OLGA IZRYADNOVA: “MOSCOW HAS ISSUED A NEW INSTRUMENT TO RAISE FUNDS TO SOLVE ENVIRONMENTAL ISSUES”

Olga Izryadnova, Head of the Structural Policy Department, Gaidar Institute told the Izvestia daily if regions would be able to attract investments via “green” bonds.

Late in May, Moscow was the first among Russian regions to issue its own “green” bonds. Such securities make it feasible to raise target funds to carry out projects on ecological protection or reduction of possible damage to the environment. Unlike ordinary bonds, “green” bonds suggest higher responsibility for issuers: the raised funds can be used only on sustainable projects which goals are to be approved in advance and the issuer has to report to investors on a regular basis how funds have been spent.

Moscow’s main objective to enter the “green” bonds market is aimed at funding the development of the city’s transport infrastructure in order to reduce pollutant emissions.

“The growing needs in funding expenditures on pollution prevention, emissions reduction and mitigation of climate change suggest the consolidation of public and private entities’ efforts in the implementation of large-scale environmental security projects,” Olga Izryadnova notes.

“Taking into account the long-term nature and scope of investments in environmental projects, in practice various risk sharing instruments, advantages and profit margins are used. “Green bonds” are an instrument of target financing of clean technologies,” the expert believes.