Central Bank of Bangladesh launches US$200m Green Transformation Fund & prepares green bond issuance – and states “these are only first small steps” of their green transition

This week, Bangladesh Bank announced a US$200 million ‘Green Transformation Fund’. Initially, the fund will focus its support on green transition of manufacturing practices in the export-oriented textiles and leather sectors. Over time the fund expects to extend to other sectors as well. Excellent stuff!

Bangladesh Bank is already a green finance – and green bond - pioneer

The Bank has been offering cheaper refinancing rates to green projects since 2009. There are now 50 different types of green projects that qualify for the green refinancing rate. The green refinancing program provides 2 billion Taka (US$25 million) of concessional credit to commercial banks who lend to green.

In October 2015, the Bank also announced they will invest some of their foreign exchange in green bonds. In this week’s speech launching the new green fund, the governor of Bangladesh Bank, Dr. Atiur Rahman, mentioned that the central bank is looking into issuing a green bond as well. Fantastic!

Central banks: important players in scaling green bond markets

The range of green measures taken by Bangladesh Bank illustrates clearly that central banks can play an important leading role in green finance and in scaling green bond markets, setting an excellent example for other countries to follow. Check out our green bond policy guide for a more detailed green bond action plan for central banks.

The first step of the green transition for Bangladesh

We’re happy to see that the governor recognises that the launch of the new green fund and potential green bond issuance are only the beginning of the green journey for Bangladesh. In his speech Rahman stated that “these are only small initial steps” in the country’s transition to green. We look forward to Dr. Atiur and his pioneering central bank to show us its next steps in the transition. Bravo, Bangladesh!