Azerbaijan's banking sector is prepared to allocate substantial financial resources to support green transition projects until 2030, said Taleh Kazimov, Chairman of the Central Bank of Azerbaijan (CBA), Report informs.

This commitment demonstrates the banking sector's dedication to financing climate action, including renewable energy, sustainable infrastructure, and other green initiatives, Kazimov stated.

He added that another crucial issue is the finalization of the National Green Taxonomy of Azerbaijan: “In this regard, the Central Bank actively cooperated with public and private institutions and created an expert group. The Green Taxonomy has already been prepared with the technical support of World Bank experts.”

The chairman noted that public consultations involving key stakeholders such as government agencies, industry associations, financial institutions, investors, international development partners, and representatives of micro, small, and medium enterprises (MSMEs) have recently concluded. The next step is to submit the taxonomy to the government for approval, which is expected to be finalized soon.

“Finally, taking into account that this topic will be discussed for the first time at the COP, we plan to announce the global Taxonomy Adaptation Initiative together with our global partners."

Kazimov also pointed out that the CBA plans to organize two thematic events during the COP29 Finance Day: “The first event will focus on increasing financing for climate action, bringing together public and private sector leaders to discuss progress towards large-scale climate investments and additional efforts by international financial organizations and multilateral development banks. This will further mobilize funding to support the green transition on the scale required to achieve the goals of the Paris Agreement.”

Referring to the World Bank Group's Country Climate and Development Report for Azerbaijan, Kazimov highlighted that Azerbaijan needs to spend $24.7 billion on decarbonization, and $19.4 billion on sustainability by 2060.

"A part of these investments should be provided by the private sector and a significant part from public financial sources. Financial institutions, especially banks, could play a key role in mobilizing and channeling resources to green and sustainable projects. As a key driver of economic growth, banks play a crucial role in the development of climate finance. Our financial institutions are gradually changing their business models to support the process of transition to a low-carbon economy," the chairman emphasized.

According to him, Central Bank’s key political goal is to direct the financial sector’s investments to the green transition.

"Currently, Azerbaijan is updating the Nationally Determined Contributions (NDC), and new targets are expected to be determined as the next stage in the field of climate change. Achieving the updated NDCs will require huge investments," he added.