Bangladesh given $256.5m from Green Climate Fund

In the first ever concessional credit line and the first private sector financing from the global Green Climate Fund (GCF) in the country, Bangladesh on Saturday received $256.5 million.

The fund was approved at the board meeting of the GCF on November 13, reads a press release by the Infrastructure Development Company Ltd (IDCOL).

GCF is a fund established within the framework of the United Nations Framework Convention on Climate Change as an operating entity of the financial mechanism to assist developing countries in adaptation and mitigation practices to counter climate change.

IDCOL, as the direct access entity of the GCF, received the approval of the funding proposal for the programme titled “Promoting Private Sector Investment Through Large Scale Adoption of Energy-Saving Technologies and Equipment for Textile and Readymade Garment Sectors of Bangladesh.”

It is the largest approved funding proposal for any direct access entity of the GCF accredited globally, the press release adds.

Under the programme, IDCOL will get a $250 million concessional loan for a tenure of 20 years with a grace period of five years for financing energy-efficient equipment.

Another $6.5 million will come as technical assistance to develop an enabling environment by covering areas such as capacity building, awareness, support in loan disbursal and monitoring and evaluation of the programme parameters.

Of the $250 million, $100 million will be used to finance textile sector energy efficiency projects, while the remaining $150 million will be channelled to four local financial institutions for financing energy efficiency projects in the apparel sector.

The total programme size will be $423.50 million, including co-financing from IDCOL, local financiers and the project sponsors.