Kazakhstan has emerged as Central Asia’s leading market for green and sustainable bonds, while there is strong potential in other countries in the region, according to Manas Gizhduaniyev, chief executive of the AIFC Green Finance Centre (GFC).

“Our key mission is to promote the development of green and sustainable finance in Kazakhstan,” Gizhduaniyev told a briefing on the sidelines of the Regional Ecological Summit 2026 in Astana in April, noting that the centre operates across all Central Asian countries as a subsidiary of the Astana International Financial Centre.

Over the past five years, the GFC has played a central role in establishing the foundations of the market. “We were instrumental in terms of developing the green taxonomy for Kazakhstan and supporting the first ever green bond, social bond and sustainable bond in Kazakhstan, Kyrgyzstan, Uzbekistan and also Azerbaijan,” he said.

The centre acts primarily as a verifier of green bonds, a role governed by international standards. “There are two organisations – the Climate Bonds Initiative, which develops the climate bonds taxonomy, and the International Capital Market Association, which develops green, social and sustainable bond rules,” Gizhduaniyev said. “These organisations have a list of approved verifiers. There are around 15-16 globally, and we are the only one in Central Asia with dual accreditation.”

Kazakhstan’s green bond market began modestly. “The first ever green bond in Kazakhstan and Central Asia was issued in 2020 by the national company Damu Fund. The amount was very small; it was a pilot,” he said. At the time, financial institutions lacked experience. “Companies didn’t know how to utilise these green finance instruments, but UNDP subsidised the coupon payment and we verified it.”

Since then, issuance has expanded significantly. “A lot of national companies came to the market. Subsidiaries of Samruk-Kazyna and Baiterek Holding issued green bonds, social bonds and sustainable bonds,” he said.

Kazakhstan now dominates the regional market. “There is around $3.5bn in outstanding sustainable bonds in Central Asia, and in Kazakhstan the market is about $2.9bn,” Gizhduaniyev said. Together with Uzbekistan, Kazakhstan is one of the two regional leaders, though their markets differ in structure.

“In Kazakhstan, thematic bonds are mainly utilised by corporates – banks and national companies,” he said. “But in Uzbekistan, the Ministry of Finance has issued several sovereign green bonds and ESG bonds. The sustainable finance market there is driven by the government, whereas in Kazakhstan it is driven by the private sector and national companies.”

Domestic stock exchanges have played a role. “In Kazakhstan, sustainable bonds are mainly issued on local stock exchanges – Astana International Exchange and KASE. These exchanges support issuance and have waived listing fees for green, social and sustainable bonds,” he said.

This combination of standards, verification and incentives is helping to attract issuers. “We now have a common language in terms of what qualifies as green, a global verifier, and incentives from the exchanges, so it can be cheaper than issuing plain vanilla bonds,” Gizhduaniyev said.

Interest is expected to grow further. “We are working with Kyrgyzstan, Uzbekistan, Azerbaijan and Tajikistan, and we see big potential from financial companies,” he said. “A lot of banks are planning to issue green bonds. They are developing their frameworks and approaching us for consulting on how to streamline the process.”

However, issuance volumes have recently declined. “In 2024 we saw the biggest amount of green bonds issued in Central Asia, but in 2025 it decreased by approximately 25%,” he said. The drop was linked to policy changes. “In 2024, Kazakhstan had a subsidy scheme for green bonds, where SMEs could use government support for coupon payments, making issuance very cheap. That has now changed.”

Despite this, the market remains in its early stages. “This market is small right now, but we are trying to develop it. It is only five years old,” he said.

Proceeds from green and sustainable bonds are being directed into several key sectors. “These bonds are financing renewable energy projects in Kazakhstan, climate adaptation, energy efficiency and waste management projects,” Gizhduaniyev said.

Waste management is emerging as a priority area. “This is a very big problem not only in Kazakhstan but in all of Central Asia,” he said. “We are working with a lot of companies, mostly Chinese companies because they have the technology.”

The GFC currently has a pipeline of projects under development. “We have five projects in the pipeline. We have signed agreements with these companies and are trying to issue green bonds,” Gizhduaniyev said. “We are now in the process of providing second-party opinions for these companies.”