The Inclusive Green Finance Policy (IGFP) Project was initiated on 25 June 2021 with the aim of a greater understanding of climate resilience and inclusive green growth in PNG. IGFP marks the first step towards green finance in PNG, thereby facilitating future efforts to monitor, regulate, and promote green finance flows in the country.
‘Climate Resilience and Inclusive Green Growth’ is one of the key pillars of Papua New Guinea’s Development Strategy. Its importance is emphasized in ‘PNG Vision 2050’, ‘PNG Development Strategy Plan 2010-2030’, ‘National Strategy for Responsible Sustainable Development (StaRS)’, and ‘Medium Term Development Plan 2018-2022’. The government has set various targets to achieve this goal under the enhanced National Determined Contributions (NDCs) such as reducing annual net emissions from deforestation and forest degradation due to agriculture expansion and commercial logging by 10,000 Gg CO2 eq. compared to the 2015 level, encourage the introduction of fuel-efficient transport equipment, promote climate-friendly agriculture in oil palm, cocoa, and coffee platform, reduce electricity demand through energy efficiency, promote REDD+, downstream processing and enforce economic productive and sustainable livelihoods. Meeting these targets requires – in addition to sound policies and enabling environment for the public sector- a significant and sustained investment from the private sector. These investments (or “green” finance) should be directed towards “green” activities that contribute to building climate resilience and promoting inclusive green growth.
Since the project started, there have been some very broad and comprehensive processes involved that included desktop research, TWG workshops, and one-on-one stakeholder consultations leading up to the successful drafting and completion of the Inclusive & Green Finance Policy document which was launched on 8 June 2023 by Prime Minister Rt. Hon. James Marape.
The IGFP features PNG’s Inclusive & Green Taxonomy as its key component accompanied by a Diagnostic Report and an Implementation Roadmap. The Green Taxonomy will assist government agencies to monitor, regulate and promote green financial flows into and within the country. Also, it will help financial institutions and private-sector entities to know whether they are complying with a certain policy (e.g., mandatory disclosure on green investments) or are eligible for incentives related to green activities (e.g., low-interest green loans). Hence the IGFP will help promote green activities and overall help achieve NDC targets on climates resilience and inclusive growth for PNG.
The number of Steering Committee and Technical Working Group meetings held so far include:
The Inclusive & Green Finance Policy was officially launched on 8 June 2023 by Prime Minister Rt. Hon. James Marape. It is made up of 3 key component outputs:
The project is now in Phase II and has been included in the recently launched BPNG-CEFI National Financial Inclusion Strategy 2023-2027 as a key strategic objective. It will aim to achieve 3 main outputs which are:
The Technical Working Group (TWG) defines the necessary regulatory, technical, and financial preconditions to be put in place within a feasible period to allow the IGFP to become operational. It includes government agencies, financial institutions, private sector entities, international organizations, industry associations, and academia who offered valuable inputs. They are:
The Global Green Growth Institute serves as the secretariat providing the main technical support with assistance from Agriculture and Finance Consultants GmbH (AFC).