Central Banks of Pacific Island Nations Sign Natadola Roadmap to Boost Inclusive Green Finance

Central Banks of Pacific Island Nations Commit to Boosting Inclusive Green Finance

In a groundbreaking move, the central banks of seven Pacific island nations have signed a roadmap to enhance inclusive green finance (IGF) in a region highly vulnerable to climate change. The Natadola roadmap, named after the beach resort where it was signed, brings together the central banks of Fiji, Papua New Guinea, Samoa, the Seychelles, the Solomon Islands, Tonga, and Vanuatu.

The roadmap prioritizes regional capacity building in green finance and encourages collaboration in funding and technical expertise among countries. It also emphasizes the importance of a just transition to net zero, taking into account the diverse needs and capacities of different states.

Pacific Island nations like Fiji and Vanuatu have already made significant strides in implementing IGF policies, incorporating disaster resilience into their regulatory frameworks. The Central Bank of Papua New Guinea has introduced an Inclusive Green Finance Policy with a green taxonomy that includes micro, small, and medium enterprises.

The roadmap was signed under the Pacific Islands Regional Initiative (PIRI) Plus, a part of the Alliance for Financial Inclusion (AFI). It aims to build on the 2017 Sharm El Sheikh Accord on green finance, promoting a financially inclusive response to climate change in developing countries.

Governor Ariff Ali of the Reserve Bank of Fiji highlighted the critical role of central banks in addressing climate risks, linking environmental considerations to macroeconomic frameworks. The urgency of enhancing resilience against environmental shocks was underscored by recent natural disasters in the region.

Pacific island nations are particularly vulnerable to rising sea levels and extreme weather events, despite contributing minimally to global greenhouse gas emissions. The cost of climate damage in these nations is estimated to be around 10% of their GDP annually.

The commitment of these central banks to inclusive green finance marks a significant step towards building a more sustainable and resilient future for the Pacific island nations.