Tajikistan has officially entered the green finance market with the successful issuance of its first medium-term green government bonds, according to the Ministry of Finance.
The auction, held on October 17, offered 200 million somonis (approximately $22 million) worth of bonds. Investor demand significantly exceeded expectations, reaching 270 million somonis, or 35% above the offering, signaling strong market interest.
The bonds were placed at a 13% annual yield, a rate notably higher than the yields of previous conventional government bonds, which were typically below 10%. The Ministry of Finance did not disclose the identities of the buyers, citing confidentiality regulations.
What are green bonds?
Green bonds are a type of debt instrument where the proceeds are exclusively used to fund projects with positive environmental or climate-related benefits, such as renewable energy, clean transportation, and green buildings. They work like traditional bonds, with investors lending money to the issuer in exchange for interest payments, but with the added commitment to use the funds for specific "green" projects. Issuers are often governments, municipalities, and corporations, and they commit to providing detailed information on how the funds are used and the impact of the projects.
According to the Finance Ministry, funds raised from this issuance will be directed toward green projects in Tajikistan, particularly in the areas of renewable energy, water resource management, and environmental protection.
A milestone for sustainable finance
Experts say the 13% yield reflects the risk premium for a new and emerging market but also indicates growing investor confidence in Tajikistan’s green transition strategy.
The launch comes as part of the country’s Green Economy Development Strategy (2023–2037), which aims to shift Tajikistan toward a low-carbon and climate-resilient growth model.
In February 2024, Tajikistan saw the issuance of its first corporate green bond, when Bank Eskhata, in partnership with the International Finance Corporation (IFC), raised funds to finance climate-resilient projects.
This latest move—introducing green bonds at the national level—is viewed as a foundational step in building a sustainable finance market in Tajikistan. Officials hope it will help attract long-term investments into environmentally significant sectors and boost international investor confidence.
