• Energy subsidies: 

The project will be constructed on the analysis of “Energy subsidies in the EaP countries” recently conducted by the OECD as part of the EU-funded EaP GREEN project and will focus on the reform of tax expenditures (or tax revenue foregone due to special tax exemptions, deductions, tax rate reductions) which are more difficult to account for and are often overlooked in the subsidy debate.

• Greening public expenditures:

The proposed activities will widen an application of tools developed in 2017-18 to help government authorities responsible for environmental and public finance management to design green public investment programmes in line with good international practices. The existing tools that will be used to include the OECD Council Recommendation on Good Practices for Public Environmental Expenditure Management, as well as costing tools and targeted training material on managing green public investment programmes at the national and/or sub-national level developed for Kazakhstan, Moldova and Kyrgyzstan. The specific activities will include two additional country-level projects on the costing of priority climate-related public investment programmes within government authorities and improving the leveraging effect of public funds and the effectiveness of sector and budget support from donors, where available.

• Financing climate-resilient infrastructure in EECCA:

This work will identify the priority steps needed to scale up financing for the adaptation of infrastructure to climate change effects, focusing on the mainstreaming of adaptation requirements into investment processes rather than the provision of infrastructure specifically intended for adaptation. Specific work could include reviewing approaches to: understand and characterised climate risks to the focused country; possible methodologies available for economic and financial analysis; and choose relevant adaptation measures to be taken to make infrastructure resilient to climate change.

• Role of monetary and banking policy in green lending:

This work will analyse the role monetary and central bank policies can play in motivating commercial banks in the countries of the region to increase their lending for green investments. Given that there is very little knowledge about and experience with working with central banks in the target region, this project will be innovative and will aim to establish the baseline of the extent to which green banking regulations are a realistic option for the Eurasia region. The envisaged activities will include analysing the potential role of monetary policies and macro-prudential financial regulation in commercial banks’ lending strategies and the expansion of credit directed towards low-carbon projects and businesses and organising a regional meeting with the participation of all countries of the region, including representatives of Ministries of Finance, central banks and commercial banks but also other relevant actors in the market.

• Annual conferences on green finance and investment:

Lessons learnt from the activities carried out under this areas will be summarised and discussed with relevant national and international stakeholders at annual regional conferences which will involve government officials from Ministries of Environment, Economy, Finance and Energy of the EaP and Central Asia countries, representatives of International Finance Institutions and multilateral financing facilities active in the region, International Organisations and donor countries. Experts from commercial banks and other domestic financing institutions, as well as academics, consultants, officials from green/climate related initiatives, NGOs will also be invited to take part in the debate. The preparation of the conferences will be based on experiences gained from the 1st International Conference: Unlocking Private Finance For Energy Efficiency And Greener, Low-Carbon Growth organised by OECD and the EU on 29-30 June 2017 in Brussels with the support of the EU (EaP GREEN) and Germany (IKI).

• Review of selected national funding entities:

This work will provide interested national funding entities with evidence based analysis and policy recommendations to enhance their capacity in appraisal and implementation of green projects as well as reduction of various project-related risks and transaction costs. Activities will include:

• • Review of selected national public funding entities’ practices and capacities for providing and mobilising green finance in two to three interested countries. Such analysis will include: reviewing criteria for identifying and selecting investment projects; reviewing project appraisal rules and procedures; management practices, expenditure plans and disbursement mechanisms; de-risking financial instruments and mechanisms that can be provided; and/or possible business models to provide green finance.
  • Review of approaches to blending public and private resources and leveraging private sector capital in a cost-effective way can help stimulate more demand for green investments. This will include analysis of the feasibility of establishing a special-purpose “green investment bank”, or refocusing activities of existing public financial institutions to mobilise private investment in green infrastructure.