GREEN FINANCING: OPPORTUNITIES AND CHALLENGES FOR THE BANKING SECTOR IN THE REPUBLIC OF NORTH MACEDONIA

Abstract

The last decade can be said to be a historic turning point in the fight against climate changes. In the process of adapting to these changes, green financing appears as one of the possibilities for financing projects that are essential for the future of all of us. Green finance is a broad term that can refer to financial investments in sustainable development projects and initia tives, environmental products and policies that encourage the development of a sustainable economy. Potential investors in the process of green financing could be commercial banks, pension funds, insurance companies, which, apart from being driven by profit, would also be active participants in the green transition both in the world and in the Republic of North Macedonia. This is where the main aim of this paper comes from, to analyze the trends of green f inancing in the Republic of North Macedonia, the challenges which the bank ing sector experiences nowadays , as well as the sources of green financing available to it. The concluding observations from this research showed that in our country, apart from the voluntary approach to defining guidelines for green instruments, certain financial and regulatory incentives are also needed for the process of green transformation of the financial sector in the Republic of North Macedonia.