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As Pacific island economies face the mounting realities of climate change, leaders are reimagining how financial systems can drive climate resilience and sustainable growth.

In a recent keynote address, the Governor of the Bank of Papua New Guinea highlighted how climate change has shifted from a distant risk to an urgent economic concern for the region. Papua New Guinea's frequent encounters with extreme weather underscore the need for robust, climate-smart financial strategies. The nation's response includes the establishment of a Green Finance Centre within its central bank, dedicated to steering the transition towards a climate-resilient financial system. By developing policies such as the Inclusive Green Finance Policy and establishing frameworks like the Green Taxonomy, Papua New Guinea ensures the credibility and consistency of green investments at the national level.

The central bank is actively collaborating with domestic and international partners to expand green lending, green deposits, and develop climate finance solutions. Initiatives underway include green refinancing and guarantee facilities, a prospective renewable energy fund, and thematic bond guidelines—all designed to mobilize private capital for sustainable projects. These efforts not only equip the country to manage climate risks but also serve as a blueprint for neighboring Pacific nations. Through regional platforms like the Pacific Islands Regional Initiative, Papua New Guinea is sharing its frameworks and fostering joint action among central banks across the Pacific, aiming to harmonize green finance standards and amplify the region’s voice in the global climate finance arena.

This collective approach marks a pivotal shift, positioning Pacific economies to lead on innovation and resilience while forging a sustainable economic future in the face of climate challenges.