GCF Green Finance Readiness Armenia

GCF Green Finance Readiness Armenia

Armenia is recognized as one of the most climate vulnerable countries in the region of Europe and Central Asia. Such a vulnerability creates clear risks for the country’s economic and social development. This is well-reflected in the ambitious climate agenda and the Nationally Determined Contribution (NDC) of Armenia under its commitment to the United Nations Framework Convention on Climate Change (UNFCCC) and Paris Agreement.

In this context, the Armenian government also considers a further enhancement of the NDC by defining a more ambitious set of targets and by making them more actionable. In particular, this aims at strengthening the existing institutional capacity, and more importantly, enhancing the financial mechanisms available in Armenia. The government of Armenia plans to significantly scale up the availability and volume of green finance instruments in Armenia and to secure a more pro-active participation of the private sector in implementing interventions in climate adaptation and mitigation domains.

The Armenian government has already been taking decisive steps towards the establishment of green finance infrastructure in the country with the assistance of international partners. For instance, in 2019 the European Union’s new regional EU4Climate Initiative and the EBRD’s Green Economy Financing Facility (GEFF) programme, developed and co-financed with the Green Climate Fund (GCF), were launched in Armenia.

Thanks to these initiatives and those of other DFIs, a number of financial institutions in Armenia have become beneficiaries of international green credit lines and have been providing green financial products to businesses and households, locally. Government promotion, increasing awareness and available green financing have enabled growing presence of green product vendors.

As a key element of the Armenian government’s strategy to promote an enabling framework for introducing environment resilient practices, green finance has been gaining momentum as a core element of an innovative and sustainable financing toolset to move Armenia onto a more sustainable development path. In recent years, in line with the international trends and the commitments undertaken for example in Paris in 2015, the Armenian government has increasingly focused on providing support for investment in clean and resource-efficient products.