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ESG Investment Forum was held in Astana

On October 3 at the site of World Investor Week in the AIFC a panel session «National ESG Club as a platform for sustainable business» was held.

Speaking at the session, Ruslan Iskakov, Chairman of the Board of Development Bank of Kazakhstan JSC, said the financial institution is currently working on a new development strategy. Its main line will be precisely compliance with the principles of ESG.

«We are working on writing a strategy for the next 10 years considering the principles of ESG are not a part of the strategy. The strategy itself is written through the prism of ESG. Sustainable development today is not a tribute to fashion, it is a topic that in the next 10-15 years will become a key one for companies, industries, and entire states. Reforming the activities of development institutions is already a direct necessity», said Ruslan Iskakov.

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And Development Bank is already following the principles of ESG. Nine key initiatives have been identified within the framework of sustainable development in three aspects of ESG which are ecology, society, and governance.

According to Ruslan Iskakov, the construction of the new power plants based on renewable energy sources is becoming important. This will reduce the carbon footprint in the products of industrial enterprises that are exported.

In Europe, one of the key export markets for Kazakhstan, the carbon regulation is being tightened and without a reduction in the carbon footprint by Kazakhstani producers, this direction may simply be closed. DBK seeks to expand its portfolio of the renewable energy projects. Now there are seven such projects in the portfolio of the Bank and two more are in the pipeline.

Ruslan Iskakov drew attention to the need to involve the customers of the Bank in these changes:

«We clearly understand that companies that do not comply with the principles of ESG carry high credit risks. In order to keep assets at a high level we need to keep the policy in relation to our customers as well».

In addition, according to Ruslan Iskakov, the work of DBK's subsidiary, the Industrial Development Fund was reoriented. Now the Fund among other things focuses on leasing areas which are not served by the private leasing companies. This is, for example, the leasing of technological equipment - a complex segment that is not very attractive for the private players.

However, the state development institutions, according to the head of DBK, should not take the lead in choosing technologies for economic development.

«When it comes to addressing the government institutions for technology adoption then there is no substitute for entrepreneurial initiative. The choice (of technologies) should be up to business, and we should offer affordable financing for the technological development», Ruslan Iskakov said.

Also, the heads of the Ministry of National Economy, Otbasy Bank, the Eurasian Development Bank, Freedom Finance Global PLC and EY took part in the panel session.

Alibek Kuantyrov, Minister of National Economy of the Republic of Kazakhstan spoke about the importance of adopting a low-carbon development strategy in Kazakhstan until 2060.

«It is assumed the new strategy will expand the horizons of planning, expand the list of tools through which sustainable economic development will be achieved. This document is supposed to be considered for the other documents of the state planning system», Alibek Kuantyrov noted.

Now abroad, the principles of ESG are actively used in public administration as they cover not only the environment, but also the development of management with social aspects. Similar work is in its way in Kazakhstan.

«Our budget is socially oriented – more than 50% of expenses are for social needs. Also, for several years, an emphasis has been placed on gender budgeting - funds are allocated for women's entrepreneurship, various aspects related to family development», added the Minister of National Economy.

Lyazzat Ibragimova, Chairman of the Board of Otbasy Bank JSC, spoke about the commitment to ESG principles in her financial institution. Thus, following the principle of sociality, Otbasy Bank builds the new products for those groups of the population that would not have access to financing within the market conditions.

The principle of transparency is also implemented. The bank loan agreements for the social programs «Shanyrak» and «Bakytty Otbasy» stipulate that information about the borrowers who have received the preferential loans will be published on the Bank's website. Due to this fact the probable questions on the transparency of the distribution of financing are removed, Lyazzat Ibragimova noted.

Nikolay Podguzov, Chairman of the Board of the Eurasian Development Bank spoke about the EDB's concrete plans to increase the share of «green» projects in its portfolio.

«We plan to increase the share of green projects in our portfolio from the current 15% to 25% in 2026. And also increase the amount of financing for renewable energy up to $1 billion by 2024», said Nikolai Podguzov.

According to his words, the EDB has adopted all the methodologies and criteria for evaluating green projects. And Nikolai Podguzov also emphasized for the present time absolutely all the projects on the stage of consideration pass by the expertise in terms of sustainable development.

АО «Банк Развития Казахстана»
проспект Мәңгілік Ел, здание 55 А, н.п. 15 Z05T3E2 Астана
+7 (7172) 79 26 79