Bangladesh Bank Initiatives for Promoting Investments in Green Projects
Bangladesh Bank has four direct refinancing schemes for promoting investments in green
projects (Figure 1). These are: (i) BDT 4 billion equivalent refinance scheme for investing in
environment-friendly products or initiatives, (ii) BDT 1.5 billion equivalent refinance scheme for
Islamic banks and FIs for investment in green products or initiatives, (iii) green technology fund (GTF)
worth USD 200 million to import green machineries and 200 million EURO to import green
machineries as well as industrial raw materials, and (vi) BDT 10 billion worth technology development
or upgradation Fund (TDF) for 32 industrial sectors mentioned in Bangladesh Export Policy 2018–21
(Bangladesh Bank, 2022).
In addition to the above-mentioned refinancing schemes, Bangladesh Bank has set following targets for
other banks or FIs to accelerate the scale of financing for green investment projects. These targets are
non-binding in nature. However, under ESRM Guideline 2017, banks and FIs receive certain benefits
or incentives for meeting these targets (Bangladesh Bank, 2017).
- According to Bangladesh Bank’s GBCSRD (the Green Banking and CSR Department) Circular
No. 04/2014, from January 2016 onwards, the minimum target of direct green finance was set
at 5 per cent of the total funded loan disbursement or investment for all banks and FIs.
- In 2015, through GBCSRD Circular No. 04/2015, banks and FIs were instructed to form a
‘Climate Risk Fund’ having allocation at least 10 per cent of their corporate social responsibility
(CSR) budget.
Later, from September 2020 onwards the minimum target of green finance was set at 5 per cent of the
total funded term loan disbursement/investment for all banks and FIs (Bangladesh Bank’s Sustainable
Finance Department (SFD) Circular Letter No. 05/2020).
Sustainable Finance
Refinance Scheme for Environment Friendly Products/Projects/Initiatives
Sustainable Finance Policy
Green Transformation Fund
Green Transformation Fund
Environment Friendly Brick Manufacturing:
IIDFC was one of the pioneers of introducing environment friendly Hybrid Hoffman Kiln (HHK) technology in the brick making industry of the country. IIDFC’s Clean Development Mechanism (CDM) project helped to establish the first HHK of the country in collaboration with UNDP & the World Bank. We alone have 09 energy efficient HHK units under our CDM project umbrella, which are saving 30,000-32,000 tons of Green House Gas (GHG) annually. With a vision to promote green technologies, IIDFC always encourages projects like Tunnel Kilns, HHKs and Non-fired Block Bricks i.e. Autoclave (AAC), Concrete Blocks etc.
To facilitate the clients with a greener vision, we have expertise in arranging Bangladesh Bank refinance scheme, ADB’s fund for Energy Efficient Brick kilns and collaboration with various development agencies.
Industrial Energy Efficiency Improvement:
Being the first local stakeholder, IIDFC set its footprint in Industrial Energy Efficiency Improvement Financing several years back. By an agreement with the Asian Development Bank (ADB), IIDFC provided technical assistance to conduct energy audits in 120 industries under six different sectors i.e. Steel, Cement, Textile/RMG, Sugar, Paper etc. We also had a Term Loan facility of 06 million US dollar from ADB for financing such projects.
IIDFC has its fully equipped team for providing One Stop solution in Industrial Energy Efficiency Improvement Financing. Starting from Energy Audit arranging, Walk-through Energy Audit, report preparing and applying for financing we have all solutions for you under one roof. The experience of working closely with ADB, USAID etc in this particular project keeps us one step ahead in arranging low cost fund.
Manufacturing of Energy Efficient products like LED Bulb/Tube lights including assembling plants and assembly plants for Solar PV cell/array are also promoted by us.
Green Industry:
Sustainable Development involves a wholesome approach to the overall operations of a project. This starts from designing the project to construction to obtaining United States Green Building Council’s (USGBC) LEED certification. IIDFC provides package solution in this area for the whole process. Special refinance fund from the Bangladesh Bank is arranged for the eligible projects.
Waste Management:
Being one of the most densely population, Bangladesh’s nature & environment is badly affected by the waste materials generated by Industrial processes. These wastes are polluting the soil and water bodies thus risking wildlife. To reduce the harmful effects of industrialization IIDFC promotes small to large scale waste management projects i.e. Effluent Treatment Plant (ETP), Water Treatment Plant (WTP) and Solid Waste Management processes. Financing is done at a much cheaper rate using Bangladesh Bank’s re-finance scheme.
Recycling Industry:
With a strong footprint in the Paper & Plastic industry IIDFC extends its scopes for financing Recycling plants in these sectors. We arrange re-finance facility through Bangladesh Bank to encourage recycling practices and save the nature.
List of Environment Friendly Products/Projects/Initiatives
Part-1: Renewable Energy
- Solar Home System
- Solar Pico Grid
- Solar Micro Grid
- Solar Park
- Solar Irrigation Pumping System
- Solar Photovoltaic (PV) Assembly/ Manufacturing Plant
- Solar Water Heater Assembly/Manufacturing Plant
- Solar Nano Grid
- Solar Mini Grid
- Net Metering Rooftop Solar System
- (Solar Pump for Drinking Water)
- Solar Cooker Assembly/ Manufacturing Plant
- Solar Air Heater & Cooling System Assembly/Manufacturing Plant
- Solar Powered Cold Storage
Establishment of Biogas Plant using following raw materials:
(i) Agricultural residues*,
(ii) Community based wastes**,
(iii) Industrial wastes*** (15-18)
- Small size biogas plant: 1.2, 1.6, 2.0, 2.4, 3.2 and 4.8 cubic meter gas production per day.
- Medium size biogas plant: capacity varies from 6 to 25 cubic meter gas productions per day.
- Large size biogas having capacity 26 cubic meter gas production to 200 cubic meter gas production per day and above.
- (Integrated Cow Rearing and Setting up of Bio-gas Plant)|
- (Wind Power Plant)
- (Hydro Power Plant)
Part-2: Energy & Resource Efficiency
- Installation of Energy Auditor Certified machineries including boiler in industries for following purposes:
i. Energy Efficiency
ii. Resource Efficiency
iii. Heat and temperature management
iv. Air ventilation and circulation efficiency
v. Waste Heat Recovery System/Unit
- Auto sensor power switch assembly Plant
- Energy efficient Cook Stove Assembly Plant
- LED Bulb/Tube Manufacturing/ Assembly Plant
- Energy Efficient Lime Kiln
- Improved Rice Parboiling System
Part-3: Alternative Energy
- Pyrolysis Oil/Bio-crude Oil/Bio Fuel Manufacturing Plant
- Lithium Battery Manufacturing Plant
Part-4-5: Liquid & Solid Waste Management
Installation of Effluent Treatment Plant (ETP)
- Biological ETP
- Combination of Biological and Chemical ETP
- Conversion of Chemical ETP into Combination of Biological and Chemical ETP
- Central ETP
- Waste Water Treatment Plant)
- (Sewage Water Treatment Plant)
- Methane Recovery and Power Production from Municipal Waste Plant
- Compost Production from Municipal Waste Plant
- Hazardous Waste Management Unit/Plant
- Medical Waste Management Unit/Plant
- E-waste Management Unit/Plant
- Sludge Management Unit/Plant
Part-6: Recycling and Manufacturing of Recyclable Goods
- PET Bottle Recycling Plant
- Plastic Waste (PVC, PP, LDPE, HDPE,PS) Recycling Plant
- Paper Recycling Plant
- Recyclable Bag Manufacturing Plant
- Recyclable Poly Propylene Thread and Bag Manufacturing Plant
- Battery (Solar/Led Acid/Lithium Ion) Recycling Plant
Part-7: Environment Friendly Brick Production
- Compressed Block-Brick
- Foam Concrete Brick
- Other Environment Friendly Brick Kiln Project (HHK, Tunnel Kiln, and other eco-friendly bricks)
Part-8: Green/Environment Friendly Establishments
- Establishment of Certified Green Industry
- Establishment of Certified Green Building
- Establishment/Installation 'Green Featuring' in the Buildings/Industries
- Affordable Green Housing
Part-9: Green Agriculture
- Forestation (Social/integrated/Agro)
- Organic Farming
- (Rooftop Agriculture/Vertical Farming or Gardening)
- Fish cultivation in cage
- Biofloc fish cultivation
- (Integrated Recycling System (IRS) fish cultivation/Bottom clean fish cultivation)
- Financing in coastal aquaculture
- (Floating system cultivation, Hydroponic cultivation/farming)
Part-10: Green CMSME
- Financing in cottage Industry
Part-11: Socially Responsible Finance (SRF)
- Community Investment for addressing Climate Resilience and Disaster Management in a concessional rate
- Financing in Green/Clean transportation projects (cycles, green vehicles those run on wind, solar energy, electricity, bio-fuels etc.)
- Financing in Sand-witch Panel (Floating or Movable Houses in coastal areas or climate vulnerable zone)
- Financing in Govt. approved Eco-tourism project
Part-12: Miscellaneous
- Safety and work environment of factory related projects
(Production of Vermicompost
- Production of Vermicompost
- Production organic fertilizer from slurry
- Jute Products Manufacturing Industry