Over the last two decades, international financial institutions have made significant efforts to support investment in climate and environment related sectors in the countries of the EU Eastern Partnership (Armenia, Azerbaijan, Georgia, Moldova, and Ukraine) and Central Asia (Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan). A growing focus of international support has become the objective to create instruments that address key investment risks, including policy risks, financial (e.g. cost and availability of capital) and technical risks as well risks related to the lack of capacity and awareness among both financial institutions and borrowers.
Prudent use of public capital can help reduce such risks. Risk mitigation measures, employed by public entities to improve market conditions for investors, can support greater financial flows into the green economy. De-risking can be achieved through a range of measures such as concessional debt, public equity, guarantees and currency hedging as well as technical assistance programmes.
The report presents analysis of the risk mitigation instruments offered by public entities, particularly international, available for the countries of the EU Eastern Partnership and Central Asia and the role these instruments play in helping unlock and further mobilise private capital for green investments. Given the large number of financial sources and instruments, the report helps the reader navigate the complex landscape of the green international financing architecture and its specific de-risking tools. This report focuses mostly on financial de-risking instruments, such as concessional debt financing, public equity, guarantees, investment anchoring and currency hedging as well as technical assistance programmes.
Read the report.