Central Bank of Azerbaijan ready to allocate huge funds for green transition   Chairman says

Chairman of the Central Bank of Azerbaijan (CBA) Taleh Kazimov has said that Azerbaijan's banking sector may allocate huge funds to support green transition projects till 2030.

“This commitment will demonstrate the banking sector's dedication to climate action, including financing renewable energy, sustainable infrastructure, and other green initiatives,” he said, Caliber.Az reports via local media.

"We plan to announce a global initiative for harmonising taxonomy in collaboration with our international partners, and this issue will be discussed at COP29," he noted.

The chairman added that the CBA plans to organise two thematic events on Financial Day at COP29.

"The first event will focus on increasing climate finance and will bring together leaders from both the public and private sectors to discuss progress on large-scale climate investments, additional efforts from international financial organisations, and multilateral development banks. The aim is to mobilise funds to support the green transition at the scale required to achieve the goals of the Paris Agreement," he said.

Referring to the World Bank Group’s Country Climate and Development Report for Azerbaijan, Kazimov highlighted that decarbonisation in Azerbaijan will require $24.7 billion till 2060, while building resilience will need additional $19.4 billion. 

"Some investments should come from the private sector, with a significant share provided by public financial sources. Financial institutions, especially banks, can play a crucial role in mobilising and directing resources toward green and sustainable projects. As key drivers of economic growth, banks are essential in developing climate finance. Our financial institutions are gradually adapting their business models to support the transition to a low-carbon economy," he noted.

He said that the main policy goal of the CBA is to direct financial sector investments towards the green transition. 

"Azerbaijan is currently renewing its Nationally Determined Contributions [NDCs], with new targets expected to be set. This will represent another important step in the fight against climate change. Achieving these renewed NDCs will require significant investments," he added.

The shift towards a green, ecologically sustainable economy is essential. A sustainable economy relies on low-carbon solutions that support biodiversity and ensure the responsible use of natural resources.

The transition to clean energy is a vital component of the green transition. The main goal is to phase out fossil fuels and replace them with clean, renewable energy sources.

The green transition is necessary because current economic growth depends on the excessive consumption of natural resources, which is unsustainable. The loss of biodiversity and the impacts of climate change bring significant economic costs. By embracing the green transition, it is possible to accelerate emissions reductions, mitigate climate change, protect and enhance the environment.

By Naila Huseynova