Bangladesh Bank has raised the lending target for green and sustainable ventures, requiring banks to allocate 40% of their net outstanding loans to these areas in the private sector by 2025. Of this, 5% must specifically fund green initiatives. The decision comes as banks have surpassed previous targets, with sustainable finance now exceeding 30% of total loan disbursements in the first half of 2024, according to Chowdhury Liakat Ali, director of the central bank’s Sustainable Finance Department.
The revised directive aims to support Bangladesh’s goals of reducing greenhouse gas emissions and achieving the UN’s Sustainable Development Goals (SDGs) by 2030. Previously, banks were mandated to direct 20% of their total loans to eco-friendly projects. This shift reflects the country’s commitment to meeting SDGs and the Nationally Determined Contributions (NDC) under climate agreements, encouraging increased financial support for sustainable and environmentally responsible projects.
Comment here