The delegation of the Kyrgyz Republic visited Mongolia as part of a study tour: “Mongolia’s experience in creating a “green” financial corporation: key players and issues of promoting green finance”

Posted July 4, 2022

The Kyrgyz delegation in Mongolia

30 June 2022 / Bishkek, Kyrgyzstan – The delegation of the Kyrgyz Republic has finished its visit to Mongolia, as part of the study tour "Mongolia's experience in creating a "green" financial corporation: issues of promoting sustainable financing" that was held on June 21-24 in Ulaanbaatar (Mongolia). The event was organized under UNDP’s PAGE programme activities in Kyrgyzstan in partnership with the Global Green Growth Institute (GGGI) of Mongolia by the direct initiative of the leadership of the Ministry of Economy and Commerce and the Union of Banks of the Kyrgyz Republic with the active participation of the Ministry of Finance of the KR as well as local commercial banks and microcredit organizations.

Green finance plays an important role in achieving carbon reduction policies and can be the driving force behind the transition to a carbon-neutral economy. As part of the implementation of Nationally Determined Contributions (NDCs), by 2030, Kyrgyzstan has committed to reducing emissions by 15.97% through domestic resources and by 43.62% with international support. According to the statement of the President of the Kyrgyz Republic at the Conference of Parties (COP) in Glasgow, with international support, Kyrgyzstan will strive to reach the platform of carbon-free green development by 2050.

The main goal of the study tour was to develop a partnership between the stakeholders of the two countries in matters of sustainable green finance, improve better understanding of the topic by studying the Mongolian experience, raise awareness of the delegation members and express commitment to the development and implementation of sustainable finance initiatives in the Kyrgyz Republic by improving regulatory legal acts as well as ensuring implementation of existing practices, models and solutions in the financial sector of the Kyrgyz Republic.

“Participation in the study tour on sustainable green finance in the framework of promoting the principles of the Green Economy in the Kyrgyz Republic was a necessary and useful initiative. I believe that each member of the delegation received valuable information that will be useful in their work. Soon, we plan to actively promote projects on the principles of sustainable financing and the green taxonomy project in Kyrgyzstan,” said Ashyrov Ermek, Head of the Strategic Planning Department of the Ministry of Economy and Commerce of the Kyrgyz Republic.

For a significant increase in green investments, an effective transition to sustainable banking and financial practices, financial institutions require a national system of sustainable financing, considering ESG aspects, social and environmental risk assessment, which should provide appropriate socio-economic incentives and benefits to support investment in green projects.

To facilitate the attraction of "green" investments from external sources and the consolidation of local resources, to implement the tasks set for mitigation and adaptation to climate change in various sectors of the Kyrgyz economy, the Ministry of Economy and Commerce, the Ministry of Finance and the Union of Banks of Kyrgyzstan began work on the development of the National financing mechanism (NFV) for sustainable projects. This work is being implemented with the support of the Partnership for Action in Green Economy (UNDP / PAGE) and the Global Green Growth Institute (GGGI). This partnership will be built in close collaboration with the Ministry of Natural Resources, Ecology and Technical Supervision of the KR, the National Bank of the KR and the State Service for Regulation and Supervision of the Financial Market under the ME of the KR.

The creation of a national financing mechanism in the form of the Green Financial Corporation was laid down in the Action Plan of the Cabinet of Ministers of the Kyrgyz Republic approved on 13 January 2022 for the implementation of the National Development Program of the Kyrgyz Republic by 2026, as part of the main task of introducing green financing tools.

At the moment, in Kyrgyzstan, with the support of UNDP / PAGE, a draft Roadmap for Sustainable Finance in the Kyrgyz Republic was developed, IFC experts were also involved in this process, including the expertise of the Sustainable Banking and Finance Network (SBFN), where our country is represented by the Union of Banks.

“The exchange of experience made it possible to better understand the process of creating the National Financing Frameworks - the Mongolian Green Finance Corporation, as well as their plans to develop green finance and increase the share of green loans in the portfolio of the banking and non-banking sectors. The trip undoubtedly exceeded all expectations and gave us hope and faith that we will be able to put what we saw in Mongolia into practice in the financial sector of the Kyrgyz Republic, and somewhere, perhaps even surpass the results. We would like to express our gratitude to the organizers and all members of the delegation for their professionalism and well-coordinated teamwork,” shared the representatives of Aiyl Bank OJSC Urmat Kerbenbaev and Maksat Akakov.

Photos from the event can be viewed here.

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This learning experience became possible with the financial support of UNDP in the Kyrgyz Republic under the PAGE project, which brings together the expertise of 5 UN partner agencies, 20 partner countries (including Kyrgyzstan), 8 funding partners and cooperation partners to conduct environmental and cyclical economic transformations to achieve the SDGs by creating an enabling environment for sustainable finance, including through green recovery.