Bangladesh has approved its first green bond, to finance environmentally-friendly projects including renewables.
The near-$12 million instruments has been floated by NGO the SAJIDA Foundation, which is owned by the Renata Ltd pharmaceuticals and animal health business spun out of the local branch of U.S. giant Pfizer in 1993.
The SAJIDA Foundation, which received $7.5 million from Dutch development lender FMO in December, will use the proceeds of the bond to provide microloans to small businesses and social initiatives.
With the International Finance Corporation private-sector arm of the World Bank last year highlighting Bangladesh’s green bond potential, numerous such fundraising vehicles are awaiting approval by the securities regulator.
In January, Bangladesh’s central bank mandated 2% of loans issued by banks and other financial institutions be devoted to green projects. In addition, a $125 million revolving fund has been established to finance technology development and support exports, including renewables-related products.
The World Bank on Thursday also published Living in the Light—The Bangladesh Solar Home System Story, describing what the multilateral development lender has labeled the largest off-grid solar program in the world.
Launched in 2003 as a 50,000-household pilot scheme, the World Bank said the campaign had provided electricity to around 16% of the nation’s rural population at its peak and has brought power to 20 million people.
Residential and farm rooftop solar, mini-grids, and solar irrigation systems were also covered by the $726 million Rural Electrification and Renewable Energy Development project overseen by the World Bank and rolled out by Bangladesh’s Infrastructure Development Company Ltd.
Bringing estimated benefits worth $1.7 billion up to 2018, by distributing 6 million solar-home systems with a total generation capacity of 263 MW, the program is estimated to have removed around 9.6 million tons of CO2 equivalent in its 15-year lifetime, by removing the emissions from 4.4 billion liters of kerosene.
“In remote and hard to reach areas, the government successfully introduced affordable off-grid renewable energy solutions through a public-private partnership,” said Mercy Tembon, World Bank country director for Bangladesh. “Clean electricity meant better health and living conditions for families and more study time for children.”