USAID may join in to help develop the green bonds market in Ukraine
The State Agency for Energy Efficiency and Energy Conservation is interested in the American experience concerning tax stimulation of the green bonds market
The United States Agency for International Development (USAID), an independent agency of the United States federal government, and the State Agency of Ukraine for Energy Efficiency and Energy Conservation agreed to consider the options of potential cooperation aimed to develop the green bonds market in Ukraine, the Agency’s website reports after the meeting between the Agency’s Chairman Kostiantyn Gura and USAID’s representatives.
“The United States is one of the best examples of organizing the green bonds market,” the Energy Efficiency Agency explains the initiative.
In particular, the Agency showed interest in the American experience concerning tax stimulation of municipalities and investors under Clean Renewable Energy Bonds (CREBs) and Qualified Energy Conservation Bonds (QECBs) programs. Under these programs, in particular, the issuer municipalities are provided monetary subsidies from the government to lower the interest rate on payments under green bonds or are relieved from taxation, while investors are offered a tax credit.
“We are going to organize the implementation of pilot projects featuring the issuance of green bonds by various issuer categories. In order to carry this initiative through, we need quality feasibility studies of “green” projects,” Mr. Gura said.
After the meeting, the parties agreed to consider the options of potential cooperation in this area, in particular: developing mechanisms and programs stimulating the growth of the green bonds market; providing expert support for preparation of high-quality feasibility studies of “green” projects; helping engage financial institutions and investors to finance “green” projects.
As follows from the press release, work in this area has already begun at the bylaw level, which must create mechanisms for implementation of the specialized law. In particular, the green bonds market development concept prepared by the Agency envisages development of stimulating mechanisms and programs for this market.
“International experience proves that to organize the green bonds market, the practice of government stimulation and improving investment attractiveness of green bonds is commonly used. Incentives are applied both to investors and to issuers. It encourages new players to enter the market and increases interest in “green” projects,” the State Agency for Energy Efficiency and Energy Conservation says.
