Mitigating the impact of climate change: Papua New Guinea’s Inclusive Green Finance journey

Elizabeth Genia, Acting Governor, Bank of Papua New Guinea. 

Papua New Guinea is one of the ten most vulnerable countries in the world to the risk of climate change. The human suffering which climate disasters bring, the displacement of people and destruction of livelihoods, is therefore never far from our minds. Building resilience to climate impacts is a top policy priority, and one where inclusive green finance (IGF) is playing a central role.

IGF involves supporting vulnerable groups through savings, credit, insurance, money transfers and new digital delivery channels. Our IGF journey began in 2021, when the Bank of Papua New Guinea (BPNG) engaged with the Global Green Growth Institute (GGGI) through the Center for Excellence in Financial Inclusion (CEFI), a Papua New Guinean NGO established by BPNG in 2014. We began developing a National Inclusive Green Finance Policy for the banking sector, to boost financial inclusion and guide investment towards low-emission and climate-resilient development. This collaboration was possible thanks to funding from the New Zealand Government.

Following broad agreement on the concept, a steering committee was set up, chaired by BPNG, involving the Office of Climate Change, Department of Treasury, Alliance for Financial Inclusion and the New Zealand High Commission, with GGGI as observers. The technical committee has over 30 representatives from various industries and government departments.

This stage of the journey concluded on 12th June 2023, when our Prime Minister officially launched Papua New Guinea’s Inclusive Green Finance Policy, the first of its kind in the Pacific.

(l-r) Elizabeth Genia (BPNG), Remy Rioux (AFD), Sakiusa Tuisolia (GGGI)

 The next phase will involve establishing an Inclusive Green Finance Center within CEFI. This body will help coordinate IGF activities in the country, providing support in the form of staff training, technical assistance, and the design of innovative green lending products. I would like to thank the New Zealand government for funding this vital phase of the project.

We are also working with the French Government. In July 2023, in the presence of President Macron, we signed a Letter of Intent with the French Development Agency (AFD) and GGGI for a refinancing facility covering loans made by PNG’s commercial banks for programs identified as green and having low carbon emissions.

Our Inclusive Green Finance journey has only started, but we have made good progress. Looking forward, a key priority will be to assist smaller Pacific Island countries with their own IGF journeys. Climate change affects all of us: we have much to gain by listening to, and helping, each other.