bneGREEN: CEE surfs the green bond wave

 bneGREEN: CEE surfs the green bond wave
In Central Europe, Poland and Hungary have been the early pace setters on green bonds, while in Southeastern Europe Slovenia and Romania so far have the strongest track record.
By Robert Anderson, and bne IntelliNews reporters July 9, 2021

Europe has become the global leader in green and sustainable bonds, and now Central and Eastern Europe (CEE) is surfing the green wave.

The European Commission is counting on green bonds – bonds that finance environmental projects and/or have their coupon linked to environmental metrics – to mobilise private sector finance to help the bloc achieve its European Green Deal target of becoming carbon neutral by 2050.

Encouraging sustainable finance – covering wider environmental, social and governance (ESG) issues – is also central to the EU’s drive to “build back better” after the coronavirus (COVID-19) pandemic and bring the EU closer to the real concerns of its citizens.

As part of its Action Plan on Sustainable Growth, to give sustainable finance a more solid foundation, the European Commission has drawn up a common taxonomy to classify sustainable activities, together with benchmarks to measure their impact. This will prevent companies “greenwashing” their activities – making misleading claims about environmental benefits to lure unsuspecting ethically minded investors.

The Commission is also forcing larger companies to report how environmentally sustainable their activities are, so investors can check their claims against performance. It is also working on a European green bond standard.

“The EU Action Plan on Sustainable Finance will inevitably incentivise both public and private sector entities in the CEE to engage further with sustainable finance,” a European Bank for Reconstruction and Development (EBRD) official told bne IntelliNews in response to questions.

Globally, both green and sustainable bonds have taken off in recent years. According to a study by law firm Linklaters at the end of last year, a total of more than 680 green bond issuances were launched globally in 2020, raising a total of $227.6bn. Social bond issuances raised more than $163bn, more than 10 times the $13bn raised in 2019.

According to data from BloombergNEF, in the first five months of this year, $245.3bn in green bonds have been issued, $83.8bn in sustainability bonds and $129.2bn in social bonds. This compares with $91.44bn, $15.21bn and $27.87bn respectively over the same period in 2020.

Nevertheless, the Institute of International Finance estimates that ESG bonds still only account for 1% of the total outstanding bonds, although their share is growing fast.

The growth in issuance, however impressive, is consequently not keeping pace with the massive investor interest in ESG issues.

More than half of the money invested in European exchange-traded funds is flowing into vehicles that say they adhere to ESG principles, according to Bloomberg, and they often struggle to find sustainable assets to invest in.

According to data company Morningstar, investors put $54bn into open-ended and exchange traded bond funds specialising in ESG issues in the first five months of 2021, compared to $68bn in the whole of 2020. In 2020, assets rose 66%, compared with a 12% increase in assets for fixed-income funds overall. Nevertheless, ESG bond funds still only account for less than one-fifth of total sustainable fund assets, with equities far more developed.

“The greenwave as a proportion of the capital market is a fraction, but it is growing very fast,” Gianfranco Bisagni, head of UniCredit’s operations in CEE, told a capital markets panel at the EBRD annual meeting earlier this month.

In CEE, international financial institutions such as the EBRD, and pan-regional banks such as Austria’s RBI, have helped spread the green bond faith.

The EBRD, which has been issuing green bonds since 2010, has committed to raising the proportion of its green finance – investments that not only align with but actively promote the green transition – to more than 50% of the total by 2025. It is also engaged with institutions such as the Warsaw Stock Exchange and the National Bank of Romania in spreading best practice on sustainable finance.

Within the region itself, sovereign green bonds have often broken the ice. Many governments have seen them as a way of burnishing their environmental credentials as well as raising funds.

In Central Europe, Poland and Hungary have been the early pace setters, while in Southeastern Europe Slovenia and Romania so far have the strongest track record. Further east, Russia, Turkey, Georgia and Kazakhstan have all made significant issues. However, in many countries green bonds are still to get off the ground.

Once the sovereign has set the benchmark, this paves the way for state-owned companies, especially in the energy sector, and local banks to issue green bonds.

Today the market is widening and deepening, with other utilities and real estate companies joining the wave.

“Globally, we have seen a widening and deepening of the green and social bond markets, with different types of issuers, asset categories, degrees of transition, issuer credit quality and types of instrument (e.g. green, social, sustainable bonds as well as sustainability-linked bonds,” said the EBRD official.

“We’ve seen an equal widening and deepening in the CEE countries, and ESG linked funding in hard currency can provide access to deep international markets, which together with the regulatory impetus currently drives the evolution of the market,” they added.

The EBRD says green bonds can sometimes offer issuers a significant “greenium”, or green premium, through access to a wider pool of potential investors.

“Certainly, a robust green bond from issuers that are at the lower end of investment grade or even sub-investment grade can find significant investor interest that they would not find for their ordinary issuance, and that has allowed them both to increase the tenors at which they fund, as well as see an improvement in price,” the EBRD official said.

The EBRD highlights increasing product diversity, such as green covered bonds, as issued by ING in Poland; green Schuldschein by Schaeffler, with use of proceeds allocated to their operations in Hungary and Slovak Republic, and senior preferred green bonds, as listed by Raiffeisen Bank in Romania.

“As we progress, we expect increasing diversity especially when considering non-use of proceeds DCM tools such as sustainability-linked bonds,” the official said.

Social bonds, once the poor relation of green bonds, are now starting to take off too, though the metric is more difficult to measure and can be very sensitive.

“Many EM countries are happy to ask about ‘E’, or bundle up green bonds, but less willing to talk about ‘S’ and ‘G’, as very often they are failing in these areas and it’s politically sensitive to talk about it. It is also very subjective,” Tim Ash, senior EM analyst at BlueBay Asset Management, said in a note on May 27.

Bisagni of UniCredit says this is now starting to change. “We are expecting the highest relative growth in the ‘S’. It will be more important, especially in the recovery after COVID,” he told the EBRD panel.

However, Yerlan Syzdykov, head of Emerging Markets at Amundi Asset Management, added a note of caution, telling the panel that there is still a scarcity of ‘dark green’ assets (with an intended sustainability impact) in the region, especially in the high-yield and local currency segments.

He also cautioned that pricing was still pretty much on a par with traditional instruments in CEE and that disclosure on sustainability remains an issue.

“The lack of information and the lack of disclosure is an issue for us,” Szeyzdykov said, though he added: “CEE companies are definitely stepping up their disclosure.”

Below, bne IntelliNews reporters from around the CEE region round up the green bond scene in their countries:




In a PR coup, Poland issued the first ever sovereign green bond not only in New Europe but from any government: a €750mn bond in December 2016 with a coupon of 0.5%, which was used to finance a range of climate-related projects to meet its greenhouse gas (GHG) emission reduction targets and promote the country’s transition to a low-carbon economy.  

The bond was three times oversubscribed and the Ministry of Finance increased the offer from the originally mooted €500mn to €750mn because of the high demand.

“When Poland issued a green bond green investors made up two thirds of the demand, none of whom had invested in Polish sovereign issues before,” Kate Levick of the E3G climate change think-tank told the first CEE Sustainable Finance Summit in May.

On February 7, 2018 Poland issued its second green bond, which was priced at 23bp over the mid-swap curve, yielding 1.15%. Once again the bond was more than three times oversubscribed, with demand of €3.25bn that allowed the issued amount to be increased to €1bn.

With two sovereign benchmark green bonds in place it was only a matter of time before the corporates got into the game.

In 2017, Bank Zachodni WBK came to market with a $154m equivalent issue. That was followed in June 2019 by the banking giant PKO Bank Hipoteczny (PKO BH), which issued PLN250m (up from an initial PLN200m) of green covered bonds maturing in 2024.

The EBRD says Poland, together with Latvia, were the early adopters in issuing use of proceeds bonds. The most recent issuer was Poland’s state-controlled refiner PKN Orlen, which placed €500mn in green eurobonds on May 21, with over 200 investors racing in with subscriptions totalling €6bn. The seven-year bonds with a coupon of 1.125% are the fourth green eurobond by a Polish company.

Bonds were allocated to 182 investors from 26 countries, with the largest share held by investors from Germany, Austria and Switzerland, at 44% of the issue, and Poland at 23%.

Huge demand led PKN Orlen to reduce pricing twice, from the original level of 160-165 basis points, through 135-140 basis points to 125 basis points above the mid-swaps.

PKN Orlen will use the obtained funds to build and acquire new renewable energy projects, further development of the network of fast chargers for electric cars as well as charging infrastructure for hydrogen buses and cars, and development of waste recycling installations.

PKN ORLEN has pledged to reduce CO2 emissions by 20% from its refining and petrochemical operations and by 33% from electricity production by 2030.

As well as state-owned energy companies such as PKN, privately owned Polish companies from a broader range of sectors have started to issue green bonds. In February 2020, the Warsaw-listed media and communications company Cyfrowy Polsat raised a total of PLN1bn to refinance its investments in energy efficiency. The EBRD invested PLN200mn (€47mn) in the issue.


Hungary’s government debt manager AKK launched its first forint-denominated green bond issue on April 22, also Earth Day, to very strong demand, with a seven-to-one bid-to-cover ratio.

Demand was so strong that the debt manager upped its offer by HUF10bn (€27mn) to HUF30bn for the 30-year maturity bonds in the face of a whopping HUF141bn of total demand. The average yield was 3.69%.

The issue was a milestone for the Hungarian capital market, but also globally, as the issue became the world’s longest maturity green bond. The AKK sold a further HUF30bn on July 8, raising its original offer by HUF10bn.

Proceeds from the bond will be used to finance or refinance expenditures that promote the transition to a low-carbon and environmentally sustainable economy. At the same time, the goal of the green bond issue is to further develop sustainable domestic capital markets, strengthen investor diversification and extend the maturity of debt, AKK said.  

“We are trying to create the asset and hopefully this is a catalyst to the internal market,” Zoltan Kurali of the AKK told a panel on the future of sustainable finance at the EBRD’s Annual Meeting on July 1.

The debt manager plans to make green issues a regular thing, with another HUF90bn of green bonds in the works for this year, offered on a quarterly basis. Kurali said the AKK might do a renminbi issue soon.

Prime Minister Viktor Orban announced the launch of green bonds for financing climate-friendly programmes during his annual state of the nation speech in February. The government has subsequently issued a 15-year, €1.5bn green eurobond in June and JPY15.5bn of seven-year green bonds in September last year with a 1.957% yield.

However, the country is still lagging behind on sustainable issues by private companies.

Czechia and Slovakia

At the beginning of June, Raiffeisen Bank Czechia was the first bank to issue a green bond out of Czechia, which was also the first publicly syndicated non-preferred senior green bond in CEE, as well as the largest green bond for a CEE financial institution.

The Czech subsidiary was the Austrian RBI Group’s third green bond issuer this year, following Slovak Tatra Banka’s inaugural €300mn benchmark green bond in April and Romanian Raiffeisen Bank’s inaugural €80mn green bond in May. 

Tatra Banka’s issue, listed on the Bratislava Stock Exchange, was the first green bond issuance in Slovakia and the largest MREL-eligible instrument issued on the local market since the introduction of the EU Bank Recovery and Resolution Directive and the MREL guidelines in the country. The EBRD invested €30mn (a 10% participation) in Tatra Banka’s bonds. 

Later in June, Slovak bank Slovenska Sporitelna issued its first senior preferred green bond worth €100mn, which was subscribed by local and international investors, including the EBRD, and placed on the Bratislava Stock Exchange.  

In February, Czech-based logistics property developer CTP issued its third green bond with a nominal value of €500mn, a coupon of 0.75% and a six-year maturity, following its debut issuance (€650mn) in September 2020. Its second, €400mn, green bond issue was carried out in November 2020. CTP’s inaugural green bonds became the largest debut issuance by a CEE real estate company.  

CTP joined another real estate company in Czechia, CPI Property Group of Czech billionaire Radovan Vitek, which issued €750mn of senior unsecured green bonds in May 2020. 

Baltic states

Latvia’s Latvenergo was the first state-owned enterprise in CEE to tap the green bond market when in 2015 and 2016 it made an issue of €100mn.

This June Latvenergo successfully placed €50mn worth of green bonds, as part of a €200mn green bond programme, with the EBRD acting as an anchor investor.

The funds will be used to renovate the company's distribution network, and partly finance the rehabilitation of three hydropower plants (HPPs) in Latvia. The investments will contribute to integration of more renewable sources into Latvia's electricity network, especially small and medium-sized solar and wind projects, as well as increasing the reliability of the country's energy supply.




Russia has already issued five green bonds, but there are plans for many more.  

Russia’s first green-certified bond was issued in December 2018 by Siberian waste management company RSB KHMAO and was used to finance a waste management concession project.

The nominal value was RUB1.1bn with an initial 10% coupon that was thereafter calculated at the Russian consumer price index in annual terms plus 4.5% or the key rate of Bank of Russia + 1.5%, depending on which was higher. The bond was listed on the Moscow Exchange (MOEX).  

However, the first big green bond that was available to international investors and opened the door to the green bond business in Russia was issued by Russian Railways (RZD) in May 2019 and this was the first Certified Climate Bond in Russia.

RZD, a leader on ESG in Russia, has been actively working on developing a green bond framework prepared in accordance with the requirements of the International Capital Market Association’s (ICMA) Green Bond Principles 2018 as part of its wider borrowing programme. The value of the bond, which matures in 2027, was for €500mn and it has an annual coupon rate of 2.2%. RZD said it would use the money to acquire electric locomotives for both cargo and passenger transportation.

The bond was issued in the same month as the Russian government adopted a support scheme for bonds issued to finance investment in renewable and environmentally friendly technologies, as part of the Ecology national project that is one of 12 programmes designed to transform the economy. 

Companies issuing green bonds and meeting a number of localisation criteria are able to get from 70% to 90% of the coupon payments on the bonds rebated by the state. A total of RUB9.3bn ($142mn) is granted for the programme by 2021, with the bond placements to be capped at RUB30bn.

Discounting green bonds forms only a part of a larger ecological drive undertaken by the government. As detailed by bne IntelliNews, in the planned Russian state infrastructure spending drive RUB701.2bn will be allocated from the federal budget for the implementation of the National Ecology Project, with another RUB133.8bn from the regional budgets. Another RUB3.2 trillion is supposed to be raised from investors for the Ecology programme.

Since then RZD has issued two more green bonds: one last year for CHF250mn that matures in 2026 and has a 0.84% annual coupon; and a perpetual CHF250mn bond with a coupon of 3.125% issued in March this year.  

Now the ice is broken, the number of green bond plans are proliferating, although the only other green bond actually issued so far was by Center-invest Bank in November 2019, which was the first listed on the Moscow Exchange’s Sustainability Sector.

Now the regions are starting to get into the game. The City of Moscow is reported to be the first Russian region to issue green bonds to finance ecological and environmental projects. Moscow has announced that it intends to issue a significant amount of green bonds as part of its RUB400bn ($5.4bn) borrowing programme in 2021, and the share of green bonds could reach 60% of the total, analysts believe. The demand for Moscow’s green paper is expected to be high, as this would be the first issue of sub-federal green bonds in Russia.  

Most recently, green bond issues have been put on the federal agenda after Russian President Vladimir Putin promised that the Ministry of Finance would start issuing green bonds at the St Petersburg International Economic Forum (SPIEF) to fund the 12 national projects, most of which will tick ESG boxes as they have goals to improve social and environmental problems.  

The large-scale upgrade of infrastructure, including energy infrastructure, needs “market stimulation, and authorities will float government-subsidised green bonds for this purpose,” Putin told the assembled businessmen and investors at the forum.  

"We start floating green bonds subsidised by the state and developed performance criteria of environmental projects, or the so-called ‘green taxonomy’, as experts say," the Russian leader said.  

Russia ratified the Paris Accords in 2019 and, after a slow start, the Kremlin has ramped up its efforts to green the Russian economy since the start of this year.


Ukraine has been talking about issuing green bonds and has the perfect candidate. In an effort to wean the country off expensive and politically charged Russian gas imports, the administration of President Petro Poroshenko offered very generous green tariffs for investors willing to build renewable power facilities and kicked off a boom that drew in some $5bn of foreign direct investment (FDI) into the sector.

However, the cash-strapped government of Ukraine’s President Volodymyr Zelenskiy ran into problems and, unable to pay the $1.1bn of charges it ran up from the green power, has retroactively reduced the tariffs and negotiated with the power producers on paying off the debt.

The sector is approaching a crisis, as many of the companies producing green power had borrowed money to build their facilities, but without revenues they were unable to service their debt.

Ukrainian Prime Minister Denys Shmyhal directed the finance, energy and economy ministries to draw up plans to raise the missing money in January through the issue of green bonds.

But confusion reigns. Ukraine’s 2021 state budget does not explicitly foresee an issue of any state debt to repay the accumulated green energy arrears, which is not to say it will not happen. But the government already has a heavy debt repayment schedule of $20bn of obligations to meet this year and a dysfunctional IMF programme, so paying off its green power debt is just one of many problems to be resolved.




Slovenia, where protection of the environment is part of the national identity, was the first country in the Southeast Europe region where a green bond was issued. More recently, in June, it became the first sovereign in the wider CEE region and the second in the EU to issue a sustainability bond. Slovenia successfully issued its debut 10-year sustainability bonds worth €1bn on June 23. 

Books closed in excess of €8.4bn, with demand from more than 210 investors, which the finance ministry said was "a strong sign of the confidence that institutional investors have in Slovenia, and particularly in its role in financing environmental and social transition".

“The proceeds from Slovenia’s sustainability bond will fund government investments that contribute positively to the republic’s environmental and social goals, and further promote and develop the domestic and international green, social and/or sustainability bond market,” the statement added.

Earlier, in December 2018, SID Bank became the first Slovenian lender to issue green bonds, getting away a €75mn green bond private placement on the international capital market. Demand for the bonds totalled €172mn. 

The bonds are intended for green projects in the areas of renewable energy sources, energy efficiency, the prevention and control of pollution, the environmentally sustainable management of living natural resources and the use of land, clean transport, the sustainable management of water and waste water, products adapted for an environmentally efficient and/or circular economy, production technologies/processes and green construction, the bank said. 

“Through new innovative forms of financial instruments we aim to provide the economy in particular with greener projects and technologies, which will ensure that Slovenia remains a green oasis of Europe. To that end, we ensure cost-acceptable conditions and profitability, which promotes investments in new business models for the economy. The issue of our first green bonds represents an important step in that direction,” said Sibil Svilan, president of SID Bank’s management board.


There have been several sizable corporate green bond issues in Romania as the leading companies there hope to tap the growing pool of ESG-conscious investors.  

Raiffeisen Bank, the Romanian subsidiary of the Austrian group, placed its second green local currency bond on June 4, with a maturity of seven years and a fixed annual coupon of 3.793%, approximately 0.8pp above the yield on government securities in lei with the same maturity. The RON1.2bn (€0.24bn) size makes it the biggest ever corporate bond in Romania.

The bond issue was addressed to institutional investors, who placed orders of RON1.35bn 1.35 times more than the amount initially announced in the opening of the private placement. The bonds are to be included in the bank's own funds and eligible debts, after the prior confirmation of eligibility by the National Bank of Romania.  

"The funds attracted through these bond issues will be directed to green projects that meet the eligibility criteria defined in the bank's green bond framework," said Romulus Mircea, director of balance sheet and portfolio management at Raiffeisen Bank. 

"We are talking about investments in the development and renovation of the fund of green buildings, renewable energy, increasing energy efficiency, greening transport and last but not least, sustainable agriculture. Also, the bonds are going to consolidate the bank's own funds and eligible debts base, creating the premises for the sustainable development of our portfolio of green assets,” Mircea added.

Raiffeisen's first green bond, worth RON400mn, also a first for the Romanian banking sector, was listed on the Bucharest Stock Exchange (BVB) on May 27. It has a five-year maturity, a fixed coupon of 3.086% – approximately 0.5pp over the yield of government securities with the same maturity and issued in leu. With a demand of almost RON650mn, Raiffeisen's five-year green bond was oversubscribed almost 1.6 times.

Romania's biggest office owner, Globalworth, also successfully issued its inaugural green bonds offering of €400mn notes due 2026 in August last year. The bonds offer an annual return of 2.95%. The issue represents the inaugural green bond offering of Globalworth under its €1.5bn medium-term notes programme (MNTP), according to Globalworth's green bond framework established in 2020.

The Bank for Trade and Development of the Black Sea (BSTDB), the international financial institution established by 11 countries in the Black Sea area, including Romania, announced that it had subscribed to €35mn of Globalworth's €400mn green bond issue.

And more recently MAS Securities, the financing arm of MAS Real Estate, a property investor in Central and Eastern Europe with a focus on Romania, announced in May the issue of a €300mn unsecured green five-year Eurobond maturing on May 19, 2026, carrying a 4.25% fixed coupon, with an issue price of 98.903%. The EBRD said it had successfully subscribed to a €24.7mn ticket as part of the issue.

The bond issue, used to finance and refinance green commercial real estate in CEE, is underpinned by a green financing framework aligned with the ICMA’s Green Bond Principles and the Loan Market Association’s Green Loan Principles.


Turkey’s leading white goods maker Arcelik claimed the country’s green bond milestone at the end of May. It issued the first-ever Turkish corporate green bond on the international markets, with the notes listed on the Euronext Dublin Stock Exchange.

The issue has a nominal value of €350mn, with a five-year maturity, and a redemption date of 27 May 2026. The bonds were priced at 3% with a coupon rate of 3%.

Arcelik said it intended to use the bond to finance its “eligible green projects”, including energy-efficient, eco-efficient and circular economy adapted products, and the promotion of energy efficiency in production. In addition, proceeds will fund the company's sustainable water and wastewater management, pollution prevention control, renewable energy and green buildings initiatives.

Polat Sen, CFO at Arcelik, said: "We are thrilled to announce the issuance of our corporate green bond. The bond will help re-inforce Arcelik's ESG [environmental, social and governance] credentials and enable us to put sustainability at the centre of our business, to ensure that we are continually aligned with our vision, Respecting the World, Respected Worldwide.”

On June 14, the EBRD announced that it was reinforcing its position as a leader in green finance and as a strong supporter of capital markets by investing $50mn in a green bond issued by major Turkish lender QNB Finansbank.

The bonds have a three-year term and are aligned with the ICMA’s Green Bond Principles and the Sustainability Bond Guidelines. QNB Finansbank will use the proceeds to finance internationally certified green building projects in its portfolio.

In mid-May, a Treasury official briefed Bloomberg that Turkey is developing a legal framework allowing it to sell bonds abroad based on ESG goals. The Turkish Treasury and Finance Ministry reportedly intend to finalise arrangements by the end of the year.

Turkey could sell the ESG bonds during 2021, depending on market conditions, the official was further reported as saying. The Treasury would be able to offer the debt in various currencies, some of which would be linked to wind farms and other projects that promote carbon-free living.

“As with most EM sovereigns, likely more focus on ‘E’ than ‘S’ or ‘G’ [in ‘Environmental, Social, Governance’,” Timothy Ash at BlueBay Asset Management said in a note to investors responding to Turkey’s ESG bond move.




Investment group Georgia Capital carried out the country’s debut in the green bond world with an inaugural $250mn green bond offering in July last year of the group's renewable energy holding Georgia Global Utilities (GGU).   

The senior unsecured dollar-denominated 7.75% green notes have a five-year non-call two-year bullet maturity.  

The proceeds will be used to refinance all existing loan arrangements of GGU and finance capital expenditures in the water supply and sanitation business. The notes were listed on the Global Exchange Market of the Irish Stock Exchange and were rated B+/stable by Fitch Ratings and B/positive by Standard & Poor's.

Georgian Railway, the state-owned integrated railway transport company, joined the green bond party in June with a benchmark $500mn green bond, with a 4% coupon and maturity of seven years. The Asian Development Bank (ADB) and EBRD invested a combined $70mn in the issue, which was listed on the London Stock Exchange.

The bond reflects the company’s commitment to compliance with the ICMA’s Green Bond Principles 2018 (GBP), under which Georgian Railway will publish a green bond allocation and impact report annually on its website until a full proceeds allocation to green projects under the category of “clean transportation” and in the event of a material change.


The largest Armenian universal bank Ameriabank issued the country’s first ever green bond in November last year. Armeriabank said on November 27 that the bond for the equivalent of $50mn was issued in close co-operation with long-time partner the Dutch Entrepreneurial Development Bank (FMO), which served as the anchor investor in the issue. The green bond was structured in accordance with internationally recognised ICMA Green Bond Principles (the GBP), it added.

Artak Hanesyan, CEO of Ameriabank, said in a press release: “We are delighted to announce that Ameriabank has successfully issued the first-ever green bond from Armenia. Funding raised via green bonds provides an unrivalled opportunity to play an essential role in financing green projects that contribute to environmental sustainability.”


Kazakhstan’s Damu Entrepreneurship Development Fund issued the country’s first ever green bonds on the Astana International Exchange (AIX) with the support of the United Nations Development Programme (UNDP) last August.

The green bond initiative was carried out within the framework of a joint project between UNDP and the Ministry of Energy of Kazakhstan dubbed “De-risking renewable energy investment in Kazakhstan”, funded by the Global Environment Facility (GEF). The proceeds were then used to finance the construction of a micro solar power plant in Kazakhstan’s Turkestan Region.

The Astana International Financial Center (AIFC) is an active participant in the development of a green taxonomy mechanism in Kazakhstan and launched the AIFC Green Finance Centre in 2018. The centre has also ratified the principles of the green investment framework of the BRI.

Multinational development bank the Asian Development Bank (ADB) issued the first two green bonds on the Kazakhstan Stock Exchange in November last year.  

The move adds Kazakhstan to the list of nations where the bank issues bonds denominated in local currencies as an alternative for investors, who tend to rely on international lenders.  

The ADB raised KZT13.96bn (€27.4mn) via two 24-month bonds. The proceeds from the issuance will be used to finance climate change adaptation and mitigation projects in the Central Asian nation.

The KZT10.09bn (10.1%) and KZT3.87bn (10.12%) bonds were both snapped up by Kazakh banks and institutional investors, the ADB said.


Uzbekistan has only recently reopened to the world since Uzbek President Shavkat Mirziyoyev took over in 2016, but it is rapidly transforming and as part of its capital market reform plans it too is planning to issue green bonds.

The government announced a green debt sale that would also be marketed as a sukuk in June last year, in a package that would appeal to the Islamic financial world.

Atabek Nazirov, director of Uzbekistan’s Capital Markets Development Agency, said the new green and Islamic debt issuance could help the mainly Muslim country raise money from local and international borrowers while also deepening its financial markets. In order to establish a legal framework for the project, Nazirov is currently working with the Islamic Development Bank and the United Nations Development Programme (UNDP).

Further reporting by Wojciech Kosc in Warsaw, Linas Jegelivicius in Vilnius, Clare Nuttall in Glasgow, William Conway in Prague and Ben Aris in Berlin.