The Bangladesh Securities and Exchange Commission (BSEC) promotes orange bonds to provide women entrepreneurs, especially those in rural areas, an easy financing solution, remove gender bias, and improve women's living standards, said its officials yesterday.

They were addressing a workshop organised by the regulatory body at its office in the capital on orange bonds.

Orange bonds are a cross-cutting asset class designed for investments in gender equity and climate action and offer a transformative, impact-driven solution to help realise the development priorities and harness the potential of the capital markets.

Potential sectors for orange bonds are readymade garments (RMG), women-led SMEs, agriculture and agri-business, green infrastructure and renewable energy, education, and health.

So, state-owned enterprises can issue the bond to finance green or gender-focused projects, while banks and NGOs also can raise funds for green and gender-focused loans or funds.

The RMG companies can issue the bond to improve women's working conditions, such as by providing daycare, medical care, and green buildings. Universities also can raise funds for use in gender-responsive education and green campus initiatives.

Though women are making a huge contribution to the economy, only 6 percent are included in financial programmes, and orange bonds can play a vital role in improving women's status, said Khondoker Rashed Maqsood, chairman of the BSEC.

"Orange bond is an instrument for change," he said while giving the opening remarks as chief guest, adding that through this bond, women from rural to urban areas would get access to finance and training.

The cost of capital is getting higher globally while the volume of grants is going to reduce soon as Bangladesh is going to graduate from the least developed country status, said AKM Sohel, additional secretary to the Economic Relations Division.

So, an orange bond, a social bond, is needed for Bangladesh. The capital market could be a source of financing. However, the equity market has not yet been able to create enough credibility and trust, he said.

Mohammad Rezaul Karim, executive director of the BSEC, in a presentation, said orange bonds were innovative debt instruments designed to finance and empower women and promote climate resilience.

The expected outcomes of orange bonds in Bangladesh are—being able to attract global capital, enable financial reforms, promote inclusive growth and stability, and develop the bond market, he said.

The BSEC is trying to develop a sustainable bond market in Bangladesh, for which it is maintaining minimum issuance and consent fees for green, blue, and sustainable bonds, he said.

It has been continuously trying to enable tax reductions and other incentives for these bonds, added Karim.

To develop the ecosystem for issuance of thematic bonds, a memorandum of understanding (MoU) was signed between the BSEC and the United Nations Development Programme, he said.

Under the MoU, the UNDP will design impact measurement and reporting frameworks based on SDG impact standards and develop impact reporting for the bonds, he said.

Bangladesh does not have a dedicated regulatory framework specifically for orange bonds, but issuing them would fall under the broader sustainable finance and bond issuance regulations of the country, said Karim.

Issuance of such a bond requires approvals from the BSEC, a no-objection certificate from the primary regulatory body, credit rating from a recognised agency, and appointment of an issue manager, trustee, and other intermediaries, if needed, he said.

The issuer should give a clear disclosure in its prospectus on the use of proceeds, reporting, and impact assessment, he said.

Farzana Lalarukh, a BSEC commissioner, chaired the event.