The Ministry of Environment, Superintendency of the Securities Market (SIMV) and the International Finance Corporation (IFC) announced on 23 February 2022 the official start of the Caribbean Green Financing Frameworks, the IFC project to support the Dominican Republic in engaging the financial sector, regulators and supervisors, key ministries and other stakeholders, and private sector in the creation and development of a national green taxonomy to enable green financing.
The two-year project has an estimated total budget of US$611,799. The overall project objective is to support the Dominican Republic in developing a green taxonomy for the financial sector that will generate green investments through financial institutions or capital markets and perform preliminary activities to assess the way forward in the English-speaking Caribbean (EsC).
The IFC explains that through working with the local financial sector, a clear standard for green assets will be developed and published in the form of the green taxonomy. The project will facilitate engagement with stakeholders to gain consensus through socialization and capacity-building activities and work in greater depth with financial institutions.
Part of the groundwork and complementary work with financial institutions will identify activities or investments that can move the Dominican Republic toward meeting climate mitigation targets and support the growth of domestic green financial markets.
The project will build foundations for subsequent regulatory frameworks and incentives for issuing green financial products and coordinate across the World Bank Group and other actors to ensure progress in these complementary areas. Project implementation will begin in the Dominican Republic and initiate engagement in selected EsC countries over 24 months.
The green taxonomy will provide the country with classification tools to help investors and companies make informed, science-based investment decisions on sustainable environmental activities.
The launching ceremony of this project was signed by the Minister of the Environment, Orlando Jorge Mera; the Superintendent of the Securities Market, Gabriel Castro; and the Resident Representative of the International Finance Corporation (IFC) in the Dominican Republic, Carolina Cárdenas.
These institutions have selected various sectors to promote green taxonomy in the country — energy, transportation, construction, information and communication technologies (ICT), industry, water and waste.
This project will also provide clear definitions of activities or investments that incorporate national environmental objectives, such as addressing climate change or reducing deforestation.
The taxonomy to be developed will not only examine existing taxonomies such as the European Union model, but will also consider the IFC taxonomy or the Climate Bonds Initiative (CBI) taxonomy to support informed decision-making, establishing a common and official criterion for the private and public sector to promote the development of green finance.
The project implemented in the country will follow the environmental priorities established by the Dominican Republic authorities both in national policies and guidelines (National Climate Change Plan), as well as in international treaties of Nationally Determined Contributions (NDCs), a commitment made before the 2015 Paris Agreement.
The project also has the backing of the Spanish government’s Ministry of Economic Affairs and Digital Transformation that was represented at the event by Clara Fernández Martin, Economic and Commercial Counselor of the Embassy of Spain in the Dominican Republic.
Carolina Cardenas, IFC Resident Representative for the Dominican Republic, said: “For IFC it is an honor to collaborate in developing this green taxonomy for the Dominican Republic. We are confident that this unprecedented effort will result in a growth of green capital mobilization in the country, as well as a demonstrative example for the Caribbean region.”
“This taxonomy will mark the starting point in financing growth towards a climate-resilient Dominican Republic, establishing clear definitions of activities or investments that incorporate national environmental objectives to determine which investments can be labeled as sustainable or green,” said Environment Minister Jorge Mera.
Read more:
Superintendency of Market Securities
IFC
World Bank presentation on green taxonomy
El Dia
24 February 2022