Green Finance Centre Launched in PNG to Accelerate Sustainable Economic Growth

By: Roselyn Erehe April 08, 2024

The signing of a Memorandum of Understanding (MoU) among BPNG, GGGI, and three financial institutions—Bank of South Pacific Group (BSP Group), Nationwide Micro Bank (MiBank), and Women’s Micro Bank (Mama Bank) witnessed by distinguished dignitaries and stakeholders at the recent launch of Green Finance Centre. Port Moresby. – image provided by CCDA media team

Papua New Guinea took a significant stride towards sustainable economic development with the inauguration of the Green Finance Centre (GFC) in a collaborative effort spearheaded by the Bank of Papua New Guinea (BPNG) and the Global Green Growth Institute (GGGI).

The move aims to revolutionize PNG's financial sector by integrating green finance principles into its core operations.

Other key partners include the Centre for Excellence in Financial Inclusion (CEFI), the Department of Climate Change and Development Authority (CCDA), and the Alliance for Financial Inclusion (AFI).

The effort’s primary objective is to tackle environmental and climate change challenges in PNG through innovative and inclusive climate finance and green investment mechanisms within the financial and banking sector. This aligns with PNG’s commitment to achieving low-carbon, sustainable, and inclusive economic growth while addressing climate change risks across the country.

This landmark collaboration launched on 25th March at the prestigious Hilton Hotel, Port Moresby. Distinguished guests included Chief Secretary to the Government of PNG Mr. Ivan Pomaleu OBE, Conservation Environment & Climate Change Minister Hon Simo Kilepa MP, and the Governor of the Bank of Papua New Guinea Mrs. Elizabeth Genia, marked a pivotal moment in the nation's financial landscape.

The ceremony also witnessed the participation of key dignitaries, including the Minister for the Environment Hon. Simon Kilepa; Dr. Alfred Hannig, Executive Director for Alliance for Financial Inclusion (AFI); New Zealand High Commissioner, Peter Zwart; His Excellency Guillaume Lemoine, French Ambassador to PNG; and Mr. George Awap, Assistant Governor - BPNG.

At the heart of the initiative lies the Inclusive Green Finance Policy (IGFP), developed by GGGI and CEFI in 2021. With a generous funding of USD 670,000 from the New Zealand Ministry of Foreign Affairs and Trade (MFAT), under the Low Emission Climate Resilient Development Program (LECRD), the IGFP aims to integrate green finance practices into PNG’s financial landscape.

One of the highlights of the launch was the unveiling of the GFC's logo and website, symbolizing a new era of environmentally conscious and financial practices in PNG. The steering committee, chaired by BPNG, will guide the GFC in implementing the IGFP and leading future initiatives related to green finance flows in the country.

The signing of a Memorandum of Understanding (MoU) among BPNG, GGGI, and three financial institutions—Bank of South Pacific Group (BSP Group), Nationwide Micro Bank (MiBank), and Women’s Micro Bank (Mama Bank)—underlines the commitment to integrating the IGFP into their operations and development of green loan products.

The grant agreement signed between GGGI and Agence Française de Développement (AFD) further solidifies international support for PNG's green finance agenda. With a six million Euros grant, PNG through the GFC will receive one million Euros to support the ongoing work of IGFP implementation and an additional 1.8 million Euros for designing and capitalizing of a Green Refinancing Facility (GRF).

In his keynote remarks, Chief Secretary Mr. Ivan Pomaleu OBE hailed the establishment of the GFC as a bold step towards greening PNG's financial sector, emphasizing the importance of promoting low-emission options to combat climate change impacts.

“In line with the government’s mandate, the Green Finance Centre will strongly advocate for banks to channel loan investments in sectors such as agriculture, energy, SMEs and bioeconomy to promote low-emission options to reduce our carbon footprint and lead by example in the region and globally, demonstrating our commitment to addressing climate change impacts,” said Mr. Pomaleu.

Echoing similar sentiment, BPNG Governor Mrs. Elizabeth Genia reaffirmed the bank's commitment to promoting national financial inclusion and environmental sustainability, acknowledging the pivotal role of GGGI and CEFI in driving this initiative forward.

“The Bank of Papua New Guinea is committed to promoting national financial inclusion and the greening of the financial sector and the launch of the Green Finance Center underscores the commitment of all stakeholders involved to drive sustainable development and address climate change challenges through innovative financial mechanisms,” she added.

High Commissioner Zwart stressed the urgency of climate action and commended the collaboration between the New Zealand Government, BPNG and GGGI in establishing the Green Finance Center.

He said: “The New Zealand Ministry of Foreign Affairs and Trade is proud to provide funding for IGFP and collaborate with the Bank of Papua New Guinea and GGGI in establishing the Green Finance Centre which will play a crucial role in working with financial institutions to mobilize increased green lending and investments in Papua New Guinea.”

AFD Executive Director Mr. Philippe Orliange expressed support for the IGFP and the Green Finance Center, affirming AFD's commitment to replicating the success of greening PNG’s financial sector across the Pacific Region.

 “Greening the financial system in PNG is crucial towards the fight against climate change and I am proud that France is happy to help PNG tackle this. PNG is a role model in the Pacific, and we wish all the best to the team involved,” he added.

The launch of the GFC aligns seamlessly with BPNG - CEFI’s Third National Financial Inclusion Strategy (NFIS 3) (2023-2027) and PNG’s climatic goals outlined in PNG Vision 2050 and Medium-Term Development Plan IV (2023-2027), highlighting the integrated approach towards sustainable development.

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