Green investment on the rise

Investment in green initiatives has seen a significant rise in the past few years as the country's banks and financial institutions (FIs) have disbursed substantial low-cost loan to support eco-friendly industries, businesses and other projects.

Banks and FIs have also adopted green practices in their day to day business and long-term operations.  According to Bangladesh Bank (BB), 43 out of 56 banks and 16 out of 33 FIs in the past five years disbursed over Taka 1 lakh 90 thousand crore to help develop eco-friendly initiatives in the country covering power, garment and some major manufacturing sectors.

"Bangladesh Bank (BB) issued a policy guideline for Green Banking in February, 2011. Under the guideline, all operating banks and FIs have introduced environment-friendly banking activities in the country," BB chief spokesperson Subhankar Saha told, reports BSS.

All the 56 banks and 32 FIs have also developed their own green banking policy and green office guides. Some banks opened around 500 solar powered branches, 249 ATMs and SME units in different parts of the country. The banks and FIs are now providing regular training to their staff on green banking. BB data shows that 56 banks and 8 FIs arranged 236 training programs for over 3700 staff in the first three months of this year. 

All the banks and FIs are now regularly submit a quarterly report to the central bank on their performance in promoting green banking.  As per the central bank's instruction, banks and FIs have formed a "Climate Risk Fund" with allocating 10.0 percent of their Corporate Social Responsibility (CSR) budget for this Fund.

With support from BB's Taka 200-crore refinancing scheme, the banks and FIs are disbursing easy loans to promote different green products like solar energy system, bio-gas plant and effluent treatment plant (ETP).  BB has increase the green product line to 51 under eight categories, including renewable energy, energy efficiency, alternative energy, waste management, recycling and recyclable product, environment friendly brick-kiln, environment friendly installation and miscellaneous. 

The central bank so far released a total of $16.21 million (around Taka 146 crore) to five participatory banks and FIs against their financing to various projects under these eight sub sectors. It established a lending scheme namely "Financing Brick Kiln Efficiency Improvement Project", supported by Asian Development Bank (ADB) to help reduce greenhouse gas emissions and refine particulate pollution from brick fields.

BB intended to provide long term financing for private sector firms, mainly midsized manufacturing firms under the Financial Sector Support Project (FSSP) financed by the International Development Association (IDA).  "For the project, BB has so far received 73 project proposals involving $435 million (over Taka 3500 crore) from export-oriented companies while the central bank approved 27 proposals with $109.77 million (around Taka 885 crore), of which $50.79 million (Taka 881 crore) for 18 project proposals were disbursed," a senior BB official said. 

BB in January 2016 opened a new long-term refinancing window named Green Transformation Fund (GTF) of $200 million (over Taka 1600 crore) to ensure sustainable growth of eco-friendly export oriented textile and leather sectors.