The Inclusive Green Finance Policy  (IGFP) Project was initiated in 25 June 2021 with the aim of 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 goals 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 2015 level, encourage the introduction of fuel-efficient transport equipment, promoting climate-friendly agriculture in oil palm, cocoa and coffee platform, reducing electricity demand through energy efficiency, promting 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 towards building climate resilience and promoting inclusive green growth.

However, at present, PNG lacks an official taxonomy to guide government agencies, financial institutions, and other private sector entities on which activities are considered ‘green’ and/or ‘inclusive’. For government agencies, this makes it difficult to monitor, regulate, and promote green financial flows into and within the country. For financial institutions and private sector entities, it is difficult 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 this project aims to address this gap by developing a PNG policy on inclusive green finance – the IGFP. The IGFP woould include a Green Taxonomy that will help promote green financial flows thus promoting  green activities and overall help achieve NDC targets on climates resilience and inclusive growth for PNG.