AIIB to provide budget support under climate finance

The Asian Infrastructure Investment Bank (AIIB) is going to provide budget support under the climate finance programme, which should provide some relief to the country's foreign currency reserves.

Visiting AIIB Acting Vice-President Rajat Misra informed this to Finance Minister Abul Hassan Mahmood Ali at a meeting at the secretariat yesterday.

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Climate finance in Bangladesh

Misra told reporters that discussions between the government of Bangladesh and AIIB regarding this issue have started and that the policy and requirement would be finalised within the next two months.

The finance minister said identifying both the policy and requirement at the same time will be something new for Bangladesh.

Finance Secretary M Khairuzzaman Mozumder informed that the government sought the support from AIIB after Misra informed them of a provision to provide budget support under the climate fund.

Bangladesh will be the first country to receive climate finance from AIIB, he said.

So far, Bangladesh, which is AIIB's 5th largest borrower, has received $3.5 billion in loans from the world's second largest multilateral development institution, mostly for the infrastructure sector.

The AIIB is considering increasing financing to Bangladesh in the coming days.

"We do not have any limits on our lending to Bangladesh right now. We can definitely take it up substantially," said Misra.

According Misra, AIIB is basically an infrastructure financing bank. So, AIIB is keen to partner with Bangladesh in its infrastructure development.

As Bangladesh is developing its infrastructure rapidly, the AIIB definitely would like to do more, he added.