Government launches “Orange Bond” with UNDP and IIX to facilitate climate and inclusive action

Bangladesh's Economic Relations Division (ERD), in partnership with the United Nations Development Program (UNDP) and Impact Investment Exchange (IIX), organised a consultation at a hotel in Dhaka on November 07 to discuss introducing Orange Bonds in Bangladesh.

This innovative financing initiative aims to drive gender equity, climate action, and economic growth by mobilising up to $1 billion through sustainable bond issuances.

The consultation, "Rebuilding an Inclusive Bangladesh with Orange Bonds," is part of UNDP's Governance of Climate Change Finance (GCCF) programme, supported by the Swedish government.

Addressing the consultation as the chief guest, Dr Salehuddin Ahmed, Honourable Advisor to the Ministry of Finance, highlighted the significance of the initiative: "Orange Bonds offer Bangladesh a pathway to a resilient, inclusive future, aligning with our vision for 'Bangladesh 2.0.' By mobilising $1 billion across key sectors such as garments, green infrastructure, and agriculture, we are strengthening our financial ecosystem and paving the way for private sector investment to support sustainable development. Together, we can shape a model of growth that serves as an example of shared success."

Dr  Khairuzzaman Mozumder, Secretary of the Finance Division, Ministry of Finance, said "So far, our climate response has largely focused on mitigation. However, we must place equal emphasis on adaptation to address the full scope of climate challenges." He also highlighted the need to integrate climate considerations into the national budget thoroughly.

Shariar Kader Siddiki, Secretary of the External Resources Division, underlined the importance of policy readiness for the initiative: "This consultation marks a critical step in preparing Bangladesh's financial landscape for Orange Bonds. We are committed to ensuring this initiative is backed by strong policy reforms, stakeholder engagement, and a robust market framework."

Stefan Liller, UNDP Resident Representative, said, "Climate finance needs to focus on mitigation and adaptation, but is currently skewed towards mitigation, accounting for over 90% of funding. As COP29 approaches, a new climate finance goal is anticipated. Given Bangladesh's development journey, securing substantial financing from diverse sources is crucial, including private sector engagement in climate finance and mechanisms like climate risk insurance, Islamic finance, thematic bonds, blended finance, and carbon trading. Many climate investments address urgent challenges, deliver strong economic returns, and create valuable job opportunities".

During the event, Prof. Durreen Shahnaz, Founder & CEO of IIX, presented a keynote on "Rebuilding an Inclusive Bangladesh: Orange Bonds," outlining how the Orange Bonds initiative seeks to attract diverse investment sources, including the Bangladeshi diaspora, development finance institutions (DFIs), and global capital markets. Maria Stridsman, Head of Development Cooperation and Deputy Head of Mission, Sida, spoke on "Climate and Gender: Intersection and Interventions," while Lamiya Morshed, Principal Coordinator for Sustainable Development Goals (SDGs) at the Chief Adviser's Office, presented insights on " International Cooperation and Partnerships for Capital Market Development."

Lamiya Morshed, Principal Coordinator for Sustainable Development Goals (SDGs) affairs in the Chief Adviser's Office, highlighted the initiative's global significance: "The work of the Bangladesh Orange Bond initiative embodies the same spirit of sustainable and inclusive finance that we have been working on—so we are very excited to share our encouragement for this and see it come to reality.

Professor Durreen Shahnaz, Founder and CEO of Impact Investment Exchange (IIX), further emphasised the strategic nature of this initiative: "The Orange Bond – is not just a financial vehicle; it is a powerful tool with a mission rooted in gender equality, climate action, and inclusive growth."

The consultation gathered key representatives from the government, international development partners, and the private sector to explore Orange Bonds' transformative potential for inclusive development. It underscores Bangladesh's commitment to leveraging innovative financing solutions, such as Orange Bonds, to advance national priorities of gender equality, climate resilience, and economic sustainability, strengthening its path towards inclusive growth.