Circular No. 02 dated 30 August 2023 issued by the Sustainable Finance Department of the Bangladesh Bank on “Refinancing Scheme for Environmentally-Friendly Products, Projects, and Initiatives”

Aiming to increase environmentally-friendly initiatives, the Bangladesh Bank has announced a refinancing scheme formed for eco-friendly products, projects, and initiatives.

With funding of BDT 4,00,00,00,000 , affordable loans will now be available for pre-certified green industries, green buildings, and buildings featuring green initiatives. Customers must have first obtained final certification before being eligible to apply for such a loan. The Bangladesh Bank will charge banks 1% interest for use of the funding with customers paying 5% interest on all term loans (except for those designated as a government priority sector).

Government priority sectors, such as solar irrigation pump products for the agricultural sector, will bear interest of a maximum of 3%. Customers will get BDT70 for an investment of BDT100.

The loan period for products will be from 3-10 years, with affordable green housing loans available for 20 years at 5% interest.

State-owned banks will be able to give loans under the refinancing scheme without any conditions. However, for commercial banks to participate, their non-performing loans must be below 10%.

The circular specifies 70 eco-friendly products, projects, or initiatives for which loans are available.