In line with its commitments to tackle climate change, Azerbaijan's banking sector is set to focus on financing activities listed in the country's green taxonomy, the Central Bank of Azerbaijan (CBA) told Report.

"Loans provided under this framework aim to fully or partially finance or refinance green projects. Green projects refer to those that meet the criteria specified in the green taxonomy, as approved by the CBA Board's decision dated November 7, 2024," the Central Bank stated.

The CBA further clarified that the main difference between green loans and other loans is that they are intended solely for financing projects in sectors and meeting criteria outlined in the green taxonomy.

Sectors to be financed under the green taxonomy include renewable energy, energy efficiency, sustainable water resource management, pollution prevention and control, sustainable agriculture and farming, biodiversity and conservation, circular economy and waste management, green buildings and sustainable construction, and green services.