Green finance market in Kazakhstan

The purpose of this analytical report is to examine and analyse the green finance market in Kazakhstan in order to inform the private sector, government agencies, and the general public on the market’s status, trends, and structure, as well as the opportunities for attracting financing for green projects through the issuance of green finance instruments.

Kazakhstan has enacted strategic papers on the transition to a green economy and low-carbon development, as well as a legal framework for the functioning of green finance market. At the legislative level, incentives have been implemented for small and medium-sized enterprise issuers in the form of loan rate subsidies for implementation of green projects, coupon rates subsidies for green bonds, and green bond guarantees.

Green bonds and green loans of approximately KZT 150.2 billion were issued on the Kazakh market in more than 3.5 years of existence. International and local financial institutions, as well as energy businesses, are the primary market drivers.

One of the main objectives of the Astana International Financial Centre (AIFC) is to encourage the country’s long-term economic growth, including attracting long-term investments for transition to a low-carbon economy and developing a supporting financial ecosystem.

The main green financing instruments are green bonds and loans, the proceeds of which are used to finance environmentally sustainable projects, and which comply with internationally recognised standards in the field of green finance, such as the Green Bond Principles of the International Capital Market Association and the Climate Bonds Standard of the Climate Bonds Initiative in case of certification. It is recommended to obtain an independent external review for recognising a bond or loan as “green”.

The AIFC Green Finance Centre is the country’s leading independent external review provider for green financial products, with the AIFC Green Finance Centre (GFC) assisting in the issuance of almost 60% of green bonds and loans in the country. Furthermore, the Centre ensures development of policies and instruments for sustainable financing and is actively involved in the development of the country’s legal and methodological framework for sustainable financial instruments. The GFC is currently working on creation of new green products and mechanisms that can expand opportunities for issuers in the country to attract financing for green projects.

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