Signing Ceremony – Project Document Green Banking for Inclusive Growth and Sustainable Development
The signing ceremony of the new joint Agriculture Bank of Iran (Bank Keshavarzi) and UNDP project took place today at the Banks headquarters in Tehran.
The near $1 million project initiative was signed off by the Bank’s Chair and Managing Director, Dr. Mohammad Talebi, and the UNDP Resident Representative in Iran, Mr. Gary Lewis.
The purpose of the Green Banking project (duration 2013 – 2016) is to contribute to the Government of Iran and UNDP agreement to support national capacities that contribute to inclusive growth and sustainable development outcomes.
Within its capacity development framework, UNDP will support the Bank, which is Iran’s national development bank specialising in natural resources and agriculture development financing and funding. Established 80 years ago, the Bank handles savings and loans as well as public fiscal funding that is earmarked or targeted to various groups or for various development purposes.
As Iran faces challenges in sustainable economic growth and the Government’s 5th Five Year Development Plan (2011-2015) intends to achieve “growth with justice”, the new project will contribute to economic development and resource allocation targeting as well as to institutional capacity for development banking and finance.
Importantly, it will improve the lives of the poor and help sustain their natural resources base. Given that the agricultural sector in Iran has about 15% of GDP, and the Bank provides over 60% of the sector’s loan financing (in 2011 equivalent to $12 billion), and also given that out of the nearly 1.7 million persons that receive loans yearly from the Bank, about 70% receive loans of less than $5,000, the Bank may be considered a pro-low income and pro-poor type of funding institution.
The joint Bank and UNDP project will, therefore, support the institutions objective to improve its “green” banking and credit procedures and practices - those that can help ensure both inclusive growth and sustainable development outcomes in the sector and at the local level. It will also help in further integrating “development” and “banking” together for the benefit of low income Iranian rural people.
The project is a research and development oriented type of approach to institutional capacity strengthening, and will transform the Banks’ practices towards inclusive growth and sustainable development outcomes. It will initially help assess the Standard Operating Procedures of the Bank (from an inclusive growth and sustainable development perspective); help revise and improve the SoP’s as necessary; and then undertake piloting to test the new SoP’s in the three provinces of Markazi, North Khorassan and Zandjan for national level institutionalisation. The project also intends to establish a Centre of Excellence for the Bank on this approach and to disseminate the best practices nationally and regionally.
Once the project is undertaken, the Bank’s loan portfolio may be transformed from a sole technical, financial and efficiency focus to one that is also choosing and selecting investments and techniques for combined efficiency, equity and sustainability.
The project will be under the responsibility and implementation management of the Bank, and funded through both the Bank and UNDP resources – over a three year period.
Click here to read Agriculture bank's coverage of the signing ceremony in Farsi.