January 15, 2021 20:40

"Green” finance in Russia: new requirements and new opportunities

"Green” finance in Russia: new requirements and new opportunities

How quickly can the green finance market develop in Russia? What do the government and development institutions need to do to attract money into new environmentally sustainable projects and modernization of production facilities? What are the prospects for the green finance recommendations developed by VEB.RF in cooperation with ministries, departments, scientific, expert and business communities? The main topic of the Green Economy dialogue held as part of the second day of the Gaidar Forum 2021 was expanding the share of environmentally friendly investment projects in the portfolio of development institutions and modernization carried out by Russian Railways.

Oleg Belozerov, General Director and Chairman of the Management Board of Russian Railways JSC, and Igor Shuvalov, Chairman of VEB.RF, participated in the discussion.

Igor Shuvalov noted that about 40% of the investment portfolio of VEB.RF can be classified as "green" finance. "We see great potential for the urban economy, for transportation, including electric transportation, for new waste recycling technologies, especially where large accumulated landfills are concerned. Here we have a responsibility to create a new big portfolio, which will be both high-quality and will have a larger share of green finance," said Igor Shuvalov.

He noted that VEB.RF will be launching new "green" financing instruments, but emphasized that the traditional sectors of the economy are not leaving the bank's portfolio, and that it will be opening up new financing for them. At the same time, while a few years ago export potential became necessary to finance production, ESG criteria, sustainable development in environmental, social and economic spheres, will soon become a higher priority.

"We will continue to fund the traditional economy, but it will be an informed decision, and if there is, for example, some alternative ensuring that the carbon footprint is lower and the efficiency is higher, then it is clear that the capital has a certain limit. Since our main partners are commercial banks, Sber, VTB and Gazprombank, they are interested in first-class projects. Priority will be given to those projects that are designed to have an impact on sustainable development and the green economy," said Igor Shuvalov.

As was noted by Oleg Belozerov, head of the Russian Railways company, which became a strategic partner of the entire Forum, the development of railways has a positive effect on reducing atmospheric emissions, which is why 2021 has been declared the Year of Railways in the European Union. Russian Railways OJSC has risen to fourth place among all Russian companies in the ESG rating, which is compiled by the international agency RAEX-Europe.

"We are switching to electric traction, gas traction, we are working on hydrogen traction. We have accumulated damage that we are trying to eliminate, and by 2030 we will completely eliminate all the damage that we have historically caused to nature. If a new type of locomotive comes out, it means that it must either reduce energy consumption or switch from diesel fuel to natural gas motor fuel or to lithium-ion batteries", Oleg Belozerov said.


Photographer: Mikhail Tereshchenko / TASS

The Gaidar Forum “Russia and the World After the Pandemic” will be held on January 14 and 15 at the Presidential Academy. The Forum will traditionally open the annual business agenda of Russia. In 2021, this large-scale event will be held in a hybrid format, both online and offline.

This time, the main discussion track will be social and economic transformations that have occurred in the country and the world as a result of the COVID-19 pandemic. The expert discussions will be focused on the national and global development goals and the search for practical solutions to the most urgent challenges of today. The Forum’s participants include ministers from the Russian Government, members of the Federal Assembly, governors of the Russian regions, largest world experts, representatives of foreign states.

The general partners of the Gaidar Forum are Gazprom PJSC and Gazprombank JSC.

The strategic partners are Russian Railways OJSC, Johnson&Johnson, ACIG Group, Novartis.

The partner of the forum is MasterCard, Russian Direct Investment Fund (RDIF)

The discussion partners are Magnit, Pepsi, Huawei, Coca-Cola, AstraZeneca, Takeda, EY.

General media partners: TASS, Business FM, RIA Novosti, RBC. Strategic media partners: Interfax, Rossiyskaya Gazeta, Kommersant Publishing House, RIA FederalPress, Invest-Foresight magazine. Main media partners: Anews, News.ru, lenta.ru. International media partners: Russia Today.

Media partners: PRO Business TV channel, AEI PRIME, Polit.ru, Strategy magazine, Public Administration magazine, Ekonomika i Zhizn newspaper, Econs portal, Finam, Bankovskoye Obozreniye magazine, Parlamentskaya Gazeta, Snob media project, Echo of Moscow radio station, Nauchno-Obrazovatelnaya Politika Telegram channel.