A coalition of development partners has unveiled an $8 billion fund dedicated to assisting Bangladesh in mitigating and adapting to the impacts of climate change. Leading this collaborative initiative is the International Monetary Fund (IMF).
“Bangladesh has been at the forefront of those warning about the elevated risks of climate change for vulnerable countries as well as stressing the importance of international collaboration to support those in need,” Kristalina Georgieva, managing director of the IMF, said in a statement on Sunday.
“Bangladesh is also making significant strides to bolster climate resilience, adaptation, preparedness, and conservation. We commend Bangladesh’s steadfast implementation of their climate agenda and their tireless efforts to promote global collective action to address climate change.”
The partners involved in the Bangladesh Climate and Development Platform (BCDP) are the Asian Development Bank (ADB), the World Bank, the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), the Asian Infrastructure Investment Bank (AIIB), Agence Française de Développement (AFD), the European Union and the European Investment Bank (EIB), as part of Team Europe, the Green Climate Fund (GCF), the government of South Korea, Japan International Cooperation Agency (Jica), and the United Kingdom.
This collaborative effort, the first of its kind in Asia, is contextualized within the $1.4 billion Resilience and Sustainability Facility (RSF) arrangement approved by the IMF in January, the $1 billion programmatic series of Green and Climate Resilient Development (GCRD) Policy Credits by the World Bank and the ADB's continuous funding for climate projects in Bangladesh.
The ADB is in the process of providing a $400 million policy-based loan to Bangladesh, with 53% of its 2023 project financing ($1.9 billion) already allocated to climate financing. The lender commits to dedicating over half of its 2024-26 allocation for Bangladesh ($5.5 billion) in support of the government's climate agenda.
The Korean government has pledged $50 million, while the AIIB is contemplating an additional $400 million in 2024 at the request of Dhaka. The UK, through its Taskforce on Access to Climate Finance, will enhance the coordination of bilateral climate finance, supporting the government in accessing diverse climate finance sources.
The GCF is actively backing numerous public and private sector projects, amounting to over $400 million, spanning sectors such as energy, agriculture, water management and resilient livelihood. Team Europe is committed to providing an EU-guaranteed EIB Loan of $381.5 million to support renewable energy projects in Bangladesh.
The Renewable Energy Facility is expected to mobilize up to $763 million in investments and to contribute to the installation of an estimated 750 MWp of new renewable energy capacity in Bangladesh
The EIB support will be accompanied by an EU Grant worth $49 million, including Technical Assistance ($6.5 million) and an Investment Grant ($42.5 million) provided under the EU Global Gateway strategy, as part of the Team Europe Initiative on the Green Energy Transition.
AFD is processing a $320 million climate policy-based loan program, aligned with and complementary to commitments from the IMF, World Bank and ADB. Jica will support the BCDP by aligning project pipelines with Bangladesh's climate change agenda through technical assistance, concessional loans and grants.
The UNDP will continue providing technical assistance to Bangladesh on strategic climate change-sensitive planning and budgeting management, strengthened climate public finance governance, and in more effective planning and budgeting for climate finance at the local level.
Bangladesh is currently receiving funding for nine private-sector climate projects with contributions of $441.2 million from the GCF, $135.5 million from other development partners, national implementing entities and private banks, says the statement.
