BPNG Signs MoU with IFC and Securities Commission to Strengthen Sustainable Finance in PNG
November 13, 2024
The Bank of Papua New Guinea (BPNG), on behalf of the Green Finance Centre (GFC), has signed a significant Memorandum of Understanding (MoU) with the International Finance Corporation (IFC) and the Securities Commission of Papua New Guinea (SCPNG) for establishing the foundations of a thematic bond market in PNG and developing the next version of BPNG’s Inclusive Green Finance Taxonomy (Green Taxonomy).
Under this collaboration IFC will provide technical support to the GFC in developing the next version of the Green Taxonomy, initially prioritizing five specific sectors. The Green Taxonomy aims to provide clarity in defining what constitutes an investment green and sustainable. Additionally, under the MoU, GFC will coordinate with IFC to support SCPNG in establishing a Thematic Bond Framework for the capital markets of PNG. The thematic bond framework will be tailored to support green, social, sustainability, and sustainability-linked (GSS+) bonds that aligns to the Green Taxonomy. It is expected to attract investors who are committed to sustainable finance, accelerating essential climate-focused projects in order to create a resilient PNG economy. PNG aims to reduce its greenhouse gas emissions by 50% by 2030 and achieve carbon neutrality by 2050. Over US$1 billion will be required over the next 10 years to meet PNG’s Nationally Determined Contributions (NDC).
Governor of BPNG, Elizabeth Genia, highlighted the significance of this MoU, stating: “this partnership with IFC and the Securities Commission represents a critical milestone in our journey towards a climate-resilient and inclusive financial system. With such collaboration, we are positioning PNG as a leader in sustainable finance within the region. Together, we are building a future-ready financial sector that will support our country’s climate and development goals.”
Present at the MoU signing ceremony was Papua New Guinea’s Country Manager for The World Bank Group, Mr. Khwima Nthara who provided his assurance to the Governor of BPNG in his remarks by saying “You can count on our continued commitment and partnership. We’re also honored that Ms. Elvira Morella, is signing the MoU on behalf of IFC and chose PNG for her first country visit in her new capacity as Manager, Country Advisory and Economics for East Asia and Pacific. This highlights just how important PNG is to the IFC and the World Bank Group”.
By developing a sustainable capital market, the initiative will open pathways for private sector investments into projects that benefit local communities, promote sustainable development at grassroot levels, create green jobs and reduce PNG’s carbon footprint. It is expected that both key deliverables of the MoU, developing technical screening criteria for first five priority sectors under the Green Taxonomy and Thematic Bond Framework will be finalized within the Year 2025.
