potential issuers, investors and market players on preparations for the issuance of green bonds on Astana International Exchange.
Together with world-renowned international experts we are working on green taxonomy, which will serve as the basis for further development of green financing. The detailed classification will become common and understandable language for all participants of the financial system, as it meets the requirements of investors to determine the essence of the project, as well as for the government and financial regulators to define and stimulate green financial flows.
Our work has already been recognized by the leading advocates of the green finance industry, namely, the Climate Bond Initiative who are our official partners. We also continue to work closely with the European Bank for Reconstruction and Development on creating the Green Financial System for Kazakhstan.
The AIFC is an innovative platform, and we are at the forefront of not only the discussion and action of sustainable development but also are fostering the other key topics covered in Davos. Financial technology, Islamic Finance, capital markets, asset and wealth management are all of extreme importance to the successful implementation of Kazakhstan’s five institutional reforms. The AIFC has the most advantageous position for private capital, acting as a convenient platform from which to act on growing market needs. The AIFC is ready for the future now.Related Topics