Zambia's Central Bank secures funding from the NDC Partnership with support from UNDP Zambia Country Office and BIOFIN Zambia

Earlier in 2023, the Bank of Zambia (BOZ), with technical assistance from Biodiversity Finance Initiative (BIOFIN) and the United Nations Development Programme (UNDP) Zambia Country Office undertook proactive measures to jointly develop a concept note for submission to the NDC Partnership Action Fund (NDC-PAF) pertaining to a project on the implementation and strengthening of the Bank of Zambia’s Green Finance Framework and Green Loans Guidelines. This was partly meant to Integrate the Bank of Zambia’s work streams on green loans and green finance guidelines into the wider work being undertaken by the Biodiversity Finance Initiative (BIOFIN) on green finance mainstreaming with other financial sector regulators notably development of the green finance policy for the financial sector, green bonds market development as well as the development of the green finance tagging and reporting mechanisms for the financial sector in Zambia. These efforts emerged positive as Zambia’s Central Bank was awarded a total US$244,023.84 in funding from the NDC-PAF, along with an additional US$25,000 of in-kind contribution from UNDP to facilitate the realization of the project. The NDC-PAF provides support to countries that are signatories to the Paris Agreement in their efforts to implement their Nationally Determined Contributions (NDCs), typically revolving around climate action and green financing.

The proposal by the Bank Zambia with technical support from UNDP Zambia and BIOFIN Zambia was aimed at facilitating the mobilization of financial and technical support to implement the BOZ’s gazetted Green Finance Framework and Green Loans Guidelines. BIOFIN Zambia’s role is in this project will further be extended towards the provision of facilitation and lead technical assistance services including the delivery of capacity-building activities on the green finance framework and the operationalization of the guidelines.

Tailored efforts to synergize the BOZ’s Green Finance Guidelines and the Green Finance Framework with BIOFIN Zambia’s ongoing work streams on the development of a green finance policy for the financial sector, creation of a green finance taxonomy have also been put in place. The project is expected to be finalized during the course of 2024 and is targeted at attaining climate and biodiversity positive results as strategic contributions to the ambitions set forth in the United Nations Framework Convention on Climate Change (UNFCCC) and the United Nations Convention on Biological Diversity (UNCBD).

Key outputs of this projects are as summarised below;

Output 1: Green Finance Guidelines and Green Loans Guidelines developed by BOZ reviewed and strengthened.

Output 2: A hands-on capacity building program and virtual peer exchange on green finance and the operationalization of the guidelines. The capacity building program will cover topics such as the Task Force on Climate-related Financial Disclosures (TCFD), Task Force on Nature-related Financial Disclosures (TNFD), and the Basel recommendations on sustainable finance;

Output 3: Proposition and drafting of regulatory and supervisory instruments to operationalize the guidelines in line with the country context and international best practices such as TCFD, TNFD, and the Basel recommendations on sustainable finance;

Output 4: Integrate the work on green loans and green finance guidelines into the wider work being undertaken by the Biodiversity Finance Initiative (BIOFIN) on green finance mainstreaming with other financial sector regulators notably development of the green finance policy for the financial sector, green bonds market development as well as the development of the green finance reporting mechanisms for the financial sector.