Bangladesh Bank has allocated a Tk1,000 crore refinancing fund with loans available at a maximum 5 per cent interest rate to support environmentally sustainable projects in rural and local industries.
Under a circular issued on Monday, the central bank stated that the revolving fund, carved out from the existing Green Transformation Fund (GTF), would help rural and local industrial units purchase both conventional and environmentally friendly machinery and equipment aimed at enhancing sustainability and green production capacity.
The move is part of the central bank’s strategy to extend green financing beyond export-oriented industries and large manufacturing units to smaller rural and local enterprises.
Officials noted that the refinancing support would cover projects related to renewable energy, energy efficiency, water conservation, waste management, recycling, resource efficiency, and improvements to workplace environments.
The refinancing facility will be available for two to five years, depending on the project type.
Under the scheme, Bangladesh Bank will provide funds to participating banks at an interest rate of 1 per cent, while the maximum lending rate to customers has been capped at 5 per cent.
Central bank officials said the subsidised financing structure could make green investments more affordable for small and medium-sized rural industries, which often struggle to access long-term, low-cost funds for sustainable transformation.
According to the policy, no single borrower will be allowed to receive more than Tk5 crore under the facility, while bank financing may cover up to 80 per cent of machinery import or procurement costs.
Additionally, the central bank has made renewable energy usage mandatory for borrowers under the scheme. At least 10 per cent of the total electricity consumed by the financed project must come from renewable energy sources.
The circular stated that all state-owned banks would be eligible to participate in the scheme. However, private and foreign banks must maintain classified loans below 20 per cent to qualify for refinancing support.
The facility has been created from the existing Tk5,000 crore Green Transformation Fund, originally introduced to promote sustainable growth in export-oriented and manufacturing industries.
