TBT DESK: BRAC Bank is set to issue a Tk 10 billion green bond, marking a first for Bangladesh’s banking sector and opening another avenue for financing environmentally sustainable projects.

The proposed three-year bond is designed to channel investment into initiatives such as renewable energy, green buildings and energy-efficient industrial operations, at a time when Bangladesh is seeking greater investment in a greener and more climate-resilient economy.

Tareq Refat Ullah Khan, managing director and chief executive officer of BRAC Bank, announced the planned issuance at a press briefing at a city hotel on Sunday.

The bond will be senior-unsecured, non-convertible, fully redeemable and issued at zero coupon, meaning investors will not receive periodic interest payments. It will have a face value of Tk 1 million and will be available to corporate institutions and individual investors. Eligible corporate provident and gratuity funds may also invest, subject to applicable regulations.

The proposed issuance is aligned with Bangladesh Bank’s Green Bond Financing Policy for banks and financial institutions, as well as the Green Bond Principles of the International Capital Market Association (ICMA). Its framework has also received a second-party opinion from S&P Global Ratings, providing an independent assessment of its environmental credentials.

Speaking about the initiative, Khan said the bond represented an important milestone in the bank’s sustainable finance journey and a step towards deepening Bangladesh’s capital market.

“By mobilising capital specifically for eligible green projects, we aim to help businesses access financing for renewable energy, greener buildings and more energy-efficient industrial operations,” he said.

He added that the bank’s ambition extended beyond financing individual projects to building a financial ecosystem in which sustainability would become an integral part of investment decisions and responsible economic growth.

The proceeds are expected to support several United Nations Sustainable Development Goals, particularly those relating to clean energy, industry and infrastructure, sustainable cities and climate action.

BRAC Bank said the proposed bond builds on its existing sustainable finance activities. According to the bank, it has been recognised among Bangladesh Bank’s top sustainable banks for five consecutive years and ranked first among Bangladeshi banks in Bloomberg’s environmental, social and governance (ESG) rating.

The bank also said that more than 60 per cent of its loan portfolio was dedicated to sustainable finance, reflecting the growing importance of environmental considerations in its lending activities.

The planned issuance comes as Bangladesh seeks to broaden its capital market and mobilise funding for projects that can support long-term economic development while addressing environmental challenges.

By linking investment to defined green projects, BRAC Bank aims to strengthen the role of the financial sector in supporting the country’s transition towards a more sustainable economy.