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Green Financing: Developing the Responsible Investment Market
15 February 2019
12:00—13:15
KEY CONCLUSIONS
Support for green and socially responsible investment is becoming a global trend

The market of ‘green’ stock has already reached USD 390 billion. <…> Each global centre has a section of ‘green’ stock. <…> In Luxembourg a separate ‘green’ stock exchange has been established. The world has been living with ‘green’ stock for a while — Ilya Torosov, Deputy Minister of Economic Development of the Russian Federation.

We are now at the growth point when we have to set a clear priority. <…> As an ecologist, I believe that all investments should be ‘green’, they should be responsible. I think that this alternative understanding of investment is a global trend — Rashid Ismailov, Head of the Working Group on Ecology, Expert Council under the Government of the Russian Federation; Head, Russian Ecology Society.

The state and various public agencies should support such projects, because they help either develop the social sector or improve country’s ecology — Anna Kuznetsova, Member of the Executive Board, Managing Director of Securities Market, Moscow Exchange.

Russia puts an emphasis on the implementation of clean technologies

The national project (‘Ecology’ – Ed.) [includes] the transition to best available technologies. There has been a long discussion about whether to identify it as a separate area or not. It has sent a very important message that the transition to best available technologies, that is, to a large-scale environmental reform, should be closely related to the development of green finance instruments. Fifty-one reference guides on best available technologies has already been prepared — Vasily Osmakov, Deputy Minister of Industry and Trade of the Russian Federation.

Sustainable development projects are interesting for the business

Our company is undoubtedly interested in development and implementation of instruments of sustainable development financing and ‘green’ financing. We support the growth of ‘green’ finance market and ‘green’ stock in Russia, we are already having this dialogue and are willing to continue — Alexey Voronov, Finance Director, Member of the Management Board, Management Company METALLOINVEST.

The existing mechanism of state support is successfully used for project financing by banks. Particularly, development banks are financing ‘green’ energy projects due to their capabilities — Alexander Gareev, Managing Director, Eurasian Development Bank (EDB).

ISSUES
Sustainable development projects require new finance instruments

In order to fuel the global ‘green’ economy, we need to attract USD five to six billion per year. This means that the ‘green’ finance has to find solutions for stepping away from traditional financing and for attracting the funds <…> for sustainable development — Sandrine Enguehard, Head of Cross-Product Green Structuring, Societe Generale Group.

The ‘Ecology’ project accounts for 3.2 trillion roubles of off-budget expenditures that we have to finance with ‘green’ stock — Ilya Torosov, Deputy Minister of Economic Development of the Russian Federation.

In order to further and expand the support programme, we clearly need to consider additional instruments, and one of them <…> is the instrument for qualified investors, which is ‘green’ stock — Alexander Gareev, Managing Director, Eurasian Development Bank (EDB).

‘Green’ investment requires higher standards of projects

Over the course of a few years we will have to mobilize <…> a large amount of investment projects that, apart from traditional environmental and financial indicators, [aim for] environmental KPI. Currently it is a huge challenge for us, as even the nearest-term prospects for us is around 120 billion roubles of project financing. This is what we will have to do in the next <…> few months — Vsevolod Gavrilov, Director, Energy Efficiency and Natural Resources Project Management Directorate, Sberbank.

SOLUTIONS
State support for ‘green’ investment

Currently our market is not yet formed. Therefore, we believe that investors should also be supported. So, we plan to discuss complete or partial renunciation of interest income tax for ‘green’ stock <…> to spread ‘green’ stock in a similar way to high-tech stock, maybe using the income tax rate for the conversion of such stock — Ilya Torosov, Deputy Minister of Economic Development of the Russian Federation.

This year we are launching a support vehicle <…> we are planning to compensate 0.7 of the base rate for coupon profit. We have 9.3 billion roubles for this for a period of three years. It is going to be the first step, and we realize that ‘green’ finance is related to both Central Bank regulation and activities of the Ministry of Economic Development and the Ministry of Finance — Vasily Osmakov, Deputy Minister of Industry and Trade of the Russian Federation.

The most appropriate form of financing <…> would be state support in the form of some kind of subsidies — Vladimir Tamozhnikov, Director, Department of Strategic Market Development, The Central Bank of Russian Federation.

Establishment of infrastructure for ‘green’ finance

This year we are planning to create a sector of ‘green’ stock <…> Investing in such instruments <…> is a conscious choice of an investor. It is hard to talk about some bonuses or profitability here — Anna Kuznetsova, Member of the Executive Board, Managing Director of Securities Market, Moscow Exchange.

We believe that it is very important to create our own methodological centre and a system for ‘green’ project verification in Russia — Vladimir Tamozhnikov, Director, Department of Strategic Market Development, The Central Bank of Russian Federation.

The material was prepared by the Russian news agency TASS