PROJECT FINANCЕ AS A CATALYST FOR THE TRANSITION TO GREEN AND ESG FINANCING

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides a comprehensive review of green finance mechanisms and project finance's catalytic role, useful for studying transition finance models.

🏢実務担当者:Offers actionable insights on structuring project finance to meet ESG standards, particularly for banks considering green lending.

🏛政策担当者:Highlights the importance of national taxonomies and regulatory frameworks for mobilizing green project finance, relevant for reconstruction and energy transition planning.

The article is devoted to the study of the experience with applying green and ESG financing mechanisms, as well as the use of project financing as a tool to accelerate the transition to green and ESG lending standards. The international practice of implementing green and ESG financing mechanisms is reviewed, in particular, certain mechanisms in the EU. The EU is a world leader in green financing, stimulated by the EU Green Deal policy and regulatory framework. International practice demonstrates that banking institutions are poised to play a leading role in the development of a green economy. In particular, the European Union is actively implementing green financing mechanisms, including the EU Taxonomy for Sustainable Activities, which establishes criteria for identifying environmentally sustainable projects. The use of loans to ensure sustainable development enables obtaining corporate loans where the bank interest rate is tied to the borrower’s achievement of specific, predetermined ESG indicators. The application of project financing approaches has been studied, thanks to which "green" projects become attractive for financing. In particular, investors see a clear structure, understand the risks and effectiveness of projects, which contributes to the increased participation of banks in their financing. Project finance mechanisms provide an opportunity to mobilize significant amounts of capital, in particular through the creation of consortia for the implementation of a single project, syndicated financing, and encourage banking institutions to review their approaches to risk assessment. In particular, financial and credit institutions are forced to assess not only financial, but also environmental and social risks in order to understand the realism and effectiveness of project implementation. Separate areas for attracting financial resources under the project financing scheme, with due regard to ESG standards, are proposed for the post-war reconstruction of Ukraine. The implementation of ESG standards is key to recovery, as it addresses pressing environmental challenges (ecosystem restoration, demining, decarbonization) while stimulating the development of a circular economy and new sustainable sectors, including renewable energy. The effectiveness of the application of "green" financing mechanisms in Ukraine depends on the adaptation of the institutional environment, where banks are the central link. An important task is to develop a National Taxonomy of Sustainable Finance, harmonized with EU norms; integrate ESG risks into the management system. The experience of EU countries makes it possible to improve project financing models for the reconstruction of Ukraine.

• openaire https://doi.org/10.32782/2413-9971/2025-58-22first seen 2026-05-14 21:38:26