Green finance: Good practices in Peru

IKI Peru interface project workshop

In November 2023, the IKI Peru projects met to discuss on the green finance progress, share experiences and promote synergies for technical cooperation between IKI Peru projects and other projects within the framework of the Peruvian-German Climate Alliance. This thematic meeting took place within the framework of the IKI's knowledge management strategy, which has established interface projects in IKI priority countries around the world. 

Recognizing the importance of this meeting, Cristina Rodríguez, Director of Adaptation to Climate Change and Desertification of the Ministry of Environment, Peru (MINAM) in her opening statement highlighted that, not addressing climate change would cost Peru a reduction of between 11% and 20% of GDP by the year 2050. This is related to the costs needed in dealing with the consequences for people and the economy.

Progress and challenges 

Rodríguez further shared on the progress made in climate finance by the General Director of Climate Change and Desertification. The financing strategy, currently being formulated, aims to guide state and non-state actors, promoting increased resources for climate action to achieve carbon neutrality by 2050.

Her statement was followed by Élvis García, General Director of Economics and Environmental Financing of MINAM, who presented MINAM's strides in environmental financing, emphasizing the Green Finance Roadmap (HRFV) and the Works for Taxes initiative (Obras por Impuestos). The HRFV facilitates the integration of environmental aspects into operations, accelerating the transition to a green economy. 

Petra Nieland from the IKI office at the Zukunft - Umwelt - Gesellschaft (ZUG) gGmbH, also shared on IKI's green finance approach, indicating 320 million euros in new funding opportunities from the IKI Thematic Call 2023. IKI aims to mobilize 1.5 billion euros in private capital by 2030 for climate change, biodiversity, and adaptation in partner countries.

IKI’s project experiences on green finance

During the event, three IKI Peru projects shared their green finance successes. 

The project "Protection and Regeneration in the Manu Biosphere Reserve” highlighted a conservation agreement involving the National Service of State Protected Areas (SERNANP), the AJE group and the aguaymanto producers' association. This effort led to the protection of 400 ha in the buffer zone of Manu National Park and 1300 ha within the Natural Protected Area. It also allowed the coexistence between families and wildlife resulting in benefits for over 60 Mapacho Valley families.

The project "Enabling Conditions for Investment in the Transition to a Low Carbon Society" spotlighted the topic "Solar Panels in Private Companies: From NDC to Investment." Their analysis of photovoltaic projects in Peru demonstrated how environmental responsibility can be integral to successful business strategies, exemplified by Alicorp's implementation in Arequipa.

The final presentation, "Financial Instruments and Products with Impact on Biodiversity," by the project "Impact Investments for the Sustainable Use of Biodiversity”, first showcased private sector microcredit developed with Caja Municipal de Ahorro y Crédito Ica, enabling biodigester acquisition and thus promoting the adoption of technology for the use of waste from livestock production. The second was the incorporation of eligibility criteria and environmental indicators in the instructions for business plans and productive reconversion projects with the Ministry of Agrarian Development and Irrigation’s program “Agroideas”.

Finding thematic synergies between IKI Peru projects

To conclude, participants engaged in a collaborative session to delve into the requirements of green finance and explore potential synergies to enhance cooperation among IKI projects in Peru. 
 

IKI priority country Peru