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Albania's financial system is not prepared for the green economy

2024-12-04 14:11:00, Kosova & Bota CNA

Albania's EU membership path requires the adaptation of the development model to the green economy, which means that the country must develop a financial system in accordance with environmental protection.

But the Regional Cooperation Council, which is monitoring these developments in the Region, points out that Albania is still far away.

The criteria require Albania to match the fiscal and financial policy with the green economy. Banks should lend to sustainable projects in line with the impact on the environment and taxes and levies should consider the green economy.

The Regional Cooperation Council points out that currently in Albania there is no uniform system for classifying business activities based on their impact on the environment. Therefore, it is essential that governments work to develop a green taxonomy.

The lack of climate data in turn hinders the ability of policymakers to assess climate risk accurately. BSH aims to support the development of the necessary data infrastructure for measuring climate risks, but Albania is in the early stages of classifying green and sustainable activities.

Larger banks with EU-based parent companies are more advanced in integrating these principles, while smaller and local microfinance institutions lack the capacity.

The Bank of Albania is using a system to classify economic activities that are relevant to climate policy. These activities may be affected by changes in climate policies. The aim is to create a unified classification system according to EU practices, including the development of taxonomy regulations for green activities.

The Regional Cooperation Council notes that some of the identified challenges faced by stakeholders in Albania in adopting the EU Taxonomy include the general lack of technical expertise and resources needed to implement the detailed requirements of the taxonomy EU.

Albania has limited data availability and insufficient technical expertise and resources.

The green finance strategy aims to incorporate the EU's sustainable finance directives.

Albania's focus will be on building institutional capacity and raising awareness among stakeholders to facilitate the seamless integration of sustainability principles across all sectors.

In order to effectively integrate climate change efforts, the Bank of Albania plans to create internal networks, centers, local forums of experts, dedicated units within its organizational structure./ Monitor Magazine