We assessed whether and to what extent the provision of technical assistance can help to transform the finance sector, using the example of support provided in the context of green bonds in China and Kenya.
Main findings:
In China, the government enacted a number of financial sector reforms to ease green finance flows, including green bond regulations. Technical assistance played a key role in supporting the establishment of China’s green bond market.
In Kenya, the Kenya Bankers Association, together with the Nairobi Securities Exchange and international donors launched a Green Bond Programme in 2017. However, several barriers hindered the establishment of a green bond market in the country. Technical assistance activities played a role in lowering some of these barriers.
Based on interviews conducted with key experts in the Kenyan and Chinese green bond markets and desk-based research, we identified a number of lessons for policy-makers and providers of technical assistance to spur transformative change in the finance sector through the development of a green bond market. These include:
- Technical assistance should be dynamic and able to adapt to changing requirements;
- Technical assistance should identify first-movers, build their capacities and local ownership;
- Technical assistance should focus on developing a local market for green bonds;
- Providers of technical assistance should ensure local presence;
- It can be useful to base technical assistance on the exchange of international best practice, while taking into account the local circumstances.
Even if technical assistance can be a critical element to support transformative change in the finance sector, on its own it will not be sufficient to transform the sector.
Learnings from both studies feed into a larger thematic study on “International Climate Finance and support to national climate policy processes in emerging markets” which will be published in July 2021.
This work is part of the project “Strengthen national climate policy implementation: Comparative empirical learning & creating linkage to climate finance (SNAPFI)”.
Contact for further information: Silke Mooldijk, Julie Emmrich, Katharina Lütkehermöller
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