The project aims to address key barriers that prevent climate-friendly investments from expanding in Uzbekistan and Kyrgyzstan. By identifying the specific gaps and barriers faced by businesses and financial institutions in the existing climate finance landscape, the project will provide recommendations to address these issues, making it easier for stakeholders to access climate finance. The project will conduct a climate finance gap assessment, provide capacity building trainings for banks and other relevant stakeholders, and develop sustainable and green financing framework.

Main Objective:

The overall project objective is to bridge the climate finance gaps and enhance green investment opportunities in the Republic of Uzbekistan and the Kyrgyz Republic by accelerating green transition of the financial sector. For this purpose, the project will analyze existing climate finance ecosystems and gaps, build the capacity of public and private entities to access climate finance, and develop two Sustainable/Green financing frameworks or dedicated green/climate financing facility that align with the highest international standards to foster robust climate finance landscape across the region (one financial institution per each region in the Republic of Uzbekistan and the Kyrgyz Republic).

Areas of intervention:

Area of intervention 1. Gaps in the existing climate finance ecosystem in the region were analyzed, and recommendations were made to address them in each country.

Expected results: Climate finance gaps assessment paper with recommendations for two countries (Uzbekistan & the Kyrgyz Republic).

This area of intervention will focus on understanding the current state of climate finance in both countries. It will aim to identify specific hurdles and gaps within the existing financial systems that prevent climate-friendly investments from scaling up. This involves a dual perspective: understanding what kind of green investments are needed (demand) and what financial products and capacities are available (supply), and then pinpointing the disconnects to provide policy and technical recommendations.

Area of intervention 2. Access to climate finance of relevant public and private entities will be enhanced through capacity building and technical design of sustainable/green finance frameworks or climate financing facilities of selected banks/institutions in each country.

Expected results:  

– Workshop for the public and private stakeholders in Uzbekistan & the Kyrgyz Republic (and potentially Central Asian countries), including banks, public institutions, agro/green businesses, etc.;

– Longlisting & shortlisting of banks/institutions conducted for collaboration in designing sustainable/green finance frameworks and/or dedicated green/climate financing facility;

– Framework/facility preparation for attracting green climate finance conducted for at least two commercial banks/institutions (one for each country) for potential mobilization of at least $50 million. 

Building on the findings from Area of Intervention 1, the project will aim at practical interventions to directly enhance access to climate finance for the private sector entities functioning in both countries. This area of intervention also aims to strengthen the institutional capacity of key financial players and help them develop the necessary tools and regulations (e.g. frameworks and facilities) to deploy climate finance effectively, so that they can be equipped with the necessary tools and capacities beyond the completion of the project.

Limited access to finance continues to be a barrier for farmers and businesses in adopting green and climate-smart technologies and practices in the Central Asian region. For example, in Uzbekistan in 2023, 70% of the agricultural enterprises did not have access to banking products​. To address this, the project will focus on creating two financial frameworks that support green sectors and consider the inclusion of vulnerable groups. This will create an enabling environment for climate finance that will help to achieve one of the ambitious goals of the Strategy of Uzbekistan for 2022-2026, which sets a volume of investments into the economy of $120bn in total, of which around 5% should go to the Agricultural sector.

Similarly, the Kyrgyz Republic continues to face fiscal constraints that limit the government’s ability to finance sustainable development initiatives. This hinders the achievement of the Sustainable Development Goals (SDGs) and full implementation of the National Development Strategy (2018–2040) and the National Development Programme (2021–2026). While the private sector plays a vital role in the country’s green transition, it remains constrained by limited access to finance, weak institutional capacity, and skill shortages. Opportunities exist to mobilize private capital for green infrastructure and climate-aligned sectors, as the Kyrgyz government has officially announced the National Development Program of the Kyrgyz Republic until 2030.

Area of intervention 1.

The first project area focused on assessing the climate finance landscape in each country through the development of a gap assessment and tailored action plans, identifying both quick-win opportunities and longer-term strategic projects. The GGGI-developed Climate Finance Gap Assessment revealed sectoral needs in both countries and proposed recommendations. 

In Uzbekistan, closing the USD 9 billion annual climate finance gap under the Net Zero 2055 scenario will require a decisive shift toward structural market reform and large-scale de-risking. Priority actions include strengthening climate-related financial regulation, aligning fiscal policies with climate objectives, and embedding ESG and climate risk into financial supervision. Public resources can have the greatest impact by anchoring blended-finance platforms, first- and second-loss facilities, and risk-sharing mechanisms that unlock private investment in the power sector and carbon-management solutions, while expanding the use of capital-market instruments such as sustainability-linked and green bonds. 

In the Kyrgyz Republic, closing the USD 9.3 billion climate finance gap by 2035 (approximately USD 930 million annually), as set out under NDC 3.0, will require sustained efforts to build the foundations of a functioning climate-finance market. While domestic banks have begun engaging in green finance and early green bond issuances have taken place, key gaps remain. Priority actions include operationalizing the Green Taxonomy, strengthening MRV and data systems, expanding project preparation capacity, and establishing targeted risk-mitigation instruments such as guarantees and sector-specific financing facilities, as well as blended finance mechanisms, to support greater private investment in energy, agriculture, water, and resilience. 

To access the full Climate Finance Gap Assessment, check out the “Bridging the Gaps of Climate Finance in Central Asia” project website. 

Area of intervention 2.

The second project area focused on strengthening the capacities of public and private financial institutions in green finance and ESG investment practices through 4 tailored training sessions in both countries. In addition, the project provided technical support to selected financial institutions and government counterparts in designing sustainable and green financing frameworks and facilities aimed at mobilizing climate finance effectively.  

The “Bridging the Gaps of Climate Finance in Central Asia” project supported the development of Green Finance Framework with ABank, which received an “Excellent” Second-Party Opinion (SPO) – the bank is planning to issue a green bond this year, with the size of the bond expanding due to the project’s assistance. The project also engaged with the Ministry of Finance of the Kyrgyz Republic to help create a roadmap and set the foundation for the issuance of the first sovereign green bond the republic is anticipating.  

In Uzbekistan, the project supported the Business development Bank (BDB) in updating its Sustainable Finance Framework, which also received an “Excellent” SPO, with a bond issuance planned for later this year. Additionally, the project supported Agrobank in the development of a Green Finance Framework to assist the bank in creating new financial products that will promote financing for agriculture and other green activities.  

The project also produced easy-to-follow training material for stakeholders, which was printed and distributed at the final event. It consists of six modules on Sustainable Finance, ESG, its implementation and standards, as well as the use of Environmental and Social Risk Management (ESRM) tools and Environmental and Social Management Systems (ESMS). Each module can also be consulted independently as a standalone reference on its respective topic. The training modules will be available on the “Bridging the Gaps of Climate Finance in Central Asia” project webpage.