Bangladesh Bank introduces 200m Euro fund for green initiatives

Bangladesh Bank has added 200 million Euros to the existing $200-million Green Transformation Fund for the refinancing of environmentally-friendly projects.

From the new fund, all manufacturing industries will be able to avail loans in Euros, too – through authorised dealer banks – at less than two per cent interest, to import environment-friendly and energy-efficient capital machinery and accessories.

However, authorised dealer banks can borrow money from this fund – at a one per cent interest rate – to further finance the manufacturers, according to a central bank circular published yesterday.

Khondkar Morshed Millat, general manager of Bangladesh Bank's Sustainable Finance Department – that manages the fund – said, "The newly-introduced Euro fund will provide financing on a long-term basis of five to 10 years."

"It will be provided to all kinds of manufacturing industrial enterprises to import green capital machinery and accessories – including solar energy and renewable energy under the power sector."

"With this loan in Euros, manufacturers can import industrial raw materials to use in all manufacturing enterprises including export-oriented ones and deem exporters," he added.

The central bank's Green Transformation Fund – a $200-million refinancing scheme for environmentally-friendly initiatives launched in 2016 – expanded its scope in June 2019. From just three sectors – textiles, leather, jute – it now includes all manufacturing and export-oriented entities.

The Green Transformation Fund facilitates access to finance to import capital machinery and accessories for green initiatives such as: water use efficiency in wet processing, water conservation and management, waste management, resource efficiency and recycling, renewable energy, energy efficiency, heat and temperature management, air ventilation and circulation efficiency, plus work environment improvement initiatives.