Report by Maxim Titov
Abstract: The seventh Central Asia Climate Change Conference (CACCC-2025), held in Ashgabat, focused on mobilizing climate finance to support low-carbon and climate-resilient development in the region. During the session organized by the World Bank’s Coalition for Capacity for Climate Action (C3A), Maxim Titov from the ENERPO Research Center presented on financing energy and climate projects in Central Asia. The discussion highlighted the region’s underfunding in adaptation, the growing role of international development banks, and the potential of innovative financial instruments such as green bonds and blended finance. Strengthening analytical tools for assessing climate finance strategies, regulatory frameworks, and regional cooperation were identified as key components to advancing climate finance in Central Asia.
Keywords: adaptation, blended finance, Central Asia, climate finance, energy transition, green bonds, sustainable development
Максим Титов (ИЦ ЭНЕРПО) выступил с докладом о климатическом финансировании на Центрально-Азиатской региональной конференции по вопросам изменения климата в Ашхабаде
Аннотация: Седьмая Центрально-Азиатская конференция по вопросам изменения климата (ЦАКИК-2025) в Ашхабаде была посвящена мобилизации климатического финансирования в целях поддержки низкоуглеродного и климатически устойчивого развития региона. В рамках сессии, организованной Инициативой Всемирного банка «Коалиция за потенциал в области климатических действий» (C3A), Максим Титов, представляющий Исследовательский центр ЭНЕРПО, выступил с докладом о финансировании энергетических и климатических проектов в Центральной Азии. В ходе обсуждения были отмечены недостаточный уровень финансирования мер по адаптации в регионе, возрастающая роль международных банков развития, а также потенциал инновационных финансовых инструментов, таких как зеленые облигации и смешанное финансирование. В качестве ключевых условий продвижения климатического финансирования в Центральной Азии были выделены необходимость улучшения аналитической базы для оценки стратегий финансирования климата, совершенствования нормативно-правовой базы и развития регионального сотрудничества.
Ключевые слова: адаптация, зеленые облигации, климатическое финансирование, смешанное финансирование, устойчивое развитие, Центральная Азия, энергетический переход
The Regional Environmental Center for Central Asia (CAREC) has been organizing the Central Asia Climate Change Conference (CACCC) since 2018 to facilitate regional dialogue on climate change mitigation and adaptation. This year, the seventh conference was held in Ashgabat from May 13-15 with the theme of “achieving the global goal of climate finance through regional and national action in Central Asia.”
Central Asia faces significant vulnerability to climate change, particularly in the areas of water and energy resources, agriculture, land management and disaster risk reduction. Recent studies show that temperatures in Central Asia are rising faster than the global average, leading to both increasing deserts and melting glaciers.
The conference participants discussed the progress of Central Asian countries in mitigation and adaptation to climate change, including consideration of achievements in preparation for the next phase of NDC (NDC 3.0). The key topics of the conference were the following areas:
- climate finance
- effective governance
- harmonization of financial policies to achieve climate goals
The region is clearly underfunded, especially in terms of adaptation to climate change. Participants of CACCC-2025 also noted that realization of Central Asia’s potential for transition to a greener, cleaner and climate-resilient environment is directly related to ensuring water and energy security in the region.
Maxim Titov, Research Fellow at the Energy Policy and International Relations Research Center (ENERPO), participated in the “Innovative Tools for Developing Climate Finance Strategies in Central Asia” session organised by the World Bank’s Coalition for Capacity for Climate Action (C3A) initiative in cooperation with the Ministries of Finance of the countries in the region.
Central Asia is increasingly vulnerable to the effects of climate change, with growing implications for water security, energy systems, agriculture, and health. Addressing these challenges requires a significant increase in climate finance, especially given the limited capacity of countries’ national budgets and growing developmental financing needs. Innovative financial instruments and strategic sectoral reforms pave the way to unlocking new sources of climate finance and aligning national development priorities with climate goals.
The World Bank’s C3A initiative, in collaboration with finance ministries from around the world, is exploring cutting-edge approaches to climate finance that can be adapted and extended to Central Asian economies. The session focused on three central themes:
- Innovative Financial Instruments to Combat Climate Change
What are the opportunities and challenges of using green bonds, debt for climate action (climate swaps), sustainability-related instruments, and blended finance solutions in the region? Are there relevant examples of global and regional experience, and what is the potential for scaling up such instruments in Central Asia?
- Analytical Approaches to Assessing the Macroeconomic Impact of Climate Finance
What are analytical approaches to assessing the economic and fiscal impacts of innovative climate finance strategies? How can such approaches help to incorporate climate, balance of payments, and debt financing risks into macroeconomic frameworks? In particular, what experience do countries have to date in public investment planning and evidence-based decision-making by finance ministries?
- Improving the Regulatory Framework for Mobilizing Climate Finance
What is the role of carbon pricing, subsidy reform, regulatory frameworks and public investment planning in mobilizing climate finance? How can targeted fiscal policies and incentives reduce the risk of private investment in low-carbon sectors? What experience do countries have in designing and implementing coherent regulatory policies to accelerate the energy transition?
Maxim Titov presented a report titled “Financing energy and climate projects in Central Asia: sovereign and non-sovereign investments, private funds” within this session, which was devoted to the following aspects of climate finance:
- The role of international financial institutions in financing water, energy and climate initiatives in Central Asia.
- An overview of sources of sovereign and non-sovereign finance, including investment loans, stabilisation loans, grants and technical support projects were covered:
- Total energy, water, and climate finance exceeded $1 billion in 2024, with the Asian Development Bank and the World Bank leading the region in terms of approved sovereign financing.
- China is an emerging major player: the financing provided is of strategic importance to both China itself and countries in the region. Investments are mainly used for infrastructure projects as well as in the energy sector.
- The review covered five countries in the region: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. It was noted that financing is unevenly distributed, and underfunding is particularly noticeable in the area of climate change adaptation.
- The role of international development banks was examined, namely the four key areas of the MDBs’ work related to sustainable development, including expanding financing and mainstreaming the UN Sustainable Development Goals into business processes, advancing the agenda and setting standards, and mobilizing private finance.
- The role of technical assistance programs is increasing. All international development organizations report that technical assistance and capacity building programs are in high demand by local governments. Knowledge sharing, capacity building and train-the-trainer programs are areas where technical assistance is in demand and welcomed.
Overall, the Ashgabat climate finance session provided a useful exchange of knowledge and experience on the use of innovative financial instruments in climate finance. New analytical tools for assessing the macroeconomic implications of different climate finance strategies were discussed. It continues to be important to exchange views and explore how harmonized regulatory practices such as carbon pricing, regulations and public investments can incentivize private and public climate programs. Such discussions facilitate regional dialog and mutual learning between finance ministries and major stakeholders.
Key conclusions and recommendations of the session:
- Improve the analytical framework for assessing climate finance strategies in Central Asian countries
- Provide capacity building and support for the development of such strategies
- Evaluate different climate finance instruments and their application in Central Asian countries
- Facilitate regional dialog on climate finance approaches
About Maxim Titov
Maxim Titov is the Managing Director of the ENERPO Research Center. His research interests include policy development and advocacy for sustainable energy and climate finance.
Address for correspondence:
mtitov@eu.spb.ru