BII backs Pubali Bank in first climate finance investment in Bangladesh

 BII backs Pubali Bank in first climate finance investment in Bangladesh

British International Investment (BII), the UK’s development finance institution and impact investor, has made a new investment in Bangladesh after reviving limited partner-style bets in the country last year.

BII, which was previously known as CDC Group Plc, has sanctioned a $50 million loan to Pubali Bank, a universal bank in Bangladesh, to increase climate-related lending and boost climate mitigation projects across the country.

“Climate change has resulted in an economic shock in Bangladesh where we’re seeing reduced agricultural yields, damaged infrastructure and increased commodity cost,” said Mohammad Ali, MD and CEO, Pubali Bank. “Our partnership with BII will enable us to grow our climate finance offering and support a wider range of clients who are preserving the environment and strengthening the economy.”

Bangladesh has made significant economic progress over the last decade. However, it remains vulnerable to the adverse effect of climate change and has a rising demand for sustainable energy. Addressing these challenges requires directing climate finance to boost sustainability within critical economic sectors, including the renewable energy sector, manufacturing and the ready-made garments (RMG) industry which is transitioning to more resource-efficient production processes and factories.

This loan marks BII’s first climate finance investment in Bangladesh. BII’s climate change strategy outlines its pledge to ensure that 30% of its total commitment will be in climate finance, which will be deployed to accelerate climate action in markets that are at higher risk to the effect of climate change. BII’s capital will also help contribute toward Bangladesh’s 2030 carbon emission reduction target set at COP26.

BII said the green loan will primarily be used for projects in the renewable energy, green buildings, textile and manufacturing sectors. The credit facility will enable Pubali to extend climate finance loans to its portfolio of corporate clients in such sectors, enabling them to purchase key equipment required in climate projects and implement climate-related technological solutions in Bangladesh.

Vivek Sinha

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