Interview with the Director General of Economics and Environmental Financing, Elvis García.
The Ministry of the Environment (Minam) and the Ministry of Economy and Finance of Peru (MEF) will organize the first International Forum on Green Finance in Lima between Monday, September 16 and Wednesday, September 18, with the aim of analyzing opportunities for finance and investments with an environmental focus in Peru and the world.
Minam's Director General of Environmental Economics and Financing, Elvis García, provides further details in this regard in an interview with the newspaper El Peruano.
- What is the purpose of this event?
–The aim is to mobilize the resources of the financial sector towards themes or projects with a positive environmental impact at the level of different economic sectors. The objective is to focus the discussion in Lima on the drive and importance of green finance for the sustainable development of Peru and of different economies in the world.
- Who will participate in this forum?
- There will be an exchange of experiences between more than 74 international speakers, with panelists from different countries in Europe, Africa, Asia, South America and Central America who, based on their positions within the private sector and from the Ministries of Finance, in the public sector, will discuss the development of innovative financing mechanisms for biodiversity, for the climate, among other matters.
- What is the economic impact you hope to achieve?
–We want to continue promoting activities in the green finance roadmap. Within this framework, our goal is to mobilize US$ 5.8 billion by 2030 in environmentally positive projects in the different economic sectors: agriculture, fishing, construction, energy, among others.
- What would these resources be used for?
–The idea is to benefit the different producers or entrepreneurs who are linked to these production chains. The 2.2 million farmers in the country, through these green financial instruments, could have incentives to promote the development of one million cattle ranchers who, through the acquisition of assets to manage their waste, can also access cost reductions, among others. These are some of the chain benefits that come with the use of eco-friendly and sustainable technologies.
- What is the potential of green finance in our country?
–If we talk only about the topic of biodiversity, it is estimated that in our country more than US$ 13 billion is mobilized as income in this sector, more than 3% of the Gross Domestic Product (GDP) coming from economic activities that use resources from agriculture, for example.
By 2022, it was estimated that the financing directed to these economic activities that require sustainable business models with biodiversity would not exceed 6.5% of the total placement of credits in the financial system.
So, this shows us, in terms of numbers, that in order to promote the financing of production chains prioritized with these biodiversity-friendly business models, a demand of US$ 740 million per year is required.
- Have you detected gaps at the regional level?
–Yes. To promote development in bio-businesses in the Amazon alone, based on a study conducted by the Inter-American Development Bank (IDB), it is estimated that US$ 100 million per year are needed.
These funding gaps represent an opportunity to contribute to the mobilization of not only public resources, which the Peruvian State undoubtedly has within the framework of its commitment to different international conventions on environmental matters, but also from the private sector.
Peru, being a mega biodiverse country, is an attractive nation for channeling sustainable investments, so within the framework of green finance we are in an important race to be able to advance in generating the conditions to be able to receive these resources.
RENEWABLE ENERGY
The Director General of Environmental Economics and Financing at Minam says that renewable energies have a high potential to be addressed by the financial system due to their high level of profitability and, in turn, their contribution to the objectives to address climate change.
“The first task is to continue creating the conditions for these strategic activities to emerge and be accepted by the financial market for financing. Another task that Minam obviously has is to create the conditions in terms of regulation,” he said.
García points out that there is still “a lot of work” to be done with the private sector to promote the national roadmap towards a circular economy, which is currently being drawn up, as well as the regulatory frameworks that are being developed at different levels for its application.
“At Minam we seek to contribute to the development of this type of investment without losing sight of the sustainable use of resources,” he said.
DATA
- The International Green Finance Forum will address the importance of this type of financial resources in international markets towards a sustainable economy.
- Minam and MEF will promote dialogue on the supply and demand of green financial products. They will also raise awareness of the role of the financial system as an agent of change for an environmentally responsible economy.
- Another objective is to raise awareness to redistribute private sector resources towards more sustainable alternatives.
