Inclusive Green Finance Project (Phase III)

The members of the Alliance for Financial Inclusion (AFI) view financial inclusion as a key factor for the achievement of SDGs. The AFI provides central banks, financial supervisory authorities, finance ministries and other relevant actors in over 80 developing markets and emerging economies with a global platform for financial inclusion. Together, these parties are working to develop innovative and effective political strategies for combating climate change and adapting to its impacts. The project is also offering peer learning, resource- and expertise-building, public-private dialogue, institutional analysis and other services for AFI members, with the aim of ensuring that they are then in a position to implement relevant national policy goals. More than 200 decision makers will benefit from these professional training programmes. Insights will be shared in the AFI network and therefore also with financial regulatory bodies.

Project data

IKI funding: 6,636,068.00 €
Duration: 06/2018 till 09/2027
Status: open
Implementing organisation: Alliance for Financial Inclusion (AFI)
Political Partner: Diverse climate change relevant institutions in the respective partner countries/Diverse klimarelevante Institutionen in den entsprechenden Partnerländern

United Nations Environment Programme (UN Environment)
Online: https://www.afi-global.org/working-groups/inclusive-green-finance-working-group

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State of implementation/results

Policy Development
- At the 11th IGFWG Meeting members gained insights from El Salvador’s green taxonomy and green finance roadmap, emphasizing regional collaboration on IGF.
Five new workstreams launched:
- 1. Greening the MSME sector
- 2. Inclusive, Affordable, and Sustainable Housing
- 3. IGF as a pathway to proportionate sustainable finance standards
- 4. Green Finance Taxonomies
- 5. A study on climate risks affecting MSMEs access to finance (in collaboration with SOAS University).
Members approved two initiatives:
- 1. The IGF Progress Measurement Framework to track progress.
- 2. The IGFWG Expert Advisory Team to provide policy guidance.
Public-Private (PPD) Collaboration
- A Leaders’ PPD was held with 41 participants from 14 AFI institutions and 10 partners who shared insights on how credit, insurance, and payment systems build resilience and support climate change mitigation and adaptation for low-income populations. Next steps include exploring digital infrastructure and digital payments in the context of IGF, with strong interest from the private sector to engage with AFI on these topics.
Regional Initiatives
- IGF policies are now being prioritized across all regions. AFI Pacific leaders endorsed the Natadola Roadmap, setting targets for regional IGF projects, enhancing member capacity and strengthening partnerships. Collaboration with the Global Green Growth Institute (GGGI) was initiated. In Q1 in Armenia, AFI’s Eastern Europe and Central Asia (EECA) members including Armenia, Kazakhstan, Mongolia, North Macedonia, and Uzbekistan prioritized IGF for the first time and shared progress in building resilience for vulnerable populations.
Four Completed In Country Implementation Projects
- Nepal Rastra Bank (NRB): The Nepal Green Taxonomy was released for public consultation. Aligned with international taxonomies it defines green investments, particularly for MSMEs and is expected to increase finance flows towards a green, resilient, economy.
- Maldives Monetary Authority: The finalized Green Finance Taxonomy provides a Maldives specific definition of green investments. As a small tourism reliant economy this taxonomy will direct finance towards conserving natural resources.
- Palestine Monetary Authority (PMA): A Sustainable Finance Roadmap was developed after a diagnostic study and consultations. It sets priorities for finance flows towards green activities particularly for MSMEs, supporting adaptation and transition to a greener economy.
- SEPS Ecuador: The completed ESRM toolkit was launched, offering practical guidance for the cooperative and housing sectors in managing climate-related risks. This is Ecuador’s first financial sector regulation and can serve as a model for others.
- These initiatives show AFI’s growing momentum in expanding IGF services, increasing reach, enhancing advocacy and strengthening partnerships. AFI has deepened its impact with detailed implementation plans that foster regional and national progress. AFI‘s IGF offerings are well-equipped to respond to the climate crises through an inclusive approach.