We have signed Performance Based Payment Agreement with Joint Stock Commmercial Bank “Qishloq Qurilish Bank” . This pioneering modality is being implemented for the second year in a raw and it allows us  to provide technical assistance to Qishloq Qurilish Bank to expand on issuance of green mortgages as innovative financial instrument.

The Agreement has been signed within the framework of the project of the Ministry of Construction of Uzbekistan and UNDP/GEF “Market Transformation for Sustainable Rural Housing in Uzbekistan”. The objective of this Project is to provide Uzbekistan’s rural population with improved, affordable and environmentally friendly living conditions. The project seeks to transform the rapidly growing rural housing sector in Uzbekistan towards a more sustainable and low-carbon development pathway by designing, piloting and scaling-up a green mortgage market mechanism, which will boost the demand for low-carbon housing among the Uzbek rural population.

Issuance of green mortgages has been piloted by Qishloq Qurilish Bank in 2019 by utilizing the subsidy financing and technical assistance of UNDP/GEF. As a result, 800 rural households in 5 pilot regions (Samarkand, Bukhara, Surkhandarya, Ferghana, Khorezm regions) gained access to a specialized green mortgage bank product within the framework of the Project. It should be noted that over 53% of borrowers of green mortgages in 2019 were women.

During 2020, the issuance of green mortgages by Qishloq Qurilish Bank is planned in five more regions of Uzbekistan, including Kashkadarya, Namangan, Bukhara and Tashkent regions, as well as the Republic of Karakalpakstan. Within the framework of the State Rural Housing Programme, only the construction of four-storey residential buildings are envisaged in 2020. Accordingly, the green mortgages market mechanism will be implemented within the purchase of energy efficient (EE) and low-carbon (LC) apartments at multi-storey residential buildings.

“Green mortgage” is a bank product that allows homebuyers to purchase energy-efficient and low-carbon houses. The main benefit of such housing for the households is around 30% energy savings on electricity and heating and corresponding utility bills. Moreover, EE and LC houses provide environmentally friendly living conditions. This instrument will benefit the environment by reducing CO2 emission, considering that burning hydrocarbon fuel is not wasted for lighting and house heating needs. The share of housing sector in greenhouse gas emissions is one of the highest. Energy efficiency in residential construction is of paramount importance. Energy-efficient and low-carbon solutions in the housing sector provide access to affordable and clean energy, which meets the goal 7 of the Sustainable Development Goals (SDGs).