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AIFC GREEN FINANCE CENTRE
Workshop on Supporting Asia-Pacific LLDCs and Bhutan in Mobilizing Resources for the SDGs
Development of green financing in Central Asia
Aigul Kussaliyeva
Thimphu, BhutanDecember 12, 2018
AIFCNOW A FULLY-FLEDGED
FINANCIAL CENTRE
2
2018
2017
2016
2015
• The legal and regulatory framework commenced on January 1, 2018.
• Astana Financial Services Authority, AIFC Court andInternational Arbitration Centre are successfullyestablished.
• AIFC Authority signs the agreements with ShanghaiStock Exchange and Nasdaq Inc. to create a newstock exchange in Kazakhstan.
• AIFC Bureau for CPD and AIFC Expat centre areestablished to provide the favorable environment forthe best talent.
• AIFC Management Council determines the AIFC development strategy and the structure of AIFC bodies.
• AIFC Authority provides the organisational support toother AIFC bodies.
• The Constitutional Statute of the Republic of Kazakhstan“On the Astana International Financial Centre” providesthe legal basis for the establishment of the AIFC.
• The establishment of the AIFC is part of the “100 Concrete Steps” Plan of the Nation aimed at deliveringfive institutional reforms.
CORE PILLARS OF THE AIFC DEVELOPMENT
Capital market
Increasing domestic Capital Market liquidity and attracting more foreign investments
Asset Management
Asset management of private and state funds by
established international asset
management companies within
AIFC
Private Banking
Developing Private Banking expertise
on the basis of based within AIFC international asset
management companies
Islamic Finance
Creating local Islamic Finance
market supported by local,
international Islamic banks &
financial institutions
Financial Technologies
The introduction and development
of Financial Technology to
companies improve efficiencies and decrease costs
Green Finance
Promoting green financing
instruments
KAZAKHSTANEastern Europe and Central Asia
SDG Index and Dashboards Report 2018
SDG 2. Zero hunger
SDG9. Industry innovation and infrastructure
SDG12. Responsible consumption and production
SDG16. Partnership for the goals
2.0% than region average
LATENT VULNERABILITIES
Source: Energy Information Administration, National Bank of Kazakhstan
0%
2%
4%
6%
8%
10%
12%
0
20
40
60
80
100
120
2004 2006 2008 2010 2012 2014 2016
% GDP$/bbl Oil Price (lhs) GDP Growth (rhs)
Energy consumption per unit GDP, (PPP, 2005 US$)Nominal GDP growth relative to oil price, 2004-2017
4000
6000
8000
10000
12000
14000
16000
18000
2005 2006 2007 2008 2009 2010 2011
BTU
per
US
D G
DP
Kazakhstan OECD
Economy deeply entangledwith fossil fuels
High energy intensity negativelyimpacts competitiveness
CURRENT ASSESSMENT OF KAZAKHSTAN SDG DASHBOARD
STRATEGIC DOCUMENTS ON GREEN ECONOMY Environmental code
Strategy for the development of the Republic of Kazakhstan until the year 2050
Concept on the transition of the Republic of Kazakhstan to a green economy
Other sectoral programmes, strategies and plans
AIFC Strategic documents on Green finance
Concept of building a Green finance system in Kazakhstan
Strategy of AIFC regional leadership in green finance until 2025
KAZAKHSTAN DEMAND FOR GREEN FINANCING
Until 2030, up to
US$155 billion in fully or partially green infrastructure investments needed to reach the NDC and GEC targets
In recent years, green investment from climate investment funds and Global Environment Facility (GEF) has accounted for about one-third of green investments in Kazakhstan
As climate finance needs increase significantly, domestic sources and international capital markets have to play a bigger role
APPETITE FOR GREEN FINANCE: SURVEY RESULTS
Illustrative 104 interviews at Astana Economic Forum in 2017: 29 domestic, 75 international
About 50% of investors already have experience with green investment in Kazakhstan, almost all are interested for future
13% say market appetite for green finance in Kazakhstan is high, 35% say moderate
50% mentioned green bonds as most attractive financial instrument
Key barriers identified: regulatory risk insufficient policy incentives lack of green finance expertise immature financial markets
High-tech platform of the Astana International Exchange
Unique in the CA region AIX Green Bond Rules based on Green Bond Principles
Favourable doing business conditions for the AIFC participants: tax exemption for financial services, England and Wales’s law
Green Finance Centre is created to promote and develop green finance in Kazakhstan and in the region
AIFC FACILITIES FOR DEVELOPING GREEN FINANCE
AIFC GREEN FINANCE CENTRE BUSINESS REVIEW
Goals
Introduction of new instruments of green financing
Introduction of new facilities for green financing / investing
Capacity building
Encouragement and support of green finance market players
Development of green market (production, finance, knowledge)
Enhancement of KazETS
Functions
Drafting policies and amendments on green finance instruments to Kazakhstan’s legislation
Preparing reports, surveys, studies, researches on demand and supply of green finance in Kazakhstan and the region
Training and certification of specialists
Project support, starting from preparation of investment project up to post-issuance MRV
CORPORATE BOND MARKET OF KAZAKHSTAN
Issuers and investors
Number of issuers
‐ quasi-state companies
‐ private non-financial companies‐ private financial companies
‐ quasi-state companies
‐ private non-financial companies‐ private financial companies
*excluding the program of financial support of the banking sector
** 1USD = 369,98 KZT, as of 07.12.2018, www.nationalbank.kz
Share of main categories of investors, %
Attracted funds from investors, bln. KZT**
UAPF
Individuals
Broker-dealers
Second tier banks
Other legal entities
Other institutional investors
CAPACITY BUILDING
Annual Green Growth Forum
- Sessions- AIFC Green Finance Advisory Council meetings- Green Finance Awards
Seminars and meetings
- Joint seminars and roundtables with partners to explain the process of the green bond issuance - World Investor Week
Trainings
- AIFC Bureau for CPD programs - CBI trainings
SEMINARS & MEETINGS
Contacts:
8 Kunayev street, Emerald Quarter BCB Block, Astana, KazakhstanCall centre: 8 800 080 08 01Fax: +7 (7172) 61 36 62
www.aifc.kzwww.greenfinance.kz
THANK YOU FOR YOUR ATTENTION
