Brac Bank gets $100m green finance facility from Jica, Citi NA
Brac Bank on Thursday signed an agreement with Japan International Cooperation Agency (Jica) and Citibank NA for a long-term loan facility totalling $100 million.
Jica and Citi NA are providing $90 million and $10 million, respectively, for eight years and two years.
"This agreement represents Jica's first private sector financing to any financial institution in Bangladesh, and it represents a significant milestone in our journey toward achieving sustainable development goals," said Selim RF Hussain, managing director and chief executive officer (CEO) of Brac Bank.
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Brac Bank Ltd is at the forefront of partnering with development financial institutions to channel foreign financing towards sustainable causes, he added.
According to Brac Bank officials, the proceeds of the Jica facilities shall be used to support the bank for onward lending in green finance segments under the Sustainable Finance Policy for Banks and Financial Institutions, with particular focus on renewable energy, energy and resource efficiency, and efficient waste management. The Citibank NA facility can be extended to any segment in accordance with country regulations.
During this challenging global market scenario, this substantial forex support from Jica and Citibank NA will help Brac Bank manage its overall forex position while mobilising finance for sustainable development avenues in the fields of green financing, the officials added.
Japan has financed several megaprojects, including the metro rail system in Bangladesh. The Japanese government wants to achieve zero carbon emissions by 2050. This type of green finance will help reduce carbon emissions under sustainable finance, Japanese Ambassador in Dhaka Iwama Kiminori said at the programme.
He also expressed optimism that Japan will stand by Bangladesh in achieving its development goals.
Ahsan H Mansur, chairman of the board of directors at Brac Bank, said, "This agreement is the beginning of a long process. Even if we are not one of the most polluting countries, we still have to continue our carbon emission practices. We hope Japan will continue this type of financing contribution in the future."
Mikio Hataeda, vice-president of Jica, said the energy consumption in Bangladesh has been increasing enormously as the economy grows fast. To catch up with the energy demand, the government of Bangladesh has adopted a new policy for green finance to encourage, among other things, renewable energy and energy efficiency.
"Also, it is important to expand liquid waste management in particular to cope with rapid urbanisation in the country. It is a great honour for Jica to be of any assistance in tackling these issues through loan assistance to Brac Bank, which is strongly committed to scaling up its green finance," he added.
Brac Bank Managing Director Selim RF Hussain said that the bank's board, especially its founding chairman Sir Fazle Hasan Abed, envisioned bringing the unbanked "missing middle" under its inclusive banking strategy, which is the key to the lender's success.
"Brac Bank is committed to providing long-term financing to green financing projects with the ultimate view of contributing to the 3Ps and ultimately enabling us to reach our SDGs," he added.
Moinul Huq, Citi country officer and head of treasury and trade solutions at Citibank NA, said, "Our relationship with Brac Bank is almost two decades old. This type of financing will help us reduce carbon emissions by reducing the use of fossil fuels."
Founded in 2001, Brac Bank prioritizes mobilizing finance towards sustainable development and excels in value-based banking to ensure environmental conservation and social protection while promoting practical solutions for green economic growth. According to
Brac Bank officials, the $100 million green finance facility is a landmark long-term agreement between Brac Bank and JICA and Citibank NA.
Brac Bank is the largest collateral-free SME financier in Bangladesh. With 200 branches, 456 SME unit offices, 1,000 agent banking outlets, and 8,369 employees throughout the country, the bank caters to around 1.3 million customers, many of whom are women living in rural areas, the officials added.
