The commitments made by emerging market governments in the area of climate change mitigation and adaptation imply that substantial investments will need to be undertaken over the coming decade. Investments will be concentrated in the area of low-carbon energy infrastructure, industry and residential property. The financing required for such investments will be well in excess of the resources available from budgetary funds and inflows of development finance.
Policy makers in emerging markets therefore acknowledge that private sector investment, from both local and international financial markets, will need to play a key role in funding the needed low-carbon transition. This will require greater incentives for local banking systems, which are the predominant source of finance, to withdraw from exposures to climate risk and seek financing opportunities related to climate goals. However, only bond markets offer the type of finance required for infrastructure projects, given the larger scale of individual financing transactions and the long-term maturity offered by a diverse set of investors.
This report presents the experience with the use of green bonds to fund low-carbon energy infrastructure and other climate-related projects in the five countries of the European Union Eastern Partnership (EaP), including Armenia, Azerbaijan, Georgia, Republic of Moldova and Ukraine as well as Kazakhstan. It draws on detailed assessments in the reviewed countries. In addition to individual country analyses, the report contains a regional comparative overview chapter that summarises the main findings and conclusions from the country analyses.
Read the report.