Plan on cards to introduce $1 billion orange bonds in Bangladesh

The Economic Relations Division (ERD) in partnership with the United Nations Development Programme (UNDP) and the Impact Investment Exchange (IIX) have discussed introducing orange bonds worth $1 billion in Bangladesh to drive gender equity, climate action, and economic growth.

They discussed the issue at an event today titled "Rebuilding an Inclusive Bangladesh with Orange Bonds", which is a part of UNDP's Governance of Climate Change Finance (GCCF) programme and supported by the Swedish government.

Orange bonds are a cross-cutting asset class designed to invest 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.

Orange bonds offer Bangladesh a pathway to a resilient and inclusive future aligning with the government's vision for 'Bangladesh 2.0', Finance and Commerce Adviser Salehuddin Ahmed said the event.

"By mobilising $1 billion across key sectors such as garments, green infrastructure, and agriculture, we are strengthening our financial ecosystem, paving the way for private sector investment to support sustainable development," he said at the consultation as the chief guest.

"Together, we can shape a model of growth that serves as an example of shared success," he added.

Shariar Kader Siddiki, secretary of the External Resources Division, underscored the importance of policy readiness for the initiative.

Stefan Liller, the UNDP resident representative in Bangladesh, highlighted the importance of securing substantial financing from diverse sources to support Bangladesh's ongoing development journey.

He emphasised that private sector engagement, along with climate finance mechanisms such as climate risk insurance, Islamic finance, thematic bonds, blended finance, and carbon trading, are essential components in driving sustainable growth.

"This consultation marks a critical step in preparing Bangladesh's financial landscape for Orange Bonds. We are committed to ensuring this initiative is backed by strong policy reforms, stakeholder engagement, and a robust market framework," he added.

The introduction of Orange Bonds represents a significant move toward innovative finance solutions to meet Bangladesh's climate and development goals, with support from both national and international stakeholders, he said.

Many climate investments not only address urgent challenges but also deliver strong economic returns and create valuable job opportunities, he added.

At the event, Prof Durreen Shahnaz, founder & CEO of IIX, outlined how the Orange Bond initiative seeks to attract diverse investment sources, including the Bangladeshi diaspora, development finance institutions (DFIs), and global capital markets.

She also said the Orange Bond is not just a financial vehicle, but also a powerful tool with a mission rooted in gender equality, climate action and inclusive growth.

"The work of Bangladesh Orange Bond initiative embodies the same spirit of sustainable and inclusive finance that we have been working on. So, we are very excited to share our encouragement for this and see it come to reality," said Lamiya Morshed, principal coordinator for sustainable development goals affairs at the chief adviser's office.

Md Khairuzzaman Mozumder, secretary of the Finance Division, and Maria Stridsman, head of development cooperation and deputy head of the mission of the embassy of Sweden, also talked at the event.