ArmInfo. Without a comprehensive approach, the development of a sustainable capital market is impossible. Shushanik Hovsepyan, Head of Capital Markets at Ameriabank, expressed this opinion in an interview with journalists on the sidelines of an event dedicated to the potential of capital markets in financing environmental and climate initiatives, which was held as part of COP17 at the initiative of the Armenian Securities Exchange and the UN Exchanges for Sustainable Development Initiative. (UN SSE).
Recalling that Ameriabank is a pioneer in the green bond market not only in Armenia but also in the region, she noted that, in addition to a sense of pride, this reflects a great responsibility to share its accumulated experience and participate in shaping the agenda for the development of a sustainable bond market.
Referring to the results of the discussions, Hovsepyan emphasized that the obstacles to more accelerated market development are due to a multitude of factors, and therefore, the cooperation of all stakeholders, including regulators, the government, issuers, and investors, is essential.
According to the Bank's representative, the role of the government is particularly important in this process. It should implement either incentive mechanisms or certain restrictions that will draw the attention of economic entities to the seriousness of the topic of sustainable development and consider the capital market as a source of financing for potential green projects that have a positive impact on the environment.
Answering a question from an ArmInfo correspondent, Ovspeyan regretfully noted that the size of this market segment is insignificant, but since 2020, when Ameriabank first issued green bonds, three more issuers have entered the market, two of which are companies with which Ameriabank worked and assisted in the process.
"I have the impression that today there is a general awareness that something needs to be done, and not just hoping that some private companies that are leading the way in this field will be able to develop this market. This is not as realistic as it may seem. Because our goal should not be so much to help green businesses, but to encourage others to become greener and more responsible. And this is impossible without a systemic approach. I especially can't imagine this without the direct participation of the state," she said. In this vein, citing international experience, the Head of Capital Markets at Ameriabank noted that in countries where institutional investors are not sufficiently developed to be a driving force, certain incentives from the public sector are necessary. "Yes, development is possible without this, but it will be very slow and will be determined by the successful experience of individual companies," she noted.
According to Hovsepyan, given that the state has set specific sustainable development goals related to energy conservation, environmental protection, air quality, etc., the time is ripe for implementing concrete steps. "I am confident that the financing component will play a major role in all of this, meaning that assistance will enable businesses to take a more responsible approach and present projects that are not only financially attractive and sustainable, but also have a positive impact on the environment and sustainable development," she noted.
In an interview with journalists, Tiffany Grabski, a representative of the UN Sustainable Development Exchanges (UN SSE), stated that Armenia is rich in biodiversity, which needs to be protected and preserved. She emphasized that nature and biodiversity are important not only for the population as a whole, but also for businesses. Grabski noted that any business in Armenia will depend on nature to some extent.
Referring to the results of research, the UN SSE representative reported that 50% of global corporate GDP depends on nature. And when it comes to the need for water and clean air, then this affects every company. "Therefore, it's important where green financing goes and how its resources will be used," Grabski said. She also noted the need to increase funding for environmental protection. Currently, she noted, if $30 worth of damage is caused to nature and biodiversity, companies only allocate $1 to cover the damage and protect the environment. "That means we have a long way to go to achieve our goals," Grabski emphasized.
In turn, Maria Hakobyan, a representative of the Armenian Securities Exchange (AMX), emphasized the importance of increasing the education of all market participants so that they understand how to reduce issuers' costs, how to increase interest in green financing instruments by making them more efficient, etc.
Answering a question from an ArmInfo correspondent, Hakobyan noted that there has been some movement in the market over the past few years. In this regard, she noted the role of the Regulator (the Central Bank), which, according to her, has done a great deal to regulate the industry. "We are only at the beginning of the journey, but the most important thing is that this start has already been made," she emphasized.
As a reminder, on November 30, 2020, Ameriabank issued green Eurobonds worth $50 million equivalent, marking a significant milestone in the local financial market as the first-ever green bond project in Armenia. Ameriabank's debut green bonds were issued in cooperation with the Dutch Enterprise Development Bank, which is also the anchor investor in this transaction.
