Shortlisted proposals

SDG Finance Accelerator

Country
Kazakhstan
Region
Europe and Central Asia
Cluster
Natural Ecosystems and Climate Action
Status
Shortlisted proposals

Financials

Prepatatory Funding (USD)
120,000
Estimated Leverage (USD)
120 mln

Proposal

Challenge

Kazakhstan is not currently on track to fulfill its climate aspirations and commitments of reaching 10% renewable energy by 2030, and 50% by 2050. Green investment in Kazakhstan has been estimated at 1/40 of the amount needed to achieve its Nationally Determined Contributions (US$9-11 billion). Low oil prices have hindered public revenues, placing stresses on the national budget, causing depreciation of the naional currency and resulting in higher inflation.  Now, the COVID-19 pandemic has prompted a recession with recorded job losses across all sectors, especially in SMEs. To progress and kick-start a recovery, Kazakhstan needs to move beyond reliance on state funding and  mobilize commercial financing at scale. Still private-sector financing remains prohibitively costly and inaccessible for most companies, especially those in nascent sectors.


Innovation

The SDG Finance Accelerator will mobilize low-cost commercial financing, largely through green and SDG bonds, for green investments, directly addressing the barriers of high cost and low accessibility. Green investments will lead to GHG reductions and other SDG impacts at scale. In partnership with the national entrepreneurship fund, Damu, and the Astana International Financial Centre, the Accelerator will subsidize interest rates and pre-investment costs for qualifying projects, thus reducing risks for both borrowers and lenders. The bonds' proceeds will support qualifying green projects either directly or through commercial banks' lending.


UN Implementers


undp-logo
UNEP Logo

Partners


IGTIC
AIFC
National entrepreneurship fund DAMU

SDG Impact

Over 150 green businesses, impacting at least 1,200 employees, will access affordable capital. As a result 5 million tons of CO2 emissions will be avoided within the project's four year lifetime.




Latest

Clusters

Resilient Infrastructure

This cluster scopes, innovates and adapts financing solutions that leverage public and private resources for resilient infrastructure. Resilient infrastructure establishes or upgrades water systems, waste management, technology upgrades, renewable energy systems and circular economy solutions.

Resilient infrastructure is not only about building roads or bridges or power plants, but it also addresses the fundamental needs of people, enabling them to live a dignified life. Infrastructure faces increasing risks from natural disasters and a changing climate, leading to systemic failures that result in people being unable to go to work or receive timely medical care or education. These disruptions caused by natural and man-made hazards, as well as poor maintenance and mismanagement of infrastructure, cost at least USD $390 billion a year in low- and middle-income economies.

The need to adapt and invest in resilience is an urgent priority. On average, the net benefit of investing in resilient infrastructure in low- and middle-income countries would be $4.2 trillion with $4 in benefit for each $1 invested. Investments in resilient infrastructure systems are only possible if the right financing is made available at the right time. 

People and Health

This cluster scopes, innovates and adapts financing solutions that leverage public and private resources for people and health. These include Innovative concepts that promote women entrepreneurship, and access to health and economic opportunities for communities and vulnerable groups.

The effects of the pandemic hit all developing countries, but specific characteristics make some countries more vulnerable than others. The World Health Organization recognized that the conditions in which people are born, grow, work, live and age significantly shape and affect their health. To achieve the 2030 Agenda, governments need to accelerate economic development in a way that will allow better access to healthcare and other basic services. To ensure people stay healthy, it is essential to address the social determinants of health and empower vulnerable groups from minorities to adolescents and women.

Access to essential services for vulnerable groups, and particularly women, can be facilitated through solutions that promote entrepreneurship and self-empowerment. Improvements in health security can be achieved by strengthening core public health functions, but also by smartly investing in systems that cater to preparedness and response, as well as innovative approaches (like telemedicine and digital access, energy-efficient vaccine cold chains, to name a few).

Agriculture and Food Security

This cluster scopes, innovates and adapts financing solutions that leverage public and private resources for agricultural systems and enhanced food security. These include microcredit and microinsurance, downscaling schemes from multilateral development banks, and a variety of blended finance facilities supporting agricultural supply chains, smallholder farmers, rural development, nutrition, and sustainable farming transitions.

With rapid economic growth and increased agricultural productivity, the number of undernourished people has dropped by almost half in the new Millenium. However, after years of steady decline in malnutrition, numbers are on the rise once again. Current estimates show that nearly 9 percent of the world population is still hungry. The impacts of climate change and conflicts take an even higher toll - resulting in an estimated 135 million people suffering from acute hunger. The COVID-19 pandemic could almost double that number, adding 130 million more people at the risk of suffering acute hunger by the end of 2020.

“Persistent and chronic hunger is the result of poverty, inequality, conflict, poor governance and marginalization of the most vulnerable,” - Gilbert F. Houngbo, President of IFAD. Poverty is deeply intertwined with successes or failures in agriculture and food security, with the majority of the rural poor depending on agriculture and natural resources for their livelihoods. Yet, because they lack the resources or knowledge to invest, they cannot benefit from new technologies or access to markets that would boost their income and resilience. We need solutions that transition agriculture into something that can be a part of a new, sustainable future. Still “... we have enough wealth in the world to feed everybody” - WFP Chief David Beasley.

Natural Ecosystems and Climate Action

This cluster scopes, innovates and adapts financing solutions that leverage public and private resources for natural ecosystems and climate action. These include green financing solutions, from lending and impact investing to insurance and smart public subsidies, addressing climate mitigation and resilience, terrestrial ecosystems, and air pollution.

The world’s growing global population demands more food, fuel, fiber, and feed. This demand drives the expansion of industrial-scale agriculture, infrastructure and extractive industries, resulting in massive deforestation, conflicts over land, overfishing, and human rights violations. Investment in fossil fuels continues to be higher than investment in climate action at a scale of about USD $100 billion. Financing that promotes deforestation outpaces funding for forests by 40 to 1, according to the Climate and Land Use Alliance. With the appropriate financing and investing, and backed by the right policies and practices, the world could protect nature and mitigate and adapt to climate change. 

Since the 1880s, the average global temperature has risen by 1.1 degrees Celsius, driving substantial physical impact around the world with unknown severity and frequency. Global temperatures are projected to rise by up to 3.2°C by 2100, which is only 80 years away. With average temperatures on the rise, catastrophic hazards including heat waves, floods, droughts and rising sea levels will only intensify. These risks pose the largest socioeconomic risk. Combatting these risks requires policy makers and business leaders to collaborate and catalyze investment. Already, global markets for climate-smart businesses and technologies have expanded at the pace of USD  $1 trillion annually. IFC shows 21 emerging market economies promise USD $23 trillion in climate-smart investment opportunities through 2030.

Blue Economy

This cluster scopes, innovates and adapts financing solutions that leverage public and private resources for the blue economy. Blue financing solutions are adapted to the needs of island nations and coastal communities to preserve marine resources and coral reefs while offering income opportunities to coastal populations.

Oceans are getting warmer, stormier and more acidic, impacting the health of sensitive marine ecosystems, such as coral reefs. Changes to the ocean’s temperature, chemistry, flow and food webs have broad implications for the global economy. The monetary value of the world’s oceans has been estimated at US$24 trillion by the World Wide Fund for Nature. This wealth is at risk because overfishing, pollution and climate change put an unprecedented strain upon marine ecosystems. 

While some countries are set to maintain or improve catch and profits, others around the world who rely on healthy oceans and marine resources will see decreases in fishing, food and prosperity. Ocean reefs contribute to the livelihoods of at least 500 million people worldwide, mostly in less-developed economies, generating US$36 billion per year for the global tourism industry. Coral reefs are home to some of the planet's most biodiverse ecosystems. They provide vital protection from coastal flooding and storm surges. Investing in scalable businesses that build resilience in coastal ecosystems and create jobs not only allow us to save our planet, but also to build more resilient economies.