Phengsy Phengmuong, and Thomas Jacobs present the MOU after the signing ceremony on Sept 26 in Vientiane. - VT
VIENTIANE (Vientiane Times/Asia News Network): A new partnership between the Bank of the Lao PDR (BOL) and the International Finance Corporation (IFC) aims to upgrade “green finance” in Laos.
A Memorandum of Understanding (MOU) on green financial assistance was signed in Vientiane on Monday (Sept 26) between the two parties.
The event was witnessed by the Governor of the BOL, Dr Bounleua Sinxayvoravong, and IFC Vice President for Economics and Private Sector Development, Susan Lund, with representatives of the central bank and IFC also present.
The agreement was signed by the Director General of the International Cooperation Department of BOL, Phengsy Phengmuong, and IFC Country Director for Laos, Vietnam and Cambodia, Thomas Jacobs.
The central bank and IFC previously discussed collaboration and technical assistance in developing a market for green finance to create an enabling environment for financial institutions to transition to green lending, increasing green investment, promoting green growth and contributing to Laos’ commitment to the Paris Agreement on climate change, which was signed in 2016.
The move also supports work towards the fulfilment of the Sustainable Development Goals set by the United Nations.
To achieve these goals, many countries are turning to the finance sector as a driver in sourcing funds to boost sustainable projects and environment-friendly investment. The International Finance Corporation has many years of experience in green finance.
The newly-signed MOU on green finance technical assistance is seen as an important milestone in green finance work to support the growth of Laos’ economy.
The partnership will start with a market readiness assessment to review the current framework for green finance and identify market opportunities for potential green financing products.
This will allow the finance sector to consider ways to improve the enabling environment for green finance.
This will be done through development of a sustainable finance roadmap, a climate risk assessment framework for the financial system, and a harmonised green taxonomy, as well as regulations and guidelines on green finance and bonds, while developing a robust green finance market in line with international standards.
Apart from partnering with IFC on green finance, the BOL has also contributed to Asean Sustainable Finance.
In addition to the MOU signing, the two sides discussed the current business environment in Laos and opportunities for the IFC to provide advisory services for businesses in order to develop the private sector.
